Defrauded by the state?

When does a prolonged, demonstrated indifference to state law and the state constitution among elected politicians and appointed bureaucrats become a malevolent conspiracy against the public?

That question has to be on the minds of many Nevada government officials today, now that word is out that for the past quarter century they have operated -- and currently still are operating -- the state's property-tax system significantly outside the law.

Under that regime, virtually every Nevada home or property owner has arguably been defrauded by the state.

While the Nevada Constitution requires "a uniform and equal rate of assessment and taxation," state and local tax officials for decades have successfully blocked both the creation and the application of uniform assessment standards that would implement the constitutional guarantee.

The absence of those standards -- required additionally by state statutes but never produced by the interminably foot-dragging Nevada Tax Commission -- has never been publicized by either the state of Nevada nor county assessors, although there is a clear fiduciary obligation to do so.

Close observers of Nevada government corruption may find the lack of public candor unsurprising: The absence of standards means the valuation notices issued by county assessors and the tax bills issued by county treasurers are based on illegal assessments, which -- if that fact were known -- could easily be challenged in court. Not letting taxpayers know about the situation prevented such challenges.

State and county secrecy about the lack of standards has also meant unconstitutional power for every county assessor. With a big wink and nod from the state, they have been able to use, in any given year, just about any arbitrary methodology they may choose -- and to thus produce whatever level of tax revenue an assessor, or his political sponsors, may desire.

Such complete discretion is a direct violation of not only state law but also the Nevada Constitution.

Nevada's covertly arbitrary and shifting standards have also had another consequence: They have ensured that most taxpayers would have little chance when appealing their assessments. Even at the state level, Nevada tax rules are a bottomless Sargasso Sea of confusion and incoherence that even state bureaucrats admit they cannot fathom. Thus, appeal-minded taxpayers have soon learned that contesting their assessments would mean huge expenditures and years in the courts, going up against the unlimited legal budgets of the state of Nevada -- which regularly sides in court with the assessors.

Not surprisingly, therefore, property owners of modest wealth -- lacking resources to fight what increasingly appears to be systemic governmental corruption -- almost always have backed away, swallowed their anger and just paid up.

There has been an important exception to that rule, however. Homeowners on the north shore of Lake Tahoe, surprised by huge increases in their tax bills in late 2002, sought expert advice. They learned that the Washoe County assessor had simply changed his appraisal rules so that valuations for the 2003-04 year would be as much as 100 percent higher.

This was the wrong group to mess with. It had resources.

Organizing itself as the Village League to Save Incline Village Assets, the community went to court. Since then it has won multiple legal victories of watershed importance at both district and Supreme Court levels. And this was in the teeth of the combined forces of the state Tax Commission, Tax Department, state Board of Equalization, the Nevada attorney general, the Washoe County assessor, the Washoe County district attorney and the Washoe County Commission.

Today, back-channel reports out of the offices of state and county tax-assessment apparatchiks suggest increasing chaos, as attempts by government attorneys to defend a clearly unconstitutional system repeatedly fail and public understanding of the scandal continues to grow.

Such increased public understanding, for a large clique of government officials, is quite a serious matter. Under the federal civil rights statutes, state and county officials can be sued as individuals. And the kind of prolonged and apparently entirely intentional negligence to public duties that appears to have characterized many actors in this melodrama is very much what that law -- which goes back to the Civil War -- is about.

Already four members of the state Board of Equalization have been sued in their individual capacities -- as the law requires -- for failing to perform their duty under the law of equalizing assessment practices statewide.

That case is scheduled to be heard by the Nevada Supreme Court in early January.

Steven Miller is vice president for policy at the Nevada Policy Research Institute.

Trending topics:

• Steven Miller
• Nevada Policy Research Institut
• property taxes
• assessors

Comments

Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background.

1. HomeBoy Dec. 1, 2009 | 5:31 p.m. Report Abuse

   HOA watcher asked;
   
   “Grateful Victim, can you shed any more light on your Ombudsman claim?”
   
   The answer is “Yes I can”. You can also learn more at the following link;
   
   www.anthemvoice.org
   ------------
   
   I make the following comment to Ms Nancy Savage (The State of Nevada Deputy Attorney General).
   
   You said; "Generally, (board members) act in good faith,"
   Obviously (and undeniably), then it follows that; "Some times, (board members) DO NOT act in good faith.
   
   This is what troubles me Ms Savage. "Some times" complaints are lodged against a homeowner association that is a client of Commissioner Gary Lien who handles the associations financial audits and advises them on tax matters etc, yet he sits in judgement on their behavior.
   
