Lawmakers eye solution to property-tax relief

Key Nevada lawmakers have been told of a possible solution to constitutional problems with plans to give property owners some relief from tax bills increasing by as much as 80 percent, The Associated Press has learned.

Also, a long list of more than 20 property tax relief proposals has been pared down to fewer than 10 as lawmakers scramble to meet a March 31 deadline for approving a short-term measure to deal with the increases that will start in July.

Legislative leaders plan to meet again today to discuss the emerging relief plan, and to get more details on the benefits for property owners and the impact that it would have on government entities that depend heavily on property tax revenues.

What they're also learning is that the simple solution they had initially hoped for is unlikely. Rather than a flat cap of, say, 2 percent or 4 percent or 6 percent, they're considering a complex mathematical formula that allows for lower tax bills and at the same time tries to achieve tax equity among different types of property.

Most of the initial plans had proposed some type of cap - but they appeared to clash with a provision in the Nevada Constitution that says all increases must be applied in a "uniform and equal" way.

The emerging solution would establish a 2004 base year for tax purposes. Average values would be established on a neighborhood-by-neighborhood basis. The problem of new construction in 2005 would be solved by giving new homes or other types of new buildings a tax value calculated on the 2004 base.

Whatever the 2005 Legislature finally approves would remain in effect until a constitutional change, to revise the "uniform and equal" provision, could be approved. That's a process that normally takes at least three years.

Leaders involved in closed-door discussions of the plan Tuesday were reluctant to say much, but offered some details.

"The way to do it is to make sure everything is valued off of the base year," Assembly Speaker Richard Perkins, D-Henderson, said Wednesday. "If someone has a $500,000 house and somebody else builds next door and suddenly the market value is $700,000, the taxable value is still based on the $500,000. So everyone is treated equally."

"But every time we turn around it becomes that much more complicated," he added.

Sen. Randolph Townsend, R-Reno, said all the tax relief proposals attempt to incorporate new construction into existing property, with the idea being, "If it's not defensible in court, it's an exercise in futility."

Senate Minority Leader Dina Titus, D-Las Vegas, said the latest plan has elements of her proposal to freeze rates at 2004 levels, but adds two new formulas to come up with average values in specific areas and to account for county-by-county growth. Tax bills would show amounts owed, and what would have been owed without the relief efforts, she added.

"I still believe a simple, straightforward approach would be a freeze," Titus said. "Now this is what I call a Rube Goldberg scheme. It's absolutely not simple - and there is not consensus on it."