Fix the property-tax problem
Nevada lawmakers should take a clue from Steven Zimmerman, managing director of Standard & Poor’s western regional office in San Francisco, who recently spoke to the Legislature. He said Nevada is ripe for a Proposition 13-styled citizen initiative, and the Legislature should enact some decent legislation stabilizing property taxes before a taxpayer revolt hurts the government’s ability to borrow money.
Many folks are talking about a property-tax revolt, and local media has portrayed the potential citizen’s initiative as a certainty, and maybe they’re right, if legislators don’t get off their duffs and make some sensible laws. Many Nevadans, particularly seniors who believe their Social Security is also at risk, will be willing to attempt to get laws passed that will benefit their own self-interests but will undercut the interests of their neighbors, including social programs and schools.
Gov. Kenny Guinn set the stage for the debate in his State of the State speech last month. While he didn’t recommend any particular legislation, it was pretty apparent he was worried.
With good reason. It’s not like we’re not already seeing signs of the property-owner revolt. One example is the recent victory before the Washoe County Board of Adjustment, in which 1,230 Incline Village property owners were able to defeat an 8 percent increase in property assessments for the coming year. (By comparison, Prop 13 capped tax rates permanently at 1 percent of a property’s value.) And it’s likely the Incline Village battle isn’t over yet. County assessor Robert McGowan has said he will appeal the decision of the county Board of Adjustment to the state Board of Adjustment.
There will likely be further political fallout on this issue—the Board of Commissioners has already singled out a Board of Adjustment member for attack, and other members of the community are talking about going after McGowan’s job.
Should citizens have any reason to believe that government is being over-greedy with their property taxes? Well, there is the small matter of that $320 million budget surplus. But revenues and surpluses are unpredictable beasts, with one bad administrator able to reverse a positive fiscal trend (look far to the east for a current example of this). Assessed values, once raised, are practically forever, and with the exception of some downtown Reno casino properties, less likely than Chicken Little’s sky to drop.
There are lots of good reasons for some compassionate, reasoned legislation. Young folks who’ve bought homes in the last few years in Washoe County shouldn’t be faced with the choice of wildly fluctuating taxes and the choice of a decreased quality of life (using other parts of their budget to pay increased taxes) or leaving town. Older folks, even those who’ve paid off their mortgages, shouldn’t be faced with the prospect of losing their homes to the taxman.
It’s not often all the factors collide—upward trending property values, increasing property taxes, a state budget surplus and a simmering community anger—to create an easily predictable "perfect storm." But if Nevada legislators don’t pay attention to the writing on the wall now, they may be faced with a colossal problem in the next election.