Property-tax conflict enters Nevada governor’s race

Read this interesting excerpt from the Tahoe Bonanza

      “Montandon calls for system overhaul amid record number of appeals”

LAS VEGAS — Republican gubernatorial candidate Mike Montandon on Wednesday called for broad-based reform of Nevada’s property-tax system by returning to market-based assessments and scrapping property-tax caps enacted in 2005.

The three-term former mayor of North Las Vegas made the comments in the wake of a record number of property-tax appeals filed in Clark County that could impact more than 130,000 parcels and indications of a widening property-tax revolt in Washoe County.

From the Nevada Policy Research Institute News Bulletin, the surging number of property-tax appeals, up 33 percent in Clark County over last year’s record number, is a clear signal that Nevada’s taxable-value system is failing to keep pace with rapidly changing economic conditions, Montandon said.

Trained as a commercial real estate appraiser, Montandon said the state should abandon the taxable-value system that has been the basis for determining property taxes in Nevada since 1981.

“There’s not a chance that it is constitutional,” Montandon said during an interview at his campaign headquarters. “Let’s go to a market-based system.”

Nevada is the only state in the country that uses the taxable-value methodology to determine assessed values. Indiana was the last state to use a similar system and abandoned it more than 10 years ago after its Supreme Court ruled it was unworkable.

The basic problem with the taxable-value system is that it is not based on market values, critics say. Taxable value is the sum of the full cash value of land plus the replacement cost of improvements less 1.5 percent depreciation based on the age of the structure. Replacement cost is determined by using a private construction costing service — Marshal & Swift.

The system has become increasingly cumbersome in markets where undeveloped land sales are becoming increasingly scarce, such as many parts of Clark County. The lack of data requires assessors to use complicated appraisal methodologies to estimate the value of land.

The methods used by assessors vary across the state, leading to the likelihood that similar properties are not assessed equally, which would violate Article 10 of the state constitution.

Unlike the taxable-value system that values land and improvements separately, a market-based system would allow assessors to use readily available data on the sales of residential property to set assessed values for property taxes, Montandon said.

Montandon said property-tax reforms should be an issue for the 2011 Legislative Session and are too complicated and far-reaching to be broached during an upcoming special session.

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About the author

John Dougherty is the principal of and has long been one of America’s leading investigative reporters. He has been retained by the Nevada Policy Research Institute to report on critical issues of Nevada governance.

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