With only one of 63 Nevada lawmakers voting no, legislation to cap taxes at 3 percent for homeowners and 8 percent for businesses is on its way to the governor.
Gov. Kenny Guinn praised lawmakers for what he called an excellent piece of legislation protecting Nevadans from huge increases in their property taxes while ensuring local governments and schools keep enough money to provide services.
"This is a tremendous moment for the people of Nevada," Guinn said.
He said state and local governments will have to "tighten their belts" because they won't get large increases in revenue they had anticipated. The state, he said, would have to put some $4 million into public school budgets over the coming two years. But, he said, the legislation strikes a good balance.
Asked if it would stave off efforts to impose a California style Proposition 13 tax slashing initiative, Guinn said he hoped so.
"Why we'd want to do one of the worst things they've done I don't know," he said. "This state is headed in the right direction. We're certainly miles ahead of California (in tax policy)."
Senate Majority Leader Bill Raggio, R-Reno, made a similar comment when asked about Proposition 13: "I guess we should ask all the business people who walked out of California if it was a good thing for them."
The issue has been raised by Sharron Angle, R-Reno, the only lawmaker who voted against AB489 on Friday. She charged that the plan capping property tax increases for homeowners "appeases special-interest groups and big government."
Angle is heading the drive to put a tax cutting proposal similar to Prop-13 on Nevada's next election ballot.
The compromise between Senate and Assembly on AB489 was worked out Thursday night in a conference committee and ratified by both houses Friday morning.
The legislation, AB489, caps property-tax increases for single-family, owner-occupied homes at no more than 3 percent a year and annual increases for all other properties including businesses at no more than 8 percent. Only one county, Clark, would have exceeded that 8 percent cap.
Rural counties can set an increase of double the inflation rate over the past year so that those with negative valuation growth wouldn't be forced to actually decrease taxes and cut services.
Changes made late Thursday added provisions designed to give small business more of a break and to provide relief to low-income renters.
The legislation instructs the Tax Commission to provide a simple, easy-to-understand form for applying to get a tax break based on the income approach to valuing a business property. That law exists, but is so difficult to use it normally requires accountants and lawyers to present the case to the Tax Commission.
The legislation also allows landlords to get the 3 percent cap instead of the 8 percent limit if the rent they charge is at or below the federal Housing and Urban Development's rates for low-income housing. Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said that would help keep rents from rising because, if they went past the HUD rates, the landlord's taxes would increase sharply.
The legislation will be signed into law well within the time county assessors and treasurers said they needed it in order to make the changes on this coming year's tax bills. Those property-tax bills must be mailed by the end of June.
Between now and then, assessors have to recalculate property taxes on every parcel of land in the state.
n Contact reporter Geoff Dornan at email@example.com or 687-8750.