By Jennifer Oldham

Even as Nevada's real estate values climb back from their record plunge during the recession, a decade-old property tax cap that let casinos save billions of dollars has strained municipal budgets to the point where petty thieves are being released from jail early.

In Clark County, home to Las Vegas and 72 percent of the state's residents, the tax limitation cost it $119 million in lost revenue since 2009. That, combined with the recession meant it had to fire 1,500 municipal workers. It still can't afford to cover the daily cost of each inmate held in county jail.

"At a cost of something like $120 a day _ it was just killing us," county spokesman Erik Pappa said. "Through discussions with the local courts and others, we've worked out a system to get those numbers down and the result is we're now having to release more nonviolent, misdemeanor offenders earlier."

Five years after the end of the Great Recession, real estate values nationwide are rising with home sales on pace for their best year since 2007. Yet cities, counties and school districts aren't reaping a commensurate amount in property tax revenue because of a lag in reassessments and limits on real estate taxes in 41 states.

In Nevada, a 2005 law allows commercial and residential property tax bills to increase no more than 8 percent and 3 percent, respectively. Companies like Wynn Resorts Ltd., Aria Resort & Casino and MGM Resorts International paid $2.5 billion less in taxes in the last decade then they would have without the cap, according to county documents. Under the system, corporations received 66 percent of the abatements in fiscal 2015, while residents were given 34 percent, county data show.

Municipalities rely on property taxes for as much as a quarter of their budgets and to finance the salaries of teachers, police officers and firefighters. Across the U.S. local governments employed 490,000 fewer people in May compared with peak levels in 2008, said Lucy Dadayan, a senior policy analyst at the Nelson A. Rockefeller Institute of Government.

"In California, Massachusetts, New Jersey, Illinois, Colorado and Oregon it's meant the provision of less quality services, particularly in the area of education," Dadayan said, "And it translates into a less qualified workforce and hence puts the nation's global economic competitiveness in jeopardy."

Nevada was the country's fastest-growing state in the past quarter-century, with more than 6,000 people a month moving in during the 2000s. That fueled a housing boom that caused prices to escalate, prompting the Legislature to enact the cap.

The property tax law didn't anticipate the devastating effects of the recession, in which Nevada became the only state where the total value of single-family homes fell below the amount owed on them. Today, the assessed valuation of Clark County real estate is $63 billion, about half what it was in fiscal 2009.

Corporations also suffered during the recession, with gambling revenue dropping by almost 20 percent in the late 2000s. The 2005 law allows companies to appeal their tax rates to the County Board of Equalization based on declines in property values or income losses, said Yolanda King, the county's chief financial officer.

Companies can pay the revised rates in perpetuity because there isn't a provision requiring them to return to the board once their economic situation improves, King said.

Las Vegas' property tax revenue also fell, coming in at $97.5 million this year, about 30 percent less than 2009, said spokesman Jace Radke. The city is slowly restoring services lost during the recession, he said, adding 60 positions this year.

To stem the losses, Nevada Minority Floor Leader Marilyn Kirkpatrick, a Democrat from North Las Vegas, introduced legislation in February that would have required businesses to make their case for lower values to the board each year.

"In some instances, local residents are paying more property tax percentage wise than some of the commercial folks across the state," she said. "There needs to be some parity."

The bill died after companies said the revisions would harm them, Kirkpatrick said. The Las Vegas' Metro Chamber of Commerce's 4,000 members support a more thorough review of the property tax law in the upcoming 2017 legislative session, said Paul Moradkhan, vice president of government affairs.

"Nevada's property tax system is extremely complex _ there's no other like it in the country," he said. "One way or another someone is going to pay and you want to make sure it's broad and fair and stable."

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