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Jul. 12, 2008
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TAX LIABILITY CUT ABOUT $5,000: Gibbons tax break questioned

County assessor felt pressured, 'uncomfortable'

By SANDRA CHEREB
THE ASSOCIATED PRESS

A vacant rural parcel owned by Gov. Jim Gibbons is shown in Lamoille on Thursday. Gibbons asked for and received a property tax break on the 40-acre plot in Elko County that saved him thousands of dollars a year.
Photo by The Associated Press



Gov. Jim Gibbons
His spokesman called any suggestion of intimidation 'ridiculous'

RENO -- Gov. Jim Gibbons asked for and received a property tax break on a vacant rural parcel he owns in Elko County that saved Nevada's chief executive thousands of dollars a year and left the county assessor feeling pressured.

Records show the first-term Republican governor lowered his annual property tax liability to $15 from about $5,000 on the 40 sagebrush-dotted acres he owns near Lamoille by getting it designated as agricultural land rather than residential.

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    • Elko County Assessor Joe Aguirre, who said he first objected to the designation and then allowed the change to take effect after requests from the governor and an attorney who serves on the Nevada Tax Commission, said the process made him "feel uncomfortable."

    "To say I was put in an awkward position I think is an understatement," Aguirre, a Republican, said.

    Gibbons spokesman Ben Kieckhefer called any suggestion of intimidation or criticism of the cattle grazing deferral "ridiculous" and said the governor's property had been grazing land for years and still is.

    He described the legal transaction as "regular" and said there was a lease agreement between the former owner and the governor showing it would be used for grazing.

    "I don't think there's any question," Kieckhefer said.

    "This land has been used for this purpose and had this exemption for as far as anyone can remember," he said. "There's no house on it. There's no power on it. There's cattle on it."

    Nevada allows agricultural property tax breaks to help farmers and ranchers who eke out a living from the state's harsh landscape. In the early 1990s, the Legislature, concerned that people wealthy enough to buy elbow room were taking advantage of the agricultural deferment, raised the annual farming income threshold on tax-deferred land to require they take in at least $5,000 from agricultural uses. Previously only $1,500 a year was required.

    The governor, who is steering the state through a budget crisis after tax revenues fell off dramatically, and first lady Dawn Gibbons purchased the rural property for $575,000 in August 2007.

    They said they financed the purchase by trading other property they owned and using Gibbons' congressional pension and that they planned to build a home there when they retired. The governor has since filed for divorce.

    Gibbons bought the land from former Washoe District Judge Jerry Carr Whitehead, who owns about 3,000 acres in Elko County.

    Aguirre said Gibbons asked for the agricultural deferral a few weeks after buying the land, but the assessor didn't approve it.

    "I told him I didn't think he would qualify," Aguirre said. "As is, he can't qualify."

    After the governor's visit was followed by letters from a Nevada Tax Commission member, Aguirre said he did nothing, letting the deferral take effect by default for one year.

    Aguirre said the case gnaws at him as he approaches retirement next month after 17 years in the elected position.

    Given the purchase price, Aguirre said the property if designated for residential use would have an assessed value of $201,250, with annual taxes of about $5,000. Under the agricultural deferment, he said the value was slashed to $1,620, and taxes reduced to $15.

    Aguirre said the property may have been part of a larger ranch, but it now must qualify for the agricultural deferment on its own.

    One way to do that, according to the Elko County district attorney's office, is to show the owners received at least $5,000 gross income from agricultural pursuits in a preceding year.

    Aguirre said he told Gibbons last September, after the governor came to his office, that the property wouldn't qualify because it wasn't large enough to earn that much income.

    Forty acres isn't a lot of ground for an animal that needs 800 pounds of forage a month, industry experts said. The Nevada Cattlemen's Association said one rule of thumb is 100 acres per cow if the land is mostly scrubby sagebrush, though less is needed if the land has higher quality feed and water.

    Grazing land lease rates range from $1.35 to $20 per animal unit month, meaning that if Gibbons' 40 acres could support a cow, the going rate would be $240 a year on the high end, about $500 if it supported two cows.

    A month after Aguirre told Gibbons that his property would not qualify, his office received an application for the agricultural assessment on Gibbons' behalf from John E. Marvel, an Elko attorney and member of the Nevada Tax Commission of which Gibbons is an ex-officio, nonvoting member. Marvel has served on the panel since 1990, and was last reappointed by former Gov. Kenny Guinn in 2005. Marvel is the son of longtime Assemblyman John W. Marvel, R-Battle Mountain.

    "To me it seems odd that a member of the Tax Commission was involved," Aguirre said. "I did feel uncomfortable."

    Kieckhefer rejected Aguirre's suggestion that Marvel's involvement was improper.

    "There's absolutely zero relation between the assessment of this property and the Nevada Tax Commission," Kieckhefer said.

