Short-term property tax fix rejected

Kirsten Searer

Friday, March 4, 2005 | 11:11 a.m.

CARSON CITY -- Lawmakers were told Thursday that a long-term solution to the public's outcry for property tax relief will take years, and the Assembly speaker's proposed short-term solution appears destined for the trash can.

Assembly Speaker Richard Perkins, D-Henderson, said his idea to give all homeowners an automatic $50,000 exemption from their taxable property value is "80 percent ruled out."

Perkins suggested the idea as a short-term solution to rising property taxes in some areas of the state, including Clark County. Perkins and other legislative leaders have pledged to come up with a way to mitigate the increases before tax bills go out in July.

But Perkins' proposed exemption could wipe out the tax rolls in rural counties that have lower assessed values, Perkins said. Staff members looked at ways to ease that problem, but the idea ultimately might not work, he said.

He did reassert his pledge Thursday at a meeting of the Assembly Growth and Infrastructure Committee to come up with a short-term solution to property taxes by the end of March. Perkins said he and other legislators have received phone calls and emails complaining they aren't moving fast enough.

"This Legislature will provide immediate property tax relief for our citizens," he said.

Several legislators have said they likely will create a short-term solution and then try to amend the state constitution for a long-term plan.

Legislative Counsel Brenda Erdoes told the growth committee Thursday that "the sky's the limit" when they amend the constitution as long as they don't violate the federal constitution.

She gave them a briefing of how other states deal with property taxes, though she said there's no clear example of how to keep property taxes affordable.

"They're all over the board in terms of what they do," she said.

Most states do, however, allow properties to be classified into different categories, such as residential versus commercial. Nevada's constitution, which requires property to be taxed in a "uniform and equal" way, prohibits that now.

Some states roll back their assessments to times before property value spiked. Some give sliding rebates to ensure residents don't pay more than a certain percentage of their household income.

Others exempt taxes by a fixed percentage if people have lived in their homes for a long time, perhaps 20 or 30 years, she said. Some states also give a break to seniors and the disabled, she said.

Nevada could even allow each county to set its own way of assessing and taxing property, she said.

These ideas and more combined to make the right solution for Nevada, she said. But she cautioned that the Legislature wouldn't be able to clear a constitutional amendment until at least 2007, and they should be sure that the amendment is broad enough to give tax relief but flexible enough it will work in future years.

"Whatever you put in there should be longstanding," she said.

The federal constitution would put some restraints in place, she said. For example, the state could tax primary homes differently than vacation homes. But it couldn't tax people who live full-time in Nevada differently from out-of-state residents who live in Nevada several months a year, she said.

The best short-term solution now might involve giving homeowners some kind of economic hardship, which is authorized in the state constitution, in conjunction with some sort of cap or smoothing technique, where property assessments would be averaged over several years, Perkins said.

"They (staff members) are working on some ways to make it constitutional," he said.

Perkins acknowledged that the Legislature needs several days to talk about an idea in committees and wait for the bill to be drafted and amended.

"Clearly we have to have something done in the next couple weeks," he said.