For months Assembly Majority Leader Barbara Buckley has made exceedingly obvious her party’s desire to squeeze windfall property tax revenues out of Nevadans for as long as possible.
Earlier this month she offered her complicated Nevada Property Tax Rate Relief Credit plan, a Rube Goldberg formula designed to continue sticking it to the same property owners already facing the biggest property tax increases. When that was laughed offstage, Ms. Buckley became explicit: While she might back a percentage limit on tax increases for owner-occupied single family homes, she wanted higher taxes kept on any property with a taxable value over $500,000.
Recently she was forced to realize even that class-warfare attack was still too blatantly hostile to fly. So now she and her colleagues have settled on yet a third scheme to expand the looting of Nevada taxpayers.
Rather than attempting to divide homeowners from each other, the new plan seeks to split homeowners living in their residences from those who live elsewhere and from owners of commercial property. In other words, this particular class warfare scheme takes a more cunning approach. It also exploits widespread voter ignorance about how they, too, actually end up paying the taxes supposedly imposed “on business.”
In truth, the scheme is unconstitutional on its face. The Nevada Constitution bars “split roll” property taxes—such as the proposal contemplates—under Article 10, Section 1. That section requires that the “legislature shall provide by law for a uniform and equal rate of assessment and taxation” of property (Emphasis added). The intent of such provisions, in all constitutions, is to prevent predatory property tax schemes where a majority gets together and levies higher taxes on an outvoted minority—precisely what legislative leaders are seeking to do here.
Unfortunately, the state’s Legislative Counsel Bureau in recent years has made a practice of telling Assembly leaders whatever they want to hear. Currently, the LCB line is that the 2002 constitutional amendment passed by voters to allow property tax reductions in certain cases of severe economic hardship to owners of single-family residences, can be used to entirely circumvent the “uniform and equal” clause—something never mentioned or proposed when the amendment was put before Nevada voters.
Thus the latest Buckley scheme, if passed into law, should—on the legal merits—be highly vulnerable to a court challenge. Yet it has been crafted to exploit the historic partisan political corruption of Nevada’s Supreme Court. It will also put a political monkey on the back of anyone who dares to file such a challenge.
The scheme, around which the Ds and their pet Rs are uniting, is a potent chess move. It appears from first reports to offer many homeowners, temporarily at least, some respite from their immediate problem. Facing possible increases of 20 to over 50 percent in their property taxes, many anxious homeowners are sure to greet the proposal’s reported offer of a three percent cap with relief. Their temptation will be to take the money and run—writing off business people and non-resident property owners. And anyone challenging this new unequal and ununiform standard can easily be made into a target for resentment and hatred—just the kind of demagoguery beloved by the ever-higher-taxes crowd.
Should the issue get before the Nevada Supreme Court, two possibilities exist: Either the court finds in favor of the legislation, or not.
If the court indulges its partisan instincts and finds in favor, Nevada Democrats will have successfully achieved, with little political cost, the imposition of a split roll property tax on Nevada businesses. That would insure a future of increasingly onerous tax burdens on entrepreneurs and job-creators, coupled with ever-more loot for the Nevada political class to spend. The Constitution’s “uniform and equal” taxation clause will have been gutted.
On the other hand, should the Nevada high court actually follow the Constitution and voters' intent, striking down the legislation, state law could revert to the current situation. That means the unconscionable property tax increases, both recent and pending, will continue—plundering the owners of all varieties of Nevada real estate.
So it is now clear why legislative leaders in Carson City have been slow-dancing us these many months: They never intended to simply identify and pass a real solution. Rather, from the start, they identified the anguish of Nevada property owners under the current tax system as an opportunity for new schemes for transferring resources out of the private sector and into their increasingly large and failing government fiefdoms.
Steven Miller is policy director for the Nevada Policy Research Institute.