Tuesday, November 09, 2004
Copyright © Las Vegas Review-Journal

Sticker shock ahead for homeowners

Notices to reflect unprecedented surge in land value

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Record increases in Clark County property values will hit home later this week when homeowners receive notice of value cards that show an unprecedented surge in the value of land, county officials said Monday.

For the first time since the springtime boom in land values, conversations might sway from giddy stories about profits made on selling homes to nightmarish tales of horrific property tax bills.

"The good thing is you can sell your home for more; the bad thing is it equates into more taxes as well," said Rocky Steele, Clark County's assistant director of assessment services.

The taxable value on land increased between 20 percent and 50 percent during a year-long period ending June 30. Land values, which skyrocketed during a 10-month period beginning a year ago, are based on home sales.

Analysts say the dramatic surge was fueled by outside land speculators buying homes in the Las Vegas Valley, a steady stream of about 5,000 new residents each month, and a dwindling supply of vacant land.

As far as administrators in the assessor's office can tell, Clark County has never seen such a steep increase in property taxes.

"We hope that people, based on media reports, are aware of the tremendous increases in values of their own homes," Steele said. "Hopefully, they won't be too surprised, but there will probably be some sticker shock when they see their cards."

Notice of value cards inform landowners of the taxable value and assessed value from last year compared to this year. Property tax bills are not mailed until July.

New values show, for example, that the average Las Vegas home worth $153,846 rose in value to $200,000 this year, a 30 percent increase. The property tax on that home will be $2,310.

The assessor's office is bracing for phone calls from angry residents when the value cards are received, Steele said.

The assessor's office sees no end to sharply increasing property values because of the small supply and huge demand for land. That prompted Assessor Mark Schofield to propose a change in state law capping property taxes at 6 percent.

Schofield said once the public sees the increase in taxes, homeowners might pressure state legislators, who will decide whether to institute the cap during the next session.

"I think it will help the legislative effort; the Legislature sees quite clearly that something needs to be done," Schofield said. "Not only do I think the support will grow for 6 percent, but in all likelihood they might say it should be lower."

Proponents of the cap, such as Schofield, say local governments should not benefit from the tax windfall generated by increasing land values. Opponents fear a cap would hamstring local governments, which in turn would have to raise fees to provide services.

The cap is expected to be a contentious issue during the legislative session. The county assessor's office has already seen evidence of government leaders' unwillingness to take a strong stand on the issue.

Last week, the Southern Nevada Regional Planning Coalition's technical committee considered two resolutions related to the property tax cap.

The committee, which includes city managers and the county manager, held off on a resolution that advocated a 6 percent property tax cap.

They instead backed a resolution calling for further study of the proposal.

That resolution says the coalition "does hereby determine that property tax issues facing Southern Nevada are issues of regional concern." It also said the rise in taxes "merits the utmost consideration."

The coalition, which is made up of elected officials from the Clark County School District, Clark County, Henderson, Las Vegas, Boulder City and North Las Vegas, is expected to consider the committee's recommendation Nov. 18. Should the full board concur with the recommendation, the resolution would be sent to the Legislature.

Knight Allen, a government watchdog who led the fight to ban public employees from serving in the Legislature, said the technical committee meeting showed how political the property tax cap issue might become.

Knight said he hopes the coalition's decision is based on how residents feel, not the desires of government administrators in charge of general fund budgets.

"These are elected officials who have to face the people, and they seem to have delegated a lot more authority to unelected people, the finance people, the bean counters," Allen said. "What their (the committee members') proposal said was, let's study it. At this stage of the game, that has got to be the most ridiculous piece of advice this panel of elected officials can be given.

"For the Regional Planning Coalition to embrace that, to put their signatures on that, would be an act of political stupidity," Allen said.

Clark County Manager Thom Reilly said the technical committee's action was no indication that municipalities and the county are opposed to Schofield's proposal. Tax rolls just became available this week, allowing governments to analyze how a cap might affect their ability to provides services to growing communities.

"It's the first time those numbers have been available," Reilly said. "It makes sense for them to do their own analysis to determine the extent of the impact of the 6 percent (cap.)"