Four takes on tackling taxes

Friday, Feb. 25, 2005 | 6:59 a.m.

WEEKEND EDITION

February 26 - 27, 2005

The most pressing issue facing the Nevada Legislature this year is what should be done to protect homeowners from getting hit with big increases in their property tax bills. This situation has arisen because property values have skyrocketed in the Las Vegas Valley over the past year.

Today the Las Vegas Sun offers commentaries from four elected officials who believe their proposals -- representing four separate approaches -- offer the best way to address this volatile issue. More plans are likely to emerge, although it's unclear at this time just which plan -- or which hybrid of plans -- has the best chance of being enacted. One thing is clear, however: The Legislature doesn't have much time left to act. Legislators have to pass a plan by mid-March in order to affect the tax bills that property owners will receive in July.

By Sharron Angle

Assemblywoman Sharron Angle, R-Reno, is serving her fourth term in the Legislature, having first been elected in 1998.

If a house on your block sells for more than you paid for your home, you shudder in fear when you receive your next property tax bill. Chances are, your new taxes are based on what your new neighbor was willing to pay. Things have gotten so bad that people will actually lose their homes because of uncontrolled tax increases.

The assumption of government is that homeowners profit immediately from housing inflation and increased property values. These are paper profits only, and real people can't pay real taxes with paper profits. Homeowners deserve permanent constitutional relief as well as statutory interim relief from the state Legislature.

I am proposing a constitutional amendment that would allow property owners to predict how much property taxes would be. The tax would not be based on your new neighbors' purchase price, but based on the price that you voluntarily agreed upon when you bought your home or the taxable value in the rollback year of 2002.

Your property tax rates could not exceed 1 percent of the value and could not grow by more than 2 percent per year. Once sold, the property would be reassessed at 1 percent of the new value with the 2 percent yearly cap placed on this new assessment.

Property owners would then know precisely how much the property tax would be at the time of purchase and at any time in the future. My Property Tax Restraint Initiative would make property taxes predictable and stable. The certainty in property taxes would be in the hands of the taxpayer rather than at the whim of the Legislature every other year.

A constitutional amendment requires a vote of the people in two general elections. So the Angle Property Tax Restraint Initiative could not take effect until 2009. The Legislature should put the Angle Property Tax Restraint provisions into the Nevada statutes now to provide an immediate roll back, immediate caps, and an immediate freeze on reevaluation of property until the time of sale.

The "tax experts" in Nevada predict the sky will fall if we continue to fight for the Angle Tax Restraint Initiative. Remember these are some of the same "experts" who recommended Nevada's record-breaking budget and tax increases for 2003-05!

Along with our Nevada-style "Proposition 13," I will also be placing an initiative for government spending restraint similar to Colorado's Taxpayer Bill of Rights, which limits growth of government to population plus inflation. I am convinced that without reining in government spending, our attempts at property tax restraint will only allow government to continue taxing us at higher levels on other taxes.

Much of the blame for California's economic problems can be placed on the lack of government spending restraints, not on Proposition 13. When Colorado residents enacted the Taxpayers Bill of Rights in 1992, it established low limits for state expenditure growth and mandated immediate refunds to taxpayers of all surplus revenue. Starting in 1997, their revenue began to exceed the limit and over the next five years Colorado taxpayers received annual tax rebates totaling $3.2 billion.

Howard Jarvis, the father of California's Proposition 13, once declared, "While death and taxes may be inevitable, being taxed to death is not inevitable!"

By Richard Perkins

Assembly Speaker Richard Perkins, D-Henderson, is serving his seventh term in the Legislature, having first been elected in 1992.

When the 73rd legislative session opened, I gave an address that laid out my priorities and goals for the Assembly. I started by asking both Democrats and Republicans to put partisan politics aside, to work together across party lines for the betterment of all Nevadans, and to be Nevadans first.

To me that includes working together to provide property tax relief. As Speaker of the Nevada State Assembly, I am committed to making this relief a reality.

Throughout this legislative session we will address many growth-related issues, but none more important than finding a real solution to our property tax problems.

As chairman of the Assembly Growth and Infrastructure Committee, which I formed in 2004 and is handling the property tax issue, my guiding goals and principles are simple. We need to provide relief for those who need it most -- our seniors, young families and working Nevadans.

We need to provide relief that doesn't hamstring local governments, so they don't have to take cops off the street or teachers out of the classroom. Finally, we need to pass a relief package that addresses a long-term solution.

One idea being talked about is a property tax "freeze." I strongly believe that starting this debate and discussion with a property tax "freeze" is not the best approach for Nevada.

A freeze amounts to only a short-term fix that gives bigger breaks to casinos and large businesses rather than those individuals who need it most. We are elected to tackle the hard issues and I believe we owe it to Nevada to try before pushing the issue off for one or two years, which is effectively what a freeze will do.

I view my proposal, which I mentioned in my opening-day speech to the Assembly, as a better starting point for the discussion. It addresses property tax relief with a long-term solution and one that helps those who need it the most.

I have proposed a "homestead exemption" in which property tax relief comes in the form of an exemption on the first $50,000 of assessed valuation. A house taxed today on $200,000 of value would now be taxed on only $150,000. While this idea will certainly work in our large urban areas, such as Las Vegas and Reno, the effect on smaller rural counties has yet to be determined.

