Officials split on property taxes

Kirsten Searer

Friday, Feb. 11, 2005 | 10:48 a.m.

CARSON CITY -- Officials from Southern Nevada cities continued to warn legislators Thursday that property tax reform could take a bite out of the services they offer.

Clark County Manager Thom Reilly told an Assembly committee Thursday that the county's costs of providing health care, public safety and other neccessities to a growing population are surging. He said the $2.94 tax rate in unincorporated Clark County has "precious little discretionary money in that."

Henderson Mayor Jim Gibson also asked legislators on Thursday to be careful about property tax reform. And if it were up to Mesquite officials, property taxes would stay the same in their town, said Mesquite City Manager Bryan Montgomery.

That doesn't seem to be an option, though, in the 2005 legislative session. Several legislative leaders have called property tax reform the most pressing issue they face because home values are skyrocketing in several counties, including Clark.

On Thursday, members of a joint Assembly-Senate committee looking at the issue heard details of specific plans in the works.

There are at least 14 ideas and not one is perfect, said Nevada Taxpayers Association President Carole Vilardo, who urged lawmakers to come out with a plan in enough time that the public would have at least 10 days to review it.

Vilardo encouraged legislators to look at some sort of cap on assessed values or some sort of exemption, perhaps a hardship exemption for people who cannot affford the increases in their taxes.

That exemption, however, would need to pass constitutional muster, she warned. The state's constitution requires that taxes be levied in a "uniform and equal" manner.

Much of the focus isn't just on Clark County's growing areas but also on Nevada's nine counties that have lost assessment value in recent years. Marvin Leavitt, chairman of the Committee on Local Government Finance, warned that while growing areas need relief, property tax changes could hold unintended consequences for rural counties.

For example, he said, most people assume that capping assessment rates at 6 percent would stabilize values in growing areas and not affect areas where assessments aren't rising.

But it could cut rural revenues because it would cap the properties that actually are growing and providing new revenue in rural counties, he said.

Leavitt also looked at lowering the assessment rate from 35 percent to 30 percent, something that would cut taxes across the board regardless of whether properties are increasing in value.

"The problem with that is it would probably finish off the rural counties," he said.

Financial analyst and longtime government budget consultant Guy Hobbs said he hoped the Legislature would look at a broad range of ideas, from a cap on assessed values to allowing people to declare economic hardships to a "smoothing" technique where assessments would be averaged over several years to smooth out spikes such as the one expected this year.

He did, however, express reservations about any measures similar to California's Proposition 13 or reducing the tax rates.

Several legislators have said the entire property tax system might need to be examined.

Assemblywoman Chris Giunchigliani, D-Las Vegas, said she's frustrated that not all homes are assessed the same way throughout the state. Some counties, for example, count improvements differently, and all of the state's counties except for Clark assess homes only every five years.

"We've never lifted the hood on property taxes," Sen. Mike McGinness, R-Fallon, said. "We've been driving around in the car without understanding how it works."