Guinn says no question state needs more revenue

But the governor, who faces hard choices next week to cut another 3 percent out of this year's agency budgets, refused to lay out exactly what he will support.

His list will likely include a business tax as well as hefty increases in cigarette and liquor taxes.

"Somehow or another, we are going to raise new revenue," he said. "The state has no choice."

"We're now coming down to what is the best way for these people to recommend," he said, referring to the Governor's Task Force on Tax Policy.

Guinn pointed out that the gaming industry has agreed to support a quarter-percent gross business revenue tax -- including their gaming and non-gaming activities. Applied to all businesses over a certain size in the state, that tax could generate up to $300 million a year. The largest resorts already pay 6.25 percent taxes on their gross gaming revenues.

In addition, Guinn said doubling the cigarette tax from 35 cents a pack to 70 cents should raise another $65 million a year.

And he said liquor taxes in Nevada haven't been increased for nearly 20 years.

He said over the past four years, his administration has cut millions out of state government by tightening operations.

"There's no fat. We are working with less people than we were three years ago," he said, pointing out that the state's population and demands for governmental services have grown dramatically during that same period. "But we are not even reaching what we reached (in revenue) a year ago."

Director of Administration Perry Comeaux is receiving agency plans for cutting the extra 3 percent this week. Guinn will meet with Comeaux and his cabinet next Tuesday to complete the cuts.

But even so, Guinn said he expects to ask the 2003 Legislature to take $100 million out of the Rainy Day Fund to make the budget balance. That fund contains more than $130 million.

After that, he said, the state will still need to raise more revenue to provide necessary services to the public. He said if no new revenues are sought, he would have to build "a budget that's not acceptable."

He formed the Task Force on Tax Policy to help work out the best way to raise the money but said he has no illusions that all parties in the state will agree to the final plan.

He said when that point is reached, he will have to make the final decisions.

He made it clear the final plan will involve a combination of different sources.