They’ve met behind closed doors; they’ve brought hearings to the public. And after two months, 20-plus proposals and constitutional concerns, our state leaders appear to have built a consensus on how to end the property tax dilemma — yet still overwhelm the taxpayer.

Lawmakers scrambled to meet the March 31 deadline for a short-term measure to get a grip on property tax bills, some which threatened certain homeowners with bills 80 percent higher than last year’s. First, lawmakers intended on a simple plan — something like a flat 2-, 4- or 6-percent cap. 

Instead, they engineered a complex mathematical formula, that treats single-family, owner occupied homes differently than other properties. Rumors surfaced before Liberty Watch deadline that Sen. Dina Titus (D-Las Vegas) had enough votes to freeze property taxes. But Nevada’s leaders, for the most part, planned to cap property taxes at 3 percent each year starting July 1. The rate would only apply to single-family, owner occupied homes, not commercial property. Details for commercial lands were still being fine-tuned, but appeared to be capped at three or four times the owner-occupied cap. Gov. Kenny Guinn has already stated he’d sign it.

It’s being sold as a way to trim tax bills while establishing tax equity among different types of property. However, a tax-cap increase still produces an annually higher bill, whether it’s 1 percent or 90. Solving a tax crisis shouldn’t be interpreted as continuing to raise rates. 

Rather, solving the problem should mean relieving the burden that business and home owners have battled this last decade, particularly the past two years. Owners of commercial property still face double-digit percentage increases.

There are a couple alarming issues with this plan, introduced by Barbara Buckley (D-Las Vegas). First is the excessive cash flow that it generates for our ever-expanding and wasteful urban local governments.

In Clark County, anyone who owns property yet doesn’t reside on it will still pay a 12-percent increase over the current year, or about five times the projected rate of inflation. Overall, our local governments awash in cash from this year’s steep increase in property tax bills, and will see this year’s steep increase repeated in 2006, plus another 15 percent per year when then cap on inflation is added to the impact of new development.

“There is simply no justification for increasing revenue that large a multiple over the sum of the rates of population growth and inflation — unless you are one of the legislators who spend property tax proceeds when the Legislature is not in session,” said Sen. Bob Beers (R-Las Vegas).

Then there’s a much more unfortunate reality. Even with the current year’s exorbitant increase in property tax bills, most owners, by their own ignorance, will be duped into thinking their property tax concerns are solved. After all, lawmakers kindly came to the rescue with a 3-percent plan this session — an effective ploy to lull citizens back into a sense of complacency. 

But never forget that most of the current legislators voted just last session to increase property tax rates.

“They are not the taxpayers’ friend,” Beers continued, “though in this gubernatorial preseason they sure hope taxpayers will get amnesiac and draw that conclusion.”


By treating single-family, owner occupied homes differently than other properties, lawmakers are taking advantage of — and grossly stretching — the economic hardship clause of the Nevada Constitution.

Don’t buy it for a second. Nevada’s Constitution was amended several years ago to read: “Uniform and equal rate of assessment and taxation; exceptions and exemptions; inheritance and income taxes prohibited. The legislature shall provide by law for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal and possessory.

“The legislature may provide by law for an abatement of the tax upon or an exemption of part of the assessed value of a single-family residence occupied by the owner to the extent necessary to avoid severe economic hardship to the owner of the residence.”

The last subsection, subsection 10, is a three-mile-wide loophole. The Legislature has the sole authority to define “economic hardship” and provide special exceptions for this class of taxpayer that are different from the “uniform and equal rate of assessment and taxation” otherwise required.

This means the Legislature could write a law defining “economic hardship” as “a Nevada taxpayer” if it wanted, and even this tragic half-set of tax-hiking Supreme Court Justices could not reverse it, no matter what the promised payoff.

So among the property tax proposals, were any taxpayer friendly? 

One — TABOR, an acronym for Taxpayer’s Bill of Rights.

Beers proposed TABOR through Senate Joint Resolution 5. It looks to amend Nevada’s Constitution and conconstrain future government growth to an annual increase equal to population growth plus inflation. It also contains a few other details: a two-thirds majority vote of the Legislature or local government to raise taxes beyond TABOR’s limit; and a vote of the people in the ensuing general election to either ratify or reject it.

According to www.nvtabor.com, if any government agency’s revenue exceeded the prior year’s revenue by more than population growth and inflation, the excess would be refunded to taxpayers.

The idea prevents government spending from outpacing the people filling government coffers.

Beers’ proposal isn’t original, though. Colorado voters amended their Constitution for TABOR a dozen years ago. Since then, more than $3 billion has been refunded. More importantly, that money wasn’t spent hiring more government employee managers to fuel future budget shortfalls.


In the paper “Tax Revenues in the American States, The Tax Revolt, and Colorado’s TABOR Amendment,” authors Derek Johnson and Ryan McMaken detail the story of Colorado’s Taxpayers Bill of Rights.

