The legislation capping property tax increases for Nevada homeowners to no more than 3 percent a year should win final legislative approval today in the state Senate.
AB489 was approved 41-1 by the Assembly Tuesday evening. Only Sharron Angle, R-Reno, voted no. She has announced she will instead push for a California-style Proposition 13 amendment slashing property taxes for business as well.
The bill caps single-family, owner-occupied homes at 3 percent tax - far less than the 30-40 percent some Clark County homes would get under existing law and dramatically less than the 80 percent and more increases seen in some property values in the Lake Tahoe Basin.
It does so by using a section of the Nevada Constitution put in place just a few years ago at the urging of then Sen. Ann O'Connell of Las Vegas. That section allows the state to cap taxes for single-family, owner-occupied homes, treating them differently than businesses in cases of "extreme economic hardship."
All other properties, Majority Leader Barbara Buckley, D-Las Vegas, told the Assembly, would be capped at no more than the average value increase the county has experienced over the past 10 years.
The only objections to the bill in committee came from the Reno-Sparks and Las Vegas Chambers of Commerce. But Assemblywoman Sheila Leslie, D-Reno, challenged Michael Pennington of the Reno chamber when he said that group opposes the plan.
"What is your alternative proposal?" she asked.
When Pennington said they have no specific alternative, Leslie said business has to have an alternative to doing nothing because doing nothing would actually hit businessmen with a much larger tax increase than AB489.
Christina Dugan of the Las Vegas chamber said the group maintains its position that "all property ought to be taxed equally."
The bill was amended to clarify and tighten it before it was approved. The amendment makes it clear that voters can authorize higher tax rates if they choose to do so in a given county or tax district. It also clarifies that the "severe economic hardship" cap of 3 percent applies only to a person's primary residence - not to rental properties and vacation homes.
To prevent local governments from raising their tax rates to cheat the cap, the amendment requires they get permission from their Local Government Finance committees and the Nevada Tax Commission.
And it clarifies that centrally assessed property such as telephone and power utilities are under the 10-year-average cap.
Small rural counties that suffer a big property tax decrease because of, for example, a mine closure are allowed to recover their revenues when the mine reopens without being held down by the cap.
"We've crafted the finest, most equitable bill we can," said Minority Leader Lynn Hettrick, R-Gardnerville.
Assemblywoman Chris Giunchigliani, D-Las Vegas, said it also protects essential governmental services - especially funding for public schools.
The bill will be handled today in the Senate, where Minority Leader Dina Titus, D-Las Vegas, still wants to amend it to freeze taxes next year and allow the AB489 cap to come into play the following year.
"The impact is huge" on school and local government funding, Hettrick said.
The Senate is expected to approve the bill as passed by the Assembly, and Gov. Kenny Guinn has indicated he will sign it.
n Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.
