Property tax plan faces overhaul in Senate

Kirsten Searer

Wednesday, March 30, 2005 | 10:43 a.m.

CARSON CITY -- The Assembly overwhelmingly passed a bill Tuesday that would give tax relief to all property owners, though the bill could evolve in the Senate.

With a 41-1 vote, Assembly members cleared Assembly Bill 489, the so-called "hybrid bill" that gives a hardship exemption to all homeowners, capping their tax increases at 3 percent a year. Taxes for all other properties would be capped based on a 10-year growth average in each county.

Many Assembly members praised the plan Tuesday, saying it was a bipartisan compromise.

"We crafted the fairest and most equitable bill that we can that addresses every property owner in this state, and we've done it in a fashion that still addresses local government, schools, and the services that we provide," said Assembly Minority Leader Lynn Hettrick, R-Gardnerville.

But some members of the Senate said they're not sold yet, especially because businesses continue to complain that the bill would put a tax burden on commercial properties so that local governments don't have to tighten their belts.

"We have sincere concerns about how business properties will be treated in this proposal," Las Vegas Chamber of Commerce Government Affairs Director Christina Dugan told a joint committee on Tuesday.

"We believe the hardship exemption is really something that should be used in a case-by-case basis for individuals in a one-time, sincere economic hardship," she said.

Senators have asked staff members to run numbers on a slightly different plan that would still give the 3 percent break to homeowners and a 6 or 8 percent cap to other property owners.

Sen. Randolph Townsend, R-Reno, said he is also looking at an amendment that would throw out the highest and lowest growth years if the state ends up using a 10-year average to cap business taxes.

Townsend said he wasn't willing to comment on a flat cap on properties that don't get a hardship exemption until he saw numbers on how they would work.

But he said anyone who thought the tax bill would pass both houses without going to a conference committee for negotiation is "naive."

Also in the Senate, Minority Leader Dina Titus, D-Las Vegas, is continuing to push her idea to freeze property value at 2004 levels for homeowners, while giving another form of relief to businesses.

Titus said it's not surprising that senators want to amend the bill because they were largely shut out of the hybrid bill, which was crafted by Hettrick and Assembly Majority Leader Barbara Buckley, D-Las Vegas.

"The Senate wasn't part of any deal," she said.

Titus said the bill could fly through the Senate today if Senate Majority Leader Bill Raggio, R-Reno, decides he wants the deal to go through without major bickering.

But the bill could face more of an overhaul if senators with concerns about businesses decide they do want a fight, she said.

Gov. Kenny Guinn would sign the tax bill passed by the Assembly on Tuesday, but would prefer a mechanism that would protect businesses "if we can figure out how to do it," said Guinn's chief of staff, Mike Hillerby.

Assembly members did make some small amendments to the bill Tuesday, including stipulating that homeowners can claim a hardship exemption on only one home.

People with vacation homes would be taxed based on the 10-year average in their county, even if they don't rent the home to other occupants.

Another amendment would help struggling rural counties capture new revenue generated by newly opened mines or other economic growth.

Assemblywoman Sharron Angle, R-Reno, was the one Assembly member to vote against the bill on Tuesday.

Angle has publicly favored a stricter, Proposition 13-style bill, though she could not muster support for her idea in this legislative session. She plans to take the issue to the ballot in 2006.

She said Tuesday that she voted against the bill because it treated businesses differently and doesn't provide relief to renters.

"It's no Prop 13," she said.

While the bill would give the 3 percent cap to owner occupied homes, including manufactured homes and condos, it would not give a hardship exemption to apartments, which would see taxes based on the 10-year growth cap in their county.

Scott Smith of the Southern Nevada Housing Association complained to legislators Tuesday that the increases in taxes will be passed along to renters.

"Make no mistake, if property taxes increase, these costs will be passed on to the renters," he said. "They will be the group who is least likely to bear this."

The plan's proponents said they have tried to find a legal way to include rental properties but can't fit it under the economic hardship clause of the state constitution.

Assemblywoman Chris Giunchigliani, D-Las Vegas, said she hopes to target renters for tax relief when the Legislature takes up a long-term solution to the problem.