Thursday, Jan. 6, 2005 | 11:14 a.m.
Legislators are eyeing an end-of-March deadline to solve the looming property tax crisis, and it appears the momentum is moving away from the original 6 percent cap proposed this summer.
Many Clark County residents are facing 30 percent to 50 percent increases in property taxes this year because of skyrocketing assessment values, and many legislators have vowed to lower those property tax bills.
Many different ideas are being floated now, from exemptions or credits to smaller caps. Fiscal analyst Guy Hobbs is due to release a much-anticipated analysis of at least 14 different scenarios sometime this week.
Policymakers also will attend an all-day summit at UNLV on Friday to talk about the issue with tax experts from around the country.
Meanwhile, some are warning that the Legislature doesn't work well under time constraints and shouldn't rush into an important decision.
Sen. Dina Titus, D-Las Vegas, has proposed a freeze on property assessments, and others are wondering if the Legislature will implement a short-term solution with plans to take up the issue again and iron out an idea that will work for everyone.
Emotions on the issue are now, Titus said, "very high."
"I know the legislative process," Titus said Wednesday on a taping of "Face to Face with Jon Ralston" on Las Vegas ONE, Cox cable channel 19. "... You don't lock in a bad solution that could have longterm devastating consequences."
Later, she said, "you never get politics out of the process."
Hobbs, who also appeared on the show, said local government could face cuts in service because of a freeze, though they probably could survive as long as the cuts would be for just one year.
One major problem is that different proposals will affect urban areas such as Clark County and the high-valued areas around Lake Tahoe differently than rural areas where assessed values aren't climbing nearly as fast, Hobbs said.
And Clark County is the only county that assesses values every year instead of the five-year cycle the other counties use, said Carole Vilardo, president of the Nevada Taxpayers Association.
Clark County Assessor Mark Schofield, who originally proposed the 6 percent cap on assessed values, said he is glad different ideas are on the table, though he still thinks his proposal is the most fair to everyone in the state.
"It's losing traction, but I think it will resurface once they start looking at these other proposals and they start doing fiscal analysis on them," Schofield said. "I think they're going to come back to the 6 percent (plan). It is by far the one that achieves the best balance in our mind."
Local governments have expressed displeasure with the idea, saying it would cut into their revenue.
Schofield said he expects a fight in the session between citizens who are furious about the tax increases and local governments protecting their revenue.
"You'll have two armies up there with this issue," he said. "You will have the citizens of the state clamoring for relief and the other army will be the local governments claiming the loss will adversely impact services.
"Those two parties will clash. Hopefully the legislators can sort through both sides of the issue and come up with something that is reasonable and fair for everyone."
Vilardo said she thinks the ultimate decision will incorporate several different methods, but she agrees with Schofield that the final solution likely will extend some sort of limit on assessed value.
Hobbs said there are about 14 ideas being floated for relief but they contain millions of variations. For instance, there are suggestions for tax credits, refunds, formulas based on the consumer price index, freezes, or reductions tied to income.
He said he has been working gathering information for both counties and cities. "This is a short-term aberration, not a long-term systematic problem. There may be two solutions," he said.
"We have already seen a receding of the spike" in property values in Clark County, Hobbs said. "It peaked some months ago," he said.
He has gathered information and developed models on how each plan might work and what its impact would be. Some of the rural counties have already seen declining assessed value, he said.
Assemblywoman Kathy McClain, D-Las Vegas, has a plan to give homeowners a break from the rising property tax values, some of which are going up by double digits.
McClain, who is says still working out the details of her plan, requested a bill in November to put a cap on property values for residents of owner-occupied, single-family homes. The cap could be anywhere from 2 percent to 6 percent and would be on land values, not structures, she said.
The tax relief would not apply to business or land speculators. And the tax break would go only to a homeowner for one house, not for other homes that a person owns and rents out.
McClain thought it would pass constitutional muster -- the constitution requires all property to be taxed equally. McClain's proposal would use a voter-backed constitutional amendment that allows property tax reduction for homeowners suffering "severe economic hardship." A dramatic increase in property tax might qualify.
McClain said Titus' proposal to freeze property value increases for one year while the Legislature discusses how to deal with the situation "might be the best idea." McClain said that could work "so in the long term we do not mess up something."
Andrew List, executive director of the Nevada Association of Counties, said today there should be property tax relief in some areas such as Clark County and at Incline Village Lake Tahoe, but not necessarily statewide. "One size does not fit all," he said.
He said an across-the-board limit will not work statewide. As an example, he said property values in Mineral County have not increased since 1992. If that county got sudden growth, it would not be able to provide the services needed. For instance, he said it now has only three deputy sheriffs.
List said a freeze on property tax values, as suggested by Titus, "isn't a good idea." The freeze would limit the revenue and reduce the ability of his county to provide the services demanded by residents, he said.
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