Your March 13 editorial: “Legislation to raise taxes in perpetuity on Nevada property owners deserves the bum’s rush,” incorrectly states “the proposal essentially codifies into state law an annual 3 percent property tax hike for residential real estate in perpetuity.” I would like to clarify that Assembly Bill 43 would not change the existing 3 percent residential cap on tax bills.
State law sets property taxes at the assessed value multiplied by the property tax rate, and then limits any annual increases to 3 percent. Taxes can decrease under the current formula or increase up to 3 percent. AB 43 does not change this.
The editorial also claims that AB 43 would push a $ 2,000 tax bill to almost $2,700 after a decade. That is not at all likely as inflation would have to remain below 1.5 percent for 10 straight years, a condition that has never occurred since 1913. Furthermore, an amendment assures that AB 43 will not increase property taxes next year — and based on CPI projections through 2022, it is not expected to increase property taxes for the following six years.
Finally the assertion that “the increases would be even higher for commercial properties, as much as 8 percent” is misleading since they have already reached this amount six times since the property tax caps were applied in 2006.
The Nevada Association of Counties fully supports the caps that were enacted by the Legislature in 2005 to provide relief to taxpayers. This year these caps have saved taxpayers $700 million.
However, the secondary calculation that caused property tax increases to drop to 0.2 percent this year — for residential and commercial properties already benefiting from significant tax abatements — was an unintended consequences of how the caps are calculated. The fact that property tax revenues in six counties are flat this year while property values in those counties increased by more than 3 percent in each of the past two years is why the secondary calculation needs to be fixed.
This is hardly a “breathtaking overreach.”
Nevada’s counties, cities and school districts support AB 43 not because they believe it will generate additional revenues. Rather, they understand the need to improve the stability of a uniform statewide tax system in order to maintain the level of services they are currently providing.