A good move for Nevada
April 10, 2005
Nevada residents spoke. And this time the politicians listened.A property tax relief bill signed into law last week by Gov. Kenny Guinn will provide much-needed relief to Nevada property owners who have been sending the assessor more and more money in recent years. For residents of Lake Tahoe, where property values have doubled and tripled in the last decade, the cap may save many from having to sell.
Following a civil debate, legislators compromised on a 3 percent cap on growth on homeowners’ tax roles. Proposals will also cap the growth rates for Nevada businesses, which have also suffered in the heated real estate economy.
Throughout Nevada homeowners have been complaining about this growing problem: Rising home values are great for current homeowners, but can’t be realized until the homeowner sells. In Lake Tahoe, it is not unusual to see homes valued in the $150,000-$400,000 not that long ago surpass the $1 million mark. When the actual value of a home exceeds the rate of inflation, there are bound to be some homeowners at the bottom of the economic spectrum – especially retirees living on fixed incomes and Social Security – who will not be able to afford the increases.
Legislators made the move largely to avoid a ballot measure similar to California’s Proposition 13 that capped property tax growth in the 1970s. While some may not find Nevada’s restrictions to be aggressive enough, the chances of a Proposition 13 in the Silver State are largely diminished. It would not be surprising to see a movement to further restrict property tax growth, but it would be surprising to see one succeed. Many of California’s homeowners would have been priced out of the state without Prop. 13, and Nevada legislators rightly recognized the same situation developing at home.
Tax rates should be based on what is fair and necessary to support the government. In theory, Nevada should not need more money than the relative increase in population growth and inflation. To cut taxes to this reasonable baseline the Legislature has ensured that the Silver State remains an attractive, affordable place to live.
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