Boulder City planning to cap its own property taxes

Thursday, March 31, 2005 | 9:14 a.m.

Boulder City isn't waiting for the Nevada Legislature to give its residents some property tax relief.

Boulder City has unveiled it's tentative budget that limits property taxes it can collect from the community at 3.4 percent. The City Council will consider the plan at its April 12 meeting, but council members have already shown their support for the proposal, cutting by 10 percent the rate used for calculating property taxes paid for city services.

That rate reduction will help offset big increases in property values that otherwise would have seen the community pay about 13 percent more in property taxes for city services, Finance Director Robert Kenney said.

Even with a 10 percent reduction in the tax rate, Boulder City would generate an extra $37,000 in property tax revenue to its $1.1 million base. The city would have gained an extra $110,000 on top of that by keeping the same rate, Kenney said.

"We didn't need to take that windfall," Kenney said of the city's proposal to lower its tax rate. "At the time we made our decision, we still had no idea what the state was going to do."

Boulder City's plan on cutting the tax rate from 20.3 to 18.4 cents per $100 assessed value may need to be adjusted as state lawmakers mull their own version of tax relief.

Under a bill adopted by the Assembly and now before the Senate, homeowners state wide would have their property tax increases capped at 3 percent. Taxes on all other properties would be capped based on their ten-year growth average, which in Clark County could exceed 12 percent.

If the state caps the rate homeowners pay at 3 percent, that may require Boulder City to reinstate some of its proposed 10 percent reduction in its tax rate, Kenney said. If the state caps the amount property values can increase instead, the city would keep its existing tax rate so it wouldn't lose money, he said.

"We are going to have to take a look to see what they do affects Boulder City, and we will adjust our rates accordingly," Kenney said. "If the state goes ahead with capping, we have to rethink our levy rate reduction or we will put ourselves in a hole."

Boulder City is bucking the example of Las Vegas where city leaders said there are no plans to cut the tax rate despite jumps in property values. North Las Vegas is considering cutting its tax rate by 1.5 cents. Henderson hasn't unveiled its budget.

Kenney said the city wanted only to receive its normal rate of growth in property tax revenue, which is based on calculations from the state Department of Taxation.

Boulder City Mayor Bob Ferraro said the city's plan makes sense for those on fixed incomes.

"We didn't want to make it difficult on seniors," Ferraro said.

Kenney said the proposed rate reduction in Boulder City can't be compared to what is done in neighboring cities. Boulder City severely limits its growth and doesn't have thousands of people moving in and requiring services.

Boulder City is also less reliant on property taxes than other cities, he said. Property taxes make up less than 6 percent of the city's $19.6 million in revenue in its general fund, which covers most city services. Sales taxes at 45 percent make up the biggest chunk of the city's revenue.

Boulder City residents pay $2.50 per $100 assessed value for all of the taxing entities it is covered by, including the city, library, county and schools, Kenney said. That's among the lowest in the state and is lower than $3.40 in North Las Vegas, $3.30 in Las Vegas and $2.90 in Henderson, according to the city's budget report.

Boulder City's budget proposes no new services and no new hires. The general fund budget is slated to increase about 6 percent from $18.1 million to $19.3 million.

The increase is attributed to higher health care, worker compensation and retirement costs. Some $6.7 million or 35 percent of the budget is spent on police, fire and animal control services.