Questions remain on hybrid tax bill

Kirsten Searer

Tuesday, March 29, 2005 | 11:18 a.m.

CARSON CITY -- A bill to curb property taxes appears to have plenty of life in the Legislature, even though it didn't follow the fast track to passage that its supporters first predicted.

Assembly Bill 489 was introduced Monday in the Assembly, and a joint committee is expected to hear it today.

The bill looked largely like a proposal sketched out last week: Homeowners' taxes would be capped at 3 percent a year. Other property owners' taxes would be capped at the 10-year growth rate in their county.

Lawmakers said they spent the weekend tweaking some provisions and showing numbers to various interests. But Assembly Majority Leader Barbara Buckley, D-Las Vegas, said she didn't expect major changes to the bill in coming days.

"We don't want to do anything that's going to slow down this bill," Buckley said.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said Monday he still believes the bill is the best balancing act between giving homeowners enough relief and protecting the revenue of local governments.

Still, some questions remain about the "hybrid bill."

Boyd School of Law professor Steve Johnson said he wouldn't venture a guess on whether or not it would hold up in court.

Johnson told legislators earlier this month that he thought a hardship exemption was the best way to enact tax relief, though he proposed a 6 percent cap on taxes.

Legislators need to specifically outline in the bill why people need relief if their tax bills go up 3 percent or more, Johnson said.

The bill's treatment of commercial properties might prove more legally sticky because of a provision in the state constitution that requires properties to be taxed in a "uniform and equal" way, he said.

"That's a harder call," he said, though he said courts will be impressed by the research the Legislature has done on the issue.

Sen. Warren Hardy, R-Las Vegas, said Republican senators generally expressed support in a caucus meeting Monday for the hybrid bill.

Still, he said, some Republicans do worry about the burden on businesses.

"I think some of us are looking for ways to make sure businesses are treated fairly," Hardy said. "We certainly don't like the split roll."

Hardy said he and other senators could support the idea because it is a short-term solution, with a promise to look at the problem in the legislative interim.

"I think the Assembly might view the compromise as a long-term fix," he said. "I don't think we do."

Meanwhile, the Las Vegas Chamber of Commerce and some other business interests continued lobbying against the bill Monday, saying the bill doesn't match the intent of a severe economic hardship.

Chamber government affairs director Christina Dugan said the hardship is designed for truly severe cases, such as a medical emergency that impedes a person's ability to pay property taxes.

Carole Vilardo, president of the Nevada Taxpayers Association, said she thinks the bill has some good points, but she also was unsure about the definition of a severe economic hardship.

"I think it's hard to use 3 percent and justify severe economic hardship," she said.

Another potential hitch emerged Monday after Republican senators met in caucus.

Several senators reportedly voiced support for an amendment to the bill now being considered by Senate Minority Leader Dina Titus, D-Las Vegas.

Titus said she could either amend the bill to give a freeze on property taxes to homeowners this year, and a 3 percent cap next year. Other commercial properties could be taxed as provided under the hybrid plan.

Or she could try to freeze all taxes this year -- for residential and commercial properties -- and enact the hybrid bill in the second year.

Hardy said he sensed support for a property tax freeze among some Republican senators, especially those in Clark County.

"I just think a freeze is a way to compel local government to tighten their belts a little bit," he said. "I don't think that's a bad thing."

Titus said she thinks she might have enough votes to get her amendment through the Senate, though she said she was unsure if the bill could clear the Assembly.

Should the Senate vote come out as a tie, Lt. Gov. Lorraine Hunt would cast the deciding vote. She said Monday that she supports the compromise bill as a short-term solution but would have concerns about paying for education, fire and safety programs if the state were to enact a freeze.

"I'd be afraid of the harm we could do," she said. "We need to continue to grow. We need to continue to build hospitals."