   It is also troubling that Commissioner Favil West (before becoming a "representative" for all homeowner associations), neglected to protect the members of his own association when he was President of the Board of Directors. Favil West was president at the time of transition from developer control to resident control, and as you know the State of Nevada imposes a lot of demands on the developer. "Some how" the developer was relieved from those burdensome demands, and even today the Commissioners turn their collective backs on the complaints that were lodged by residents.
   
   In plain English Ms Savage, the commission is not very "compassionate" when problems arise in the very homeowner associations they live in.
   
   If you would like a full and complete report on how the developer managed to escape from the requirements imposed by the State of Nevada, you have only to contact Mr. Steve Miller (the reporter of this article), and I’m sure he would be glad to arrange an interview.

2. Jon.Friedrich Dec. 1, 2009 | 3:30 p.m. Report Abuse

   Corruption in Nevada? Can it be possible?
   I have been a victim of corruption in the Nevada Real Estate Division. Total indifference to State law is the norm.
   Earlier this year I brought an action against my Board at Rancho Bel Air for a violation of NRS 116. The Management Company and the Board failed to hold a Budget Ratification meeting as required by law. I filed for arbitration.
   The Arbitrator assigned to the case by the Real Estate Diviion had a Conflict of Interest with my attorney and has a known bias against homeowners in favor of Boards.
   When I asked the Real Estate Division Administrator to remove the Arbitrator I was told they had no authority to do so. I was told the Division only
   "facilitates" the process. In reality the State law governing arbitrations requires the Division to "Administer" the program.
   There is a big difference between these two words. The Division violated the law.
   It came as no surprise that the arbitrator ruled in favor of the Board and stated I was responsible to pay Rancho Bel Air legal fees & arbitrators fees in the sum of $ 22,109.00.
   Needless to say I have taken Court action against the State in filing a Writ of Mandamus against the State Real Estate Division for violating the Statutes, the Arbitrator for exceeding his authority and Rancho Bel Air for violating both the CC&Rs and State law. That was filed back on July 31, 2009. Nothing has been heard from the Court as of this date.
   I guess the only way to try to get justice in Nevada is through the Courts.
   Looks like State agencies do as they please without concern for the citizens of Nevada.
   If you have had problems with the Real Estate Division with respect to Homeowner Associations call me 822 4555

3. little red Dec. 1, 2009 | 1:31 p.m. Report Abuse

   Having taken the time to sit in as an observer at several Real Estate Division (CIC) hearings Steve, the corruption or whatever it is, goes so deep in HOAs too. It is pathetic! 99% of the homeowners going for their ‘last resort’ at fair-play don’t stand a chance and I wonder if the ‘big boys’ in Carson City have a clue taking into consideration the strength of the CAI & the Real Estate Division lobby and their lawyers.
   Binding arbitration is so slanted on the side of boards and HOA lawyers who, although their fees are paid from the dues of the homeowners, ONLY represent the board. The losing party pays the arbitration fee, normally into the THOUSANDS of dollars. Need I tell you, I sat and scanned the sheet of hearings with my mouth gaping open? Observers can read the reasons the hearing was called and so many that lose seem so justified, so one cannot fathom how a non-biased arbitrator could have judged against them, but the word, ‘un-biased’ is the key here isn’t it?

4. Concerned Homeowner Nov. 30, 2009 | 9:04 a.m. Report Abuse

   Thank you Steve Miller for disclosing that NV civil servants are capable of abusing power when allowed to hide behind closed doors.
   
   The lack of full sunshine laws and insufficient disciplinary procedures against government worker corruption motivates risk-takers to abuse our citizens without fear of being punished.
   
   As HOA watcher and grateful victim have already suggested, the Real Estate Division is also ripe for a thorough investigation and clean up.
   
   I just searched and found a new report about Deputy Attorney General Nancy Savage, the Commission on Common Interest Communities, and the Real Estate Division requiring the Anthem Coventry HOA to pay the fines for 3 board members who had admitted to fraudulent self-dealing on a landscaping contract. Imagine unit owners paying for crimes by board members! Now that is a sure sign of corruption in NV government.
   
   See this link for details: www.anthemvoice.org

5. HELEN WEILS Nov. 29, 2009 | 4:24 p.m. Report Abuse

   WHAT ABOUT A CLASS ACTION LAWSUIT AGAINST THE GOVERNMENT EMPLOYEES WHO ARE IN THE LEGISLATURE IN VIOLATION OF THE CONSTITUTION?
   
   WHAT ABOUT A CLASS ACTION LAWSUIT AGAINST THE ASCESSOR'S ON BEHALF OF ALL OF US WHO HAVE BEEN RIPPED OFF?
   
   WHAT ABOUT A CLASS ACTION LAWSUIT AGAINST THE GOVERNMENT UNION EMPLOYEES?
   
   COULD A FEW CLASS ACTION LAWSUITS DO
   WHAT BALLOT INITIATIVES HAVE NOT BEEN ABLE TO DO?