Property tax inequities and road repair money top tax study priorities
Property tax inequities such as those hitting Incline Village residents and how to divide road repair money top this year’s priorities for the legislative committee studying Nevada’s tax system.
The committee headed by Sen. Ann O’Connell, R-Las Vegas, hopes to recommend repairs to the existing property and gas tax rules during the next session of the Nevada Legislature.
O’Connell said the most pressing problems are inequities caused by how real property is depreciated and the skyrocketing values in areas such as Incline Village.
Depreciation reduces the value of a house or business structure by 1 1/2 percent a year. Las Vegas governmental tax expert Marv Leavitt said that has become a serious problem for many of Nevada’s counties which have relatively slow growth and numerous old houses.
“You can have two houses next to each other, one built last year and the other built 50 years ago that are very similar in value but very different in taxes,” said Leavitt.
That problem has caused complaints about inequities among neighbors in numerous small towns including Carson City. O’Connell said it is especially difficult for county assessors to deal with and the source of one of their most common complaints.
The other issue, she said, hits areas such as Incline Village and certain areas in the Las Vegas area where property values have gone up astronomically in recent years.
Longtime Incline residents have complained bitterly that rising property values are raising their taxes so much that they can’t afford to keep their homes.
O’Connell said she is sympathetic to the longtime resident who is being forced out and wants to do something that will make sure they can keep their homes, especially after retirement.
“We’ve got to find a way that we don’t have these spikes in property taxes,” said O’Connell.
But she said the issue isn’t about giving one property owner a tax break over others. She said the committee’s problem is to find a way to be fair with those residents.
The committee will also take up the difficult issue of how Nevada should split up gas tax money that pays for local road repairs. Larger and faster growing areas led by Clark County have complained the existing system. Their complaint is that it doesn’t consider growth. Smaller, rural counties say a major change such as giving each county the gas tax money would leave them without enough money to keep roads usable since some of those counties have only a few gas stations to generate the tax. Esmeralda and Storey counties, in fact, have just one gas station each.
“The goal is to develop a formula which fairly distributes the money according to need,” said Leavitt.
The first step, according to O’Connell, will be to get the counties and Nevada Department of Transportation to complete an accurate inventory of the city and county maintained roads in each county. The state and federal highway system is not included since that is maintained at state expense.
According to Assemblyman David Goldwater, D-Las Vegas, vice chair of the study committee, the group also needs to look at developing a statewide policy regarding permissible uses of room tax revenues and consistency among the counties in how those room taxes are applied.
The committee will also look into existing tax exemptions, the effect of initiative petitions on taxation policy and whether the personal property tax should be changed or abolished.
And Sen. Joe Neal, D-North Las Vegas, served notice that he intends to at least make sure the committee considers whether the gaming industry is paying its fair share. Neal ran for governor in part on his proposed gaming tax increase in 1998.
The committee agreed to set up nine separate subcommittees to study specific tax issues including those issues.