Las Vegas Sun

March 29, 2024

County and city managers: Time for action on property tax caps

Officials from Clark County and the city of Las Vegas may compete for attention generated by the tourism sector, but they’ve teamed up on at least one issue — the need to fix property tax caps.

On Thursday morning, Clark County Manager Don Burnette joined city managers from Las Vegas, Henderson and North Las Vegas for a wide-ranging panel discussion sponsored by NAIOP Southern Nevada, a commercial real estate development association, at the Orleans casino.

“The property tax caps, I’m here to tell you, are broken,” Burnette said. “We as a community need to do something about it.”

The caps were enacted into state law in 2005 to protect homeowners from major tax increases as property values skyrocketed. The law capped year-over-year property tax increases at 3 percent for residential properties and 8 percent for commercial ones. The problem: No one anticipated the recession.

Amid the economic downturn, property values plummeted more than 40 percent statewide, meaning government entities’ revenue stream suffered as well. Even though property values are slowly increasing again, property tax growth is expected to remain at 0.2 percent in the next fiscal year thanks to a complicated tax formula.

The property tax abatements — or, in other words, the tax deductions — resulted in about $403 million never reaching government agencies to be used for services this fiscal year, Burnette said.

Betsy Fretwell, Las Vegas city manager, agreed with Burnette’s assessment, calling the situation an unintended but scary consequence of the recession. Property taxes, she said, were a significant part of every local government’s budget and also the most stable form of funding.

Burnette said he was willing to explore changes that would improve the funding stream and appease the community.

“We cannot afford to go another legislative session without having some changes to the law,” he said.

Here’s what else the city managers touched on during the panel discussion:

Medical marijuana

The medical marijuana business hasn’t been the financial windfall for Las Vegas that some advocates predicted it would be.

Twelve dispensaries are operating in Las Vegas, but despite the tax revenue and fees, the city has barely broken even on hiring licensing officers who have helped process the surge in applications, Fretwell said. Regulation and enforcement of the new industry takes money, which hasn’t materialized very quickly so far.

“The money is not some panacea,” she said. “It’s not going to plug a whole lot of other gaps. It is relatively minor at this point.”

Henderson economic development

A baked-goods company could be the next addition to the industrial park near Henderson Executive Airport.

Henderson is negotiating with Chicago-based Turano Baking Co. to sell 33 acres that would house a manufacturing facility, said Robert Murnane, Henderson’s city manager. The family-owned company pays higher-than-normal industry wages, he said.

“I think culturally they’re a really good fit for Henderson,” he said. “And who doesn’t love the smell of fresh-baked bread?”

North Las Vegas growth

Faraday Future’s plans to build a factory in Apex Industrial Park have garnered much of Southern Nevada’s economic development chatter.

Yes, it’s a boon to North Las Vegas, but it’s far from the only growth opportunity in the northern suburb, said Qiong Liu, the city manager. Her sentiments echoed those offered in recent weeks by North Las Vegas Mayor John Lee.

Liu pointed to vacant land around the VA Southern Nevada medical complex, which sits off the 215 Beltway in North Las Vegas, as an example. The city hopes to attract related industries, such as medical researchers, to take residence in land west and north of the hospital, she said.

A strip of land to the south is slated for retail use benefiting the employees, patients and visitors of the medical complex.

“We want people to have a place to go have lunch or drop off (clothes) at the dry cleaners,” Liu said.

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