Passing a bond in November to fund Douglas County School District's capital improvement projects will not raise property tax, according to the district's business services director Holly Luna.
"Whether or not a bond passes, existing homeowners' tax bills will continue to increase by only 3 percent a year because of abatement laws," she said.
"Voters have to decide whether or not an existing tax rate keeps providing revenue for the school district or goes to another county entity."
Financial advisor to the district Marty Johnson, with JNA Consulting, explained tax abatement to school board members at their meeting Tuesday night.
"In 2005, the Nevada Legislature passed a law that capped the percent a homeowner's tax bill could increase to 3 percent a year, whether it was caused by a rise in assessed value or a raise in the tax rate itself," Johnson said.
He said the law does not apply to new homes, and was enacted to check skyrocketing values of existing homes throughout Nevada.
"Abatement is part of the tax bill that is not being collected," said Johnson. "And it stays with the address, not the owner."
Johnson said the district currently levies 85 cents per $100 of assessed value in property taxes. He said 10 cents of that is a debt service tax rate ensured by having outstanding bond payments.
When the district's outstanding bond payments retire in 2011, it will lose that 10 cents, unless new bonds are issued, dropping the district's total amount of property tax revenue to 75 cents per $100 of assessed value.
"When you let a tax rate go, you never get it back," Johnson said.
He said if lost, the 10-cent rate may be used by other county entities and wouldn't lower the homeowner's tax bill.
"The tax bill for long-time homeowners in Douglas County won't change, but allocation will change," he said.
Tax abatement is one of many issues being discussed by both school board members and the Keep Improving Douglas Schools committee.
The committee was formed in September to explore funding options for the district's capital improvement projects, including the issuance of bonds.
If the committee recommends new bonds to the school board, to retain the district's debt service tax rate, the board will have until July to place a bond question on the ballot for November's election.