The Nevada Legislature will take some action on the state’s property tax system this session, even if only to form an interim study committee to look at the issue, according to the Nevada Taxpayers Association.
“I think there will be a study,” Cheryl Blomstrom, interim president of the association, told a lunch of the Carson Valley Chamber of Commerce at the Genoa Lakes Golf Club on Wednesday. “We’ve got to have a grownup conversation about what we want to be. We want to be more than we are.”
Less certain this session is if the current proposed legislation, Assembly Bill 43, will pass, said Blomstrom.
Introduced by the Nevada Association of Counties, the bill would add a floor to the current property tax system.
Right now, property tax increases are capped at 3 percent on primary residences and 8 percent on all else.
A secondary cap primarily applied to commercial property uses the calculation of two times the Consumer Price Index and a 10-year rolling average of property values.
As a result, property taxes only rose two-tenths of 1 percent in 2016, hamstringing counties which rely heavily on property tax revenue.
“Through a neat little twist in the law, residential (increases) can’t be higher than commercial so everyone dropped to (two-tenths of a percent),” Blomstrom said.
Initially, the bill added a floor of 3 percent for commercial properties. An amendment sets the floor at two times CPI in 2018, which would make the floor 2.6 percent next year, and then lock it in at 3 percent once the CPI reached 1.5 percent.
If approved, homeowners would pay based on increases in their property’s assessed value and only up to 3 percent. So, if a home’s value jumped 1 percent, the tax bill would rise 1 percent, or 3 percent if the value rose 4 percent or more.
That amendment may give the bill a better chance, said Blomstrom. It’s unclear but it may mean the bill needs a simple majority to pass and not a two-thirds majority required to pass the original bill.
“If it’s a two-thirds bill, I doubt it will pass,” said Blomstrom. “If it’s a majority bill, maybe.”
The taxpayer’s assocation supports the bill because it stabilizes rates, which benefits both property owners and the counties that rely on the tax.
“If we don’t do something, we’re going to have do more with less, and our population is growing,” said Blomstrom.
The Assembly Committee on Taxation heard the bill last week and didn’t take action.
