Move To Dispense With The Reading

Move to adopt the amendment

Thank you, Madame President. This is a very simple amendment, but, with your permission, I'd like to address the contents of the bill a bit in order to better explain where it fits, how it works, and why it's needed. AB 489, as amended in committee, puts a 3 percent cap on property tax bills beginning in 2005 for owner-occupied homes and further caps all other property, i.e. business and open land, at 8 percent. There is no sunset provision.

Now, there are parts of this bill that I like--a 3 percent cap for homeowners is closer to a freeze than any other proposal considered; it's certainly better than the 6 percent originally proposed. The bill also contains an interim study which I've called for from the beginning. But there are parts I don't like, which is why I bring forth this amendment to freeze property tax bills for homeowners only for one year. Let me explain:

First, this so-called hybrid is great for Wal-Mart, for people in expensive homes, for out-of-state land speculators, and for gaming companies whose property values have skyrocketed in recent years. It does not, however, help the little guy living in the heart of urban Nevada or in the wilds of rural Nevada whose property has not increased in value. A 3 percent cap, which is, in effect, a guaranteed annual increase of 3 percent, represents a huge savings for the millionaire in the home on the golf course or in the luxury high-rise condo, but it does nothing for homeowners in older, more depressed areas where a 3 percent increase annually is about what they are paying now, if not more. Meanwhile, their cost for gasoline has gone up, along with their power bills, their health insurance (if they have any), their loaf of bread and gallon of milk, their kids'
braces, and their aging parents' drug costs.

It makes no sense to me to give a huge break to some, including speculators who have caused much of the problem, and yet give no break to those less fortunate who are working hard to own a modest home.

Some will argue that local governments and the State can't afford a one-year freeze for homeowners. Yet they can afford a permanent 8 percent cap on businesses. Please. You've seen the spread sheets. They change constantly; staff has to put the time on the bottom in minutes just to keep them straight. It reminds me of last session.

And, how good are these numbers anyway? What do they really mean? With all due respect, they've been calculated by the same experts who gave us projections during the special session on the various scenarios--in the end, they bore little resemblance to reality--some projections turned out to be very low, others very high. How can these numbers be any more accurate?

Furthermore, these projections are for one year only; staff admits they can't project beyond one year, that they can't calculate growth in assessed value beyond 2005. Finally, remember these are property tax projections only; we have not seen the figures for gaming, sales, liquor, cigarette, and real estate transfer tax projections, all of which are coming in at record high levels.

Even so, I still offer you these numbers, which I've handed out. You can see that the difference in terms of revenue for government is very small when you compare the 3 percent cap in the bill and a freeze; but when divided up, it can make a big difference for the little homeowner. Take the Clark County School district, for example, Under the 3 percent cap, they would get $387,314,222; under the freeze, they would get $383,131,516, which is still a 7.6 percent increase over last year. At the state level, the difference in revenue generated is between 7.2 percent growth with a 3 percent cap and 6.0 percent growth with a freeze. The difference in the hit to the DSA is about $6.2 million. That's not much in a year when a half-a-billion dollar surplus is anticipated.

Third, if you had sat in the Finance Committee like I have for the past two months, you'd realize that the Governor's proposed $300 DMV rebate is a pipe dream. It's not going to happen. There have been more change orders, more revisions, more mistakes in the budget than ever. And there are dozens of new projects, all worthwhile, which require funding--$10 million for a cancer center, a new $11 million Ely courthouse, $14 million for new voting machines, $19 million for economic development, $2 million for Boys and Girls Clubs, $70 million for allday kindergarten, etc.

Don't get me wrong. These are good programs and should be funded in a year when there's extra money because we need to invest in Nevada's future. We need to do everything we can to move off the bottom of every good list and the top of every bad list as we look forward to the kind of state we want to be 10 years from now.

At the same time when there's a windfall, we should give some back to the citizens to reinvest in the State in the ways that fit their own personal needs. So let's freeze property taxes for a year and give a tax rebate.

That's what a one-year freeze would be. Take, for example, a $150,000 house in Clark County that increased in value in 2005 to $200,000. The assessed value increases from $52,500 to $70,000, and the tax liability increases from $1,617.79 to $2,157.05. With a freeze, the tax bill would not increase; it would be the same for next year, thereby giving the homeowner a guaranteed property tax rebate of $539.26.

Admittedly, the more your property has increased, the more rebate you get; but under the freeze, at least everybody gets something. Isn't that fair?

So I say, let's give Nevadans a real rebate now in the form of a property tax freeze. They will get more than they would have gotten under the Governor's proposed DMV rebate; more people will benefit; and by passing this amendment now, we guarantee something will be set aside for taxpayers before the final consideration of projects occurs in the frenzied, final days of the session. Local governments can still get all the growth money as new and improved property comes on the rolls at value. The State can make up any catastrophic losses to local governments in rural Nevada and school districts with funds from the huge surplus we are anticipating. And there will still be enough money left over to invest in such worthwhile projects as Millennium Scholarships and mental health facilities.

Everybody wins.

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