Critics say property tax plan targets commercial owners

Kevin Rademacher

Tuesday, March 29, 2005 | 10:49 a.m.

Business groups are sounding off against a property tax plan that would saddle commercial property owners with a increasing share of the tax burden.

The plan, which was unveiled on Friday, appears to have bipartisan support. It calls for a 3 percent cap on tax increases for owner-occupied homes. The same measure would allow all other property to increase at the larger of either the 10-year average rate of growth in the county or twice the rate of the consumer price index.

Such a plan to single out businesses was decried by the Las Vegas Chamberof Commerce.

"If you want to preserve a healthy business climate, you can't do that by artificially capping residential property with the help of a subsidy from commercial property," said Cara Roberts, a spokeswoman for the Las Vegas Chamber.

Sharon Powers, president of the North Las Vegas Chamber of Commerce, was similarly concerned, but said she was still in the process of reviewing the proposal and gathering input from membership.

"Obviously, anything that increases the cost of doing business, we are going to be real concerned about," she said.

One of the greatest concerns, said Powers, was that the tax rate on nonresidential property would be subject to a formulaic measure interpreted by lawmakers.

"How do you budget for that as a business owner?" she said. "How do you plan for the long term? That's going to be a real concern."

Alan Feldman, a spokesman for MGM Mirage, said the gaming giant had similar concerns with the proposal being difficult for businesses to decipher.

"It does require a special calculator and probably a tax attorney," he said. "While I appreciate their attempts to make it sound simple, it's not."

Echoing most business leaders, Feldman said that the measure causes equality concerns in two areas, treating residential and commercial property differently and treating economic areas differently.

"In a county like Clark where you've had rapid growth, you end up with significantly higher payments than in other areas," he said. "In general terms, we do have problems with it."

He indicated, however, that while MGM Mirage did not like the measure a formal campaign against it was unlikely.

Ray Bacon, executive director of the Nevada Manufacturers Association, also questioned the bill's fairness, especially in a state that allows ballot petitions that could offer interest groups the ability to exploit the business side of the tax ledger.

"Let's just dump it on those guys," Bacon said. "In a petition state, a split roll is just a disaster."

Roberts also questioned that possibility.

"Once the rolls are split, they're split." she said. "Now that you don't have to go back to the homeowners, you can just go back to the faceless businesses."

If the measure succeeds, some also are predicting a legal challenge to the bill that businesses claim violates the Nevada Constitution's mandate of uniform and equal treatment of property.

Feldman said MGM Mirage would not make such a challenge but that one would not be unlikely from other business groups.

Bacon agreed, adding that there could be several lawsuits.

"I certainly think we could end up with multiple suits," he said, adding that challenges would come from nonresidential homeowners, commercial and industrial property owners and small businesses.

Powers also said that there is little time left to examine the issues such a bill would create as the clock ticks down to a March 31 deadline to have any property tax action appear on coming bills.

"I'm just hoping that we're not making knee-jerk reactions in an effort to try and make this self-imposed deadline," she said.