One thing is certain, however. Ideas like this and that of capping the increase at a certain percentage do not unduly burden future legislatures. We can make this decision today. It's the responsible thing to do.

I have said this will be a session of action and vision. Whether it comes in a final answer, as I prefer, or as a temporary solution, Nevadans will receive property tax relief.

By Mark W. Schofield

Mark W. Schofield was appointed Clark County assessor in 1993 by the Clark County Commission to fill an unexpired term. He subsequently was elected to the position in 1994 and is serving his third term.

There has been and will continue to be a high-spirited debate about what to do to mitigate looming -- and huge -- property tax increases. The 6 percent cap solution, which I originally proposed last June, was carefully thought out and designed to benefit all taxpayers equally.

It is really a simple concept: Those taxpayers who received the highest increases would receive the greatest relief. However, all taxpayers would receive the same ratio of relief, hence the equality of the plan.

On the contrary, the opposite would happen if tax rates were reduced or a flat exemption were given to each property. The fact is that the majority of our citizens who would benefit from the 6 percent cap are those who are in entry-level homes and the moderate to middle class homeowners.

Of those of us who own homes, 97 percent have experienced at least a 6 percent increase in taxable values; for most of us, it was significantly higher. Regardless of any property tax relief to the majority, other measures must be taken to ensure that no one loses his or her home because of an economic hardship.

Many of our citizens and some legislators believe that the 6 percent cap is too high. While I can appreciate that concern, we all need to understand that a 6 percent growth in our property's value has been the norm for the last few years.

The tremendous appreciation in property values over the last two years is certainly welcomed, but definitely not typical. The 6 percent cap would establish equilibrium as it relates to what our taxpayers have become accustomed to and what our government has become accustomed to as it relates to revenue needed to provide adequate services.

Many of the proposals, including the one that mirrors Proposition 13 in California, would require a constitutional amendment, which takes five years to accomplish because of the need to change the Nevada Constitution. Others, including the 6 percent cap, would only require a statutory change, which would provide immediate relief.

The "Prop 13" method of relief may very well be what happens in five years, but I would caution our citizens to be careful about pursuing this method. Regardless of the political rhetoric, ask yourselves why so many Californians are moving here!

Let's be realistic: Nevada citizens are in the bottom quartile as it relates to the property tax burden in which they are subjected. No one can refute that; the 6 percent cap would keep it that way.

If you want to bring the level of government service down to a level that you feel is adequate for your needs, then I suggest that you ask yourselves what are your needs: police protection, fire fighting services, road maintenance, traffic signals, street lights and, most importantly, education. These are just a few of the vital services that our citizens receive.

If we really wish to better our community, we must be willing to make a contribution.

Many of the other proposals have merit and should be studied. However, if the Nevada Legislature does not provide the property tax relief that the 6 percent cap would provide while, at the same time, protecting the level of service that we receive, then we all will suffer from a revolt that will hurt our quality of life. Let us unite our efforts to think seriously about the consequences and be realistic in our decisions.

By Dina Titus

Senate Minority Floor Leader Dina Titus, D-Las Vegas, is serving her fifth term in the Legislature, having first been elected in 1988.

My solution to the current property tax crisis is very simple: freeze assessed values at the 2004 level for a year so taxpayers get immediate relief. Under this plan, your 2005 tax bill, which comes due in July, will be based on last year's assessed value, not on the shocking hikes you saw in the notices recently sent out by the assessor's office.

This proposal is consistent with my successful efforts last legislative session to help block increases in both property and sales tax rates that some legislators were pushing. I fought such increases because we all have to pay property and sales tax; we have no choice, unlike with cigarette, liquor, and gaming taxes, which affect only those who choose to participate.

Some have argued that the Titus Tax Freeze would negatively impact school districts and local governments. As a strong advocate of education and vital social programs, I would never support any measure that would deprive Nevadans of quality services they need. That's why my freeze on assessed value of existing property would not affect the ability of those entities to collect "growth money" on new construction. A freeze is also better for rural Nevada than any of the other solutions being touted.

Furthermore, under my proposal, any increases in assessed value in 2006 would be capped at the CPI, or cost of living, which is estimated to be 3 percent. This would prevent a spike in assessed values once the freeze is lifted; and it would give school districts and local governments adequate additional funds on top of the "growth money" to meet their needs.

During this two-year period, an interim legislative committee can study the many complex issues related to restructuring the property tax system. All stakeholders will have an ample opportunity to come forward.

Topics that should be addressed in depth include depreciation, calculation of assessed value, county tax rates, government spending levels, and possible constitutional amendments to create split rolls of various types.

One possible amendment I especially favor would allow the state to charge Nevada homeowners a lower rate than those who do not live in Nevada, such as celebrities and corporations, who are buying many of the luxury high-rise condos we see going up across the Las Vegas Valley.

My tax freeze is the best solution for two reasons. First, Nevada taxpayers need and deserve relief now. Gaming and sales tax revenues are at a record high, so why not give Nevadans a break?

Second, the assessors say we must reach a decision by the end of March if we are to affect July's tax bills. I do not believe it is possible to thoroughly consider these complex issues in only six weeks and come up with a good, fair, long-term solution that will provide taxpayers across Nevada with both financial relief and the quality services they need.

So I propose we pass a freeze now and take more time to study the issue to avoid enacting something in haste that is politically expedient, but could have negative consequences for decades to come.

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