    The commission oversees the Department of Taxation, setting regulations, enforcement and audit policies. It also hears taxpayer appeals of hearing decisions and is charged under law with ensuring taxes are applied consistently by assessors among taxpayers.

    Marvel was retained by the governor, Kieckhefer said, because "he's the attorney who does this in Elko," and "because he's a damned good attorney."

    Marvel did not respond to three phone calls by the AP to his office seeking comment.

    In a letter accompanying Gibbons' application, Marvel said his clients "will be generating in excess of $5,000 of gross income per year from agricultural use."

    Aguirre wrote Marvel that he needed proof of the claimed income. He also said that to qualify, "half of the feed to maintain the livestock on the property" must come from that land.

    On Dec. 26, Marvel submitted copies of the front side of two checks from Whitehead to Gibbons in the amounts of $1,500 and $4,227, with notations saying they were for 2007 lease payments, according to documents obtained by the AP. Aguirre said from the documentation provided he couldn't determine whether the checks had been cashed and he didn't feel comfortable questioning the governor or Marvel on that matter.

    Whitehead, contacted by phone, declined to comment, saying it was a private matter.

    Aguirre said before Gibbons' tax break became local coffee shop fodder, one or two people a year would apply for agricultural deferments. In the past few months, he's had about a dozen. "That's my main concern. To protect the legitimate people. The mom-and-pop people," Aguirre said.

    Debate over tax breaks for so-called "hobby farmers" isn't new, and Assemblyman John Carpenter, R-Elko, said the governor's deferral could be used as an example of the need to review the law again during the 2009 Legislature.

    "The law the way it's written is being abused, I don't think there's any question about it," Carpenter said. "The governor is not the first one to do it.

    "I think the law needs to be rewritten to tighten it up."

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    benighse wrote on July 15, 2008 11:05 AM: THE ETHICS COMMISSION IS ONE WAY TO ADDRESS THIS MATTER.

    BUT HOW ABOUT A LOCAL CITIZEN GRAND JURY PROCESS IN ELKO COUNTY THAT CAN GET TO THE BOTTOM OF THIS MESS SINCE IT IS THEIR PROPERTY TAX MONEY THAT IS BEING TAKEN ILLEGITIMATELY OUT OF THE COFFERS--AND THEY WONDER WHY THEY CAN'T AFFORD A BIGGER BETTER JAIL, FIRE DEPARTMENTS, COURTS, AND JUSTICE SYSTEM, LET ALONE MORE TAX PAYMENTS FOR ROADS AND GOVERNMENT SERVICES.

    ANOTHER REASON A GRAND JURY PROCESS WOULD WORK BEST IS THEY CAN COMPEL TESTIMONY. THEY COULD ALSO FIND OUT IF THIS IS SOLELY A BENEFIT TO THE GOVERNOR, OR IS IT THE TIP OF THE ICEBERG WITH MANY WEALTHY LAMOILLE CANYON "HOMEOWNER/RANCHER/LANDOWNERS" DOING THE SAME THING. WHEN YOU READ THE NEWS STORY, YOU GET THE FEELING THAT THERE IS MORE HERE THEN HAS BEEN REVEALED. HOW MANY OTHERS HAVE SIMILAR PROPERTY TAX REDUCTIONS/EXEMPTIONS ON PROPERTY THAT WOULDN'T SUPPORT A COW, AND WOULD BARELY SUPPORT A JACKRABBIT?

    CALL DISTRICT ATTORNEY GARY D. WOODBURY AT 775-738-3101 AND FIND OUT IF A GRAND JURY IS BEING CONSIDERED.

    LET THE TRUTH BE TOLD, WHATEVER IT IS. IF IT HELPS THE GOVERNOR, FINE; IF IT HELPS THE GOVERNOR RESIGN, FINE TOO.

    JUST GO GET THE TRUTH!


    benighse wrote on July 15, 2008 11:01 AM: IN CASE THE ELKO COUNTY DA DOESN'T GO FORWARD WITH A GRAND JURY INVESTIGATION, THEN YOU CAN ASSUME THAT THE PROCESS GOVERNOR JIM USED THERE IS CONSIDERED 100% LEGITIMATE FOR EVERYONE IN THE STATE. IF THAT'S THE CASE THEN EVERYONE IS ENTITLED TO LEARN FROM HIS ACTIONS AND BENEFIT BY REDUCING THEIR PROPERTY TAXES.

    SO LET'S TREAT THIS AS A "HOW TO LOWER YOUR PROPERTY TAXES" EDUCATION EXERCISE FROM GOVN'R JIM WITH AN EXAMPLE THAT MEETS ALL THE CURRENT REQUIREMENTS OF LAW.

