Tax expert opposes property tax bill to help local entities
March 13, 2013
Sparks Democrat Skip Daly's plan changing property tax to help local governments drew opposition Tuesday as further complicating an overly complex tax system.
"I'm trying to look for a way to help cities and counties," he told the Assembly Taxation Committee. "It's designed to help those entities providing services closest to the people."
Assembly Bill 201 would do that by increasing the percentage of market value now used to calculate a property owner's annual tax bill. Under current law, the assessed value is set at 35 percent of market value.
During a period of 10 years, Daly's bill would increase that a percentage point each year to 45 percent. Since it is local governments that rely on property tax revenue, that would at least offset the state's 1.5 percent annual depreciation on buildings and other improvements.
He said that would protect the funding local governments and schools use for infrastructure improvements and to provide services such as public safety, parks and recreation.
"The bill would act as an offset to depreciation," Daly said.
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But the plan drew opposition from Carole Vilardo of the Nevada Taxpayer's Association, one of the state's acknowledged experts in tax law.
"I can appreciate what Assemblyman Daly is trying to do," she said.
Vilardo said, however, the bill would add yet another layer of complexity to a system most people can't understand.
"Property tax used to be the most stable source of revenue," she said. "I submit to you legislative changes over the years have made it more volatile.
"The system has become so convoluted that this is not a simple exercise in changing the property taxes," she said.
Vilardo recommended lawmakers look at an interim study similar to the one done over the past year on the equally complex Consolidated Tax formula that apportions money among the different layers of local government in Nevada. She said that study should include land factors, exemptions, recapture provisions, abatements and other elements of the property tax system.
Daly responded that everyone agrees the current system is too complex and needs major reform. But he repeated his statement that local governments need help stabilizing their property tax revenues. He said an interim study could help determine exactly how to go about making those changes.
The committee took no action on the bill, which is unlikely to win committee approval since it would need a two-thirds vote to do so.