Leeway seen in hardship tax plan

Kirsten Searer

Friday, Feb. 25, 2005 | 9:55 a.m.

CARSON CITY -- The Legislature's chief attorney told an Assembly committee Thursday that the Legislature could have a wide leeway in creating a hardship exemption for people struggling to pay their property taxes.

Legislative Counsel Brenda Erdoes told the Assembly Growth and Infrastructure Committee that a constitutional amendment passed by voters in 2002 allows the Legislature to give economic hardship exemptions to homeowners struggling to pay their property taxes.

The Legislature hasn't done that yet, but the amendment gives legislators ample room to create exemptions or abatements, she said.

"They have set the stage for you to interpret this fairly broadly," she said.

Legislators are looking at several different methods of curbing property taxes, which are rising tremendously in growing areas, especially in Clark and Washoe counties. One possibility would be to give homeowners a hardship exemption.

Erdoes pointed to the language on the ballot that voters approved, which states, "As a result of severe economic hardship, some homeowners find it difficult to pay the property taxes on their residences. In some cases, this hardship is caused by unemployment or extraordinary medical expenses.

"In other cases, homeowners have occupied the same home for many years, and during that time the value of the home has greatly increased."

Erdoes said the exemption has to apply to single-family, owner-occupied residences. She said she could not find other states that have enacted similar provisions.

Assembly Speaker Richard Perkins, D-Henderson, said it seemed there was little guidance to the Legislature.

"It's up to the common sense of this Legislature to figure that out," he said.

Erdoes responded, "I believe any reasonable interpretation of these words should be upheld by the court."

Also on Thursday, several real estate executives testified that they believe the housing market will remain strong but will not be as busy as the first six months of 2004 when property values skyrocketed.

Interest rates, which are expected to keep rising, also could slow down the cost of homes, said Mark Stark of Prudential Americana Group

Stark said he would prefer property tax abatement that includes some sort of smoothing technique that would average a home's assessment over several years to iron out the ups and downs of the housing market.