Taxing situation

Recent business before the Clark County Board of Equalization was the tip of a very large iceberg that could leave the governments of Nevada taking on even more water.

A few hundred of the 5,900 taxpayers who appealed the county assessor's valuation of their properties went before the board on Feb. 27 to make their cases for reduced tax bills. The number of appeals more than quadrupled the 1,300 filed last year.

The collapse of the valley's housing industry has done much more than carve billions of dollars worth of equity from homes and businesses. It has left tens of thousands of property owners angry that their tax bills do not reflect current market conditions. They know what foreclosed homes are selling for on their streets, and they know how many businesses near theirs have closed. They're convinced they're being overcharged by the government right now, and some aren't getting the answers they want.

Taxpayer Edward Locke told the Board of Equalization that Clark County can't boost values and tax collections in good times and keep assessments high in bad times. "You can't have it both ways," he told the board.

"Get control of yourself," board member James Howard replied.

Homeowner Peter Kingman, unsuccessful in his appeal, complained that his older home has been overvalued for 13 years. "Where do I go from here?" he asked.

"You go home and enjoy your life," board member Scott Dugan answered.

These are the types of interactions, in response to the kinds of raw emotions and difficult circumstances, that can lead to a bona fide tax rebellion.

When county homeowners are suffering through reduced income, unemployment and free-falling home values that have left entire neighborhoods owing more on their mortgages than their houses are worth, they won't react well to government attempts to continue confiscating an unfair share of wealth.

Locally, median existing home prices fell 30 percent last year. If they don't soon stabilize, if they fall even 10 percent more in 2009, the testy members of the Board of Equalization are the ones who had better get control of themselves. Next year, their doors could be knocked down by tens of thousands of desperate appellants.

And government budget planners, already scrambling to manage drops in sales and other levies, now must face the long-term prospect of declining property tax revenues, the one stream they have counted on for predictable, vigorous growth. If elected officials maintain that they cannot possibly pull the trigger on any of the difficult budget-cutting choices they're already confronting, what will they do when property tax collections fall through the floor?

Clark County is moving forward in its budget process anticipating zero-growth in property taxes, as well as continued declines in sales taxes.

On Monday, state lawmakers learned that Gov. Jim Gibbons' proposed $6.17 billion budget for 2009-11 might have to be cut by $100 million because of worsening revenue projections. On Feb. 27, the state Taxation Department reported that December taxable sales declined 16.2 percent from December 2007.

Municipal, county and state elected officials need to splash some cold water on their faces, look in the mirror and tell themselves that whatever worst-case budget scenarios they envisioned only three months ago, whatever priorities they thought they could never budge from, whatever cuts they vowed to never make, are all out the window now. They must start making contingency plans for this year and the next, and those thereafter. They must recognize that the days of guaranteed revenue growth are gone, and that not even the most esteemed economists can guess as to when or whether they might come back. They must realize that suffering taxpayers are growing more anxious and restless by the month.

And the members of the Board of Equalization must keep in mind that their hard work is just beginning.