    START WITH THREE PEOPLE AS FOLLOWS AND THEN EXPAND TO ALL YOUR FRIENDS AND NEIGHBORS:

    1) THREE FRIENDS OR NEIGHBORS ON YOUR 1/4, 1/3, 1/2 OR 1 ACRE $575,000 "RETIREMENT HOME" LOTS START RAISING 2 AGRICULTURAL RABBITS.

    2) NEIGHBOR 1 LEASES HIS "STUD BUNNY" TO NEIGHBOR 2 FOR AN ANNUAL $5,000 AGRICULTURAL "STUD FEE SERVICE" CHARGE.

    3) NEIGHBOR 2 PROVIDES HIS AGRICULTURALLY IMPREGNATED "BLUE RIBBON BUNNY" TO NEIGHBOR 3 FOR A $5,000 LEASE FEE TO RAISE UNTIL "BANNER BABY BUNNIES" ARE BORN IN HIS "HONEY BUNNY SHED."

    4) NEIGHBOR 3 NOW PROVIDES A COUPLE "LITTER BUNNIES" AND A $5,000 ANNUAL LEASE FEE FOR NEIGHBOR 1 TO RAISE NEWEST "HONEY BUNNIES" INTO FUTURE "STUD BUNNIES" AND "HAREM BUNNIES" THAT WILL BECOME "BLUE RIBBON BUNNIES."

    5) ALL THREE NEIGHBORS NOW TAKE THEIR PROOF OF AGRICULTURAL USE AND PROOF OF $5,000 ANNUAL LEASE PAYMENT EARNINGS TO THEIR LOCAL TAX ASSESSOR.

    6) TAX ASSESSOR SAYS THIS MEETS ALL THE GOVERNOR JIM PROPERTY TAX REQUIREMENTS AND ALL WILL BE TREATED EQUAL--$39.00 TAX!

    GOT IT??

    REPEAT EVERY YEAR AS NEEDED.

    BY THE END OF THIS PROCESS WE OUGHT TO BE THE AGRICULTURAL "BUNNY" CAPITAL OF THE WORLD, AND HAVE NO PROPERTY TAXES TO PAY FOR ANYTHING IN NEVADA. THE LAST ONE TO LEAVE, TURN ON THE NUCLEAR WASTE RADIATION LIGHT.

    WHAT WORKS FOR GOVN'R JIM, OUGHT TO WORK FOR YOU.


    Heidi Bohan wrote on July 13, 2008 12:30 AM: Maybe we need an assessor with a stronger back bone that doesn't change the rules when he feels "pressured." Anybody else that doesn't pay the appropriate taxes loses their property. Just because he "asked" doesn't mean he should have "received."


    tim wrote on July 12, 2008 10:56 PM: all state workers are like the gov,except they force the taxpayer against the wall.just as dirty,except they don't say they work for the state,but it's obvious just the same.that's the only reason they post.need a liberal tax and spend governor to boost their pay.sad,but true.


    Johnathan L. Abbinett wrote on July 12, 2008 09:18 PM: What is truly pathetic is even if the Governor had physically assaulted the Elko County Assessor in a parking garage by throwing up against the wall and demanding he put out or else - the Governor would still have gotten away with, yet another, criminal act - sad, Sad, SAD!


    Ron wrote on July 12, 2008 08:57 PM: If the rule of thumb states 100 acres per cow, Mr. Gibbons only needs less than half od one to be considered a rancher. It seems more likely that private development prompted the acquisition. Lamoile sits at the base of the Ruby Mountains with a population of 545, yet it is a world destination for skiing. See http://www.nevadaweb.com/cnt/cc/lamoille/main.html. I think Mr. Gibbons has more ambitious goals for those 40 acres -- maybe landscaping counts as agriculture in his scheme of personal enrichment. Too bad the writer of the article didn't share more than an impression of sage brush and scrub. Per the above website, "Ruby Mountain is one of only two heli-ski operations in the west, and with 500 square miles of ski terrain in the Rubies alone (and two other mountain ranges available), it is by far the largest in the U.S. It attracts skiers from all over the world." No, I dont think the governor is too interested in farming or ranching. The tax exemption granted him is ludicrous.


    Nothing new here wrote on July 12, 2008 08:54 PM: Republicans are not against taxes, they are just against paying taxes themselves.

    Nothing new here. Don't tax me tax the other guy!


    Brian wrote on July 12, 2008 07:06 PM: YYYYAAAAAAAAWWWWWWWNNNNNNNNNNNNNNNNNNNNNNNNN!!!!!!!!!!!!!!!!!!!!


    Definition of bigot wrote on July 12, 2008 06:43 PM: Bigot-- a person who is utterly intolerant of any differing creed, belief, or opinion.

    That's you, joe.


    joe's wrong wrote on July 12, 2008 06:33 PM: joe,

    Romney won the Massachusetts Republican Primary in February (not the spring, as you stated). So, contrary to your assertion, you are not basing your comments on fact. But, your prejudice probably didn't allow you to accept that.


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