TABOR endured a bitter journey to the Centennial State’s constitution, mostly by those well connected to elected officials. TABOR was successful, though, because “a great gulf was perceived between those who pay the taxes and those who spend them,” McMaken and Johnson wrote.

Leading up to the 1992 election, everyone from lobbyists to elected officials was in frenzy over the initiative. Both parties, local governments and interest groups fought the measure. These outfits, including the press, promoted fear, contending doom lay in wait should government spending be subject to a vote of the people if it exceeded an established annual rate of growth. Voters paid little mind. 

While the federal government has only increased its workforce by 20 percent in the last three to four decades, local and state governments have nearly doubled in terms of employees, note McMaken and Johnson. In the last century, state and local governments have increased spending by 1,800 percent per person, a figure that totals somewhere around $7,000 per person.

Why such a difference between local and federal governments? States are more experimental with taxation. After all, they have to be creative to compete with other states, and draw neighboring businesses and residents. Excise taxes, sales taxes and, yep, you guessed correctly, property taxes are all tinkered. 

The creativity is endless, but while Nevadans are looking to their elected leaders to handle the state’s property problem, the people have not always turned to politicians for relief. And in eyes the office holder, when voters fix an issue themselves, that’s a problem.

So states try restrictive forms of limitation to convince citizens and prevent them from taking matters into their own hands. For example, lawmakers may establish expenditure limits — placing caps on spending increases from year to year. Sound familiar?

In McMaken and Johnson’s paper, they highlight Mandy Rafool of the National Conference of State Legislatures on this matter. Rafool contends that state limits have not proven to be effective. However, when combined with a local restriction such as a vote by the people, limiting government growth tends to be successful.


According to McMaken and Johnson, tax revolts in California and Missouri led to the possibility of Colorado’s TABOR, which is recognized as the most wide reaching tax limitation in the country. In 1978, Californians passed Proposition 13, limiting the extent of property tax increases. California’s experience with Proposition 13 alone was like giving someone with a broken leg two aspirin: short-term relief only. It didn’t take long for California’s to shift its revenue expansion to things other than property tax: income tax, user fees, etc. Today, most Californians sell their homes and move out of state upon retirement, mostly because their government has become the advance guard of American Socialism. With Missouri, voters in 1980 restricted the amount of revenue the state could take in.

TABOR is the “behemoth” of tax restrictions. In Colorado, it limited revenues and appropriations, and gave money back when there was an excess of revenue. It also put new taxes and proposed increases in taxes before a vote of the people. TABOR also prevented the government from finding other ways to make up for a drop in revenue.

The bottom line is TABOR prohibits the sadly common government practice of casting desperately about for some new service to offer because government has more of our cash in its pocket than expected.

Colorado dropped from 28th in 1989 in total tax collections to 43rd in 2004. TABOR’s effect on that is unclear, according to McMaken and Johnson, but TABOR prevented tax revenues from keeping up with personal income growth in Colorado. That translated into a thriving private sector, which has “consistently outpaced the government sector in growth, and by healthy margins.”

For the six years following TABOR’s enactment, Colorado’s ballot had a question to increase taxes or repeal TABOR. All attempts failed. However, local governments were able to raise taxes via the ballot more than 400 times in the years since, because officials were more careful in only requesting tax increases when absolutely necessary.

While people should have the right to vote for or against the taxes they pay, don’t count on elected officials giving voters that right — especially in Nevada. Beers’ proposal never would pass in the Assembly, dominated by by Democrats. Our representatives (like all others) are focused on expanding government, not limiting it.

For government growth to ever be controlled in this state — where lawmakers for the past three sessions have become increasingly greedy — Nevadans (like Coloradans) will need TABOR on the ballot.

Nevada’s coffers are overflowing, stemming mostly from 2003’s tax hikes. That year, Gov. Guinn justified raising taxes in record amounts because of a concocted $704 million budget shortfall. But with the tax increases — and double-digit record growth with the sales tax and gaming — Nevada has generated an additional $850 million in unprojected revenue. That’s a greater figure than the record tax hikes we supposedly and so desperately needed just two years ago. So far, Guinn has suggested rebating $300 million to taxpayers, transferring $200 million to the state’s “Rainy Day” savings account, spending $80 million on one-time projects, and nothing (yet) with the remaining $270 million in additional surplus.

So what are lawmakers to do about property taxes? Continue to raise them, it seems. The Buckley proposal isn’t doing property owners any favor. It’s just guaranteeing government’s ongoing expansion.

TABOR gives government the raise it needs to provide the services its people expect. It prevents bureaucrats from flooding their states with the mouth-watering ambitions of office holders. It’s not a gamble; it’s tested and proven. Coloradans were the leaders; Nevadans should intend to follow. LW