Mary Walker, former finance director for Carson City, is a lobbyist representing Carson City, Lyon, Douglas and Elko counties at the Legislature. On Monday, she talked about concerns smaller governments have about some of the unintended consequences of a property tax proposal being considered by lawmakers.
The proposal introduced in the Assembly on Monday caps increases on all residential tax bills at 3 percent a year and limits commercial and other properties to the county's average increase over the past 10 years, or double the inflation rate.
Several times during this session, local governments have been painted as the bad guys who want to spend all this windfall revenue from rising property taxes. What is their position on the issue as a whole?
We support tax relief because of the high growth in value of property. It's much higher than what we need to sustain current levels of service and we're willing to give up that windfall. But we do believe some amendments are needed. Our concern is that they don't start eating into basic revenues needed to maintain our current levels of service.
Doesn't the spike in property taxes pretty much affect everyone?
What's happening overall is Clark County has an 8.8 percent increase, Washoe a 4 percent increase and Douglas has 4.2 percent - but the remainder of jurisdictions either have flat revenues or are negative. The small rural entities that don't have huge growth in assessed value are the ones that would be taking the biggest hit on this new tax proposal.
The problem in smaller rural jurisdictions is not only that they don't have big growth, they don't have commercial properties. We know something has to be done and we would support the bill with amendments to provide greater protection to those rural communities.
What happens in those counties where assessed valuation is actually dropping?
That's a major concern because as written, a small county's revenue from property taxes can go down if the mines close or something else happens, but they couldn't go back up more than a few percent a year if, say, a big mine re-opened, even though they now have to provide a lot more services. That needs to be fixed.
How do you see the proposed system actually working in the different counties?
Actually, there's a big problem with the way the bill is currently written because the amount property tax revenues can increase is capped. That means if a county has to increase its rate to meet inflation, it could take away money from other entities. The schools have a fixed property tax rate so they would take the brunt of that. If other entities raised their rates, less money would go to the schools because the total is capped.
The same thing would happen with entities that have authorization to impose a special tax rate, like the Carson Subconservancy Water District. They're allowed a 7-cent tax rate, but they've been conservative and are only charging 3 cents. If they raise their rate under this plan, that money would have to be deducted from what other entities in this area get from property taxes.
How can that be fixed?
What we propose is allow local governments to keep the ability to increase their rate, but do it outside the cap. They would still be under the current statutory limitations, including the 6 percent a year revenue limit and the $3.64 per $100 of assessed valuation property tax cap.
Wouldn't that defeat the purpose of the property tax cap?
I don't think so. Most of these local entities have been very conservative. That way you wouldn't have one entity taking away from another and you wouldn't harm local governments who have kept their rates down. Carson City is a good example. Their rate is only $2.64. That's a full dollar below the limit. If they raised their rates, local governments would have to do it in a public forum and it should be put on the homeowner's tax bill separately, so they can see it.
So can this tax plan be fixed?
We believe it can. And we agree we need to do something to prevent people from getting hit with huge increases. The original intent of this has been to eliminate the windfalls that occurred because of increases in property values, and local governments totally support that. But we don't support affecting our basic ability to provide services.