Editorial: Tax plan has merit

Wednesday, March 30, 2005 | 9:23 a.m.

The Legislature is working feverishly to save Nevada from an initiative that would saddle us with a Proposition 13-type law, and for that all of the state's residents can be thankful. Proposition 13, passed in 1978 by California voters, was an extreme reaction to what we in Southern Nevada are experiencing today -- rapidly rising property values and their corresponding property taxes. Property taxes since Proposition 13 went into effect have dropped about 57 percent, and California has been ridden with debt ever since.

Under a bill that appears ready for approval, people who live in their homes -- as opposed to homes owned by absentee investors -- would have their property taxes capped at 3 percent. This is only 1 percent higher than what Assemblywoman Sharron Angle, R-Reno, is proposing as a cap in her push to bring Proposition 13 to Nevada. Businesses and investor-owned properties would be dealt with using a formula that could see their taxes rise as high as 12 percent, which is still much lower than the inevitable 30 percent to 50 percent increases if nothing is done.

In concept, we agree with what the Legislature is doing -- offering a palatable plan to ward off Angle's very real threat. It's not what we endorsed -- an across-the-board cap of 5 or 6 percent -- but property owners will get substantial tax relief and Nevada will be saved from decimating its already financially beleaguered services. Not all is well, however.

It's been known since last summer that property values here were swelling to the point that taxes would increase way beyond what people would be willing to tolerate. A solution had to be in place no later than the end of March to affect the taxes property owners will pay this summer. Gov. Kenny Guinn could have called the Legislature into special session, but he declined, saying he was confident that it could timely pass a bill following the Feb. 7 opening of its regular session.

Well, here it is March 30 and we just now have a bill from the Assembly that appears capable of gaining full legislative approval. But there is no time left to carefully evaluate the plan. Will the state and local governments receive sufficient revenue? Is the blanket 3 percent cap, as the bill maintains, really allowed under the state Constitution's "severe economic hardship" provision? Or was that provision included to protect individual homeowners in specific situations? Is it constitutional for owner-occupied properties to be taxed at one rate and investor-owned and business properties to be taxed at another? And how about Senate Minority Leader Dina Titus' plan to propose an amendment to simply freeze taxes for a year? Where is the time to discuss that?

On the whole, though, we would rather be dealing with such nagging questions than a Proposition 13-style movement, which would threaten the quality of life in Nevada well into the future.