At the capital: Multi-billion dollar property tax hike up for a Senate vote Monday
Did you know that Gov. Brian Sandoval has proposed not one, but two multi-billion dollar tax increases over the next 10 years?
The first one you know about. It consists of the making the sunset taxes permanent, creating a modified version of the margin tax and raising cigarette and slot taxes.
The second one you may not know about – but it’s coming up to a vote Monday on the Senate floor. You may even think the bill – SB119 – is a something conservatives should support, because the bill contains a repeal of prevailing wage requirements for school construction.
While repealing prevailing wage requirements is a very good thing and would save taxpayers 10 to 15 percent on construction costs, accompanying that repeal is a massive property tax increase. SB119 would authorize school boards around the state to conduct ten additional years of bonding – meaning taxpayers would be on the hook for an additional 30 years of debt – without needing a vote of the people.
This would cost taxpayers, specifically in Clark and Washoe County, between $3 to 4 billion, before including billions in interest costs.
Both the Clark and Washoe County School Boards are desperate for the legislature to approve this, because voters in those counties have specifically rejected similar property tax increases within the last three years.
So while eliminating the prevailing wage is a huge positive, the primary savings would come from spending new tax dollars more efficiently, not more efficiently spending the tax dollars we currently pay.
Now advocates of the bill may claim it’s a compromise, because liberals are fighting the removal of the prevailing wage requirement tooth and nail.
But since removal of the prevailing wage will save 10 to 15 percent in construction costs, a compromise would be eliminating prevailing wage requirements in exchange for authorizing one additional year of bonding. This would give voters a chance to decide in 2016 if they want to further raise their property taxes to pay for more school construction.
Having ten parts tax increase with one part savings isn’t a compromise, it’s a rip-off. Without changes, SB119 would be one of the largest tax increases in Nevada history.
Victor Joecks is Executive Vice President at the Nevada Policy Research Institute, a non-partisan, free market think tank.