Local officials are hoping to persuade Nevada lawmakers to modify the state's property tax cap law in the legislative session that begins Feb. 6.
Assembly Bill 43, submitted by the Nevada Association of Counties, would establish a floor of 3% for annual commercial property tax increases. It would not remove existing stationary caps currently in place that keep residential property taxes at 3% or less and commercial property taxes at 8% or less.
The tax cap law was enacted in 2005 to protect residents from soaring property taxes. However, the Great Recession reversed that trend, leaving cities and counties in a financial bind.
"We're seeing an increased level of services needed from our taxpayers but the revenue that is used to provide those services isn't keeping up," Clark County Manager and former CFO Yolanda King told the Las Vegas Review-Journal.
Updating Secondary Caps
In addition to establishing a floor for property tax increases, AB43 also aims to change the formula in the tax cap law used to predict changes in the Consumer Price Index (CPI). The bill would change the CPI used from a single year to a 10-year rolling average.
"AB43 will hopefully smooth out what the CPI percentages look like over a period of time, rather than at one part of time," King said. "You will and can avoid the fluctuations in what you will pay from year to year."