Nevada lawmakers review new tax sources

As Nevada lawmakers wrapped up initial hearings on Gov. Kenny Guinn's $1 billion tax hike plan, a key legislator said Thursday it's apparent many people haven't reviewed an exhaustive report that led to the plan.

"There are a lot of people who are not fully informed, who are just flat saying 'no taxes' without waiting to see the information," said Assembly Taxation Chairman David Parks, D-Las Vegas.

Parks commented as his panel and the Senate Taxation Committee concluded the second of two hearings in the opening week of the 2003 session on the Republican governor's proposal.

During the hearings, Guy Hobbs, who headed the Governor's Task Force on Tax Policy, provided detail after detail on the state's expected $700 million-plus revenue shortfall in the coming two fiscal years, and the panel's suggestions for new or increased taxes to cover that shortfall.

Parks said Hobbs was "able to convey a real sense of the need and the urgency." But he said some members of the two tax panels have a better understanding of the crisis than others, adding, "We're just getting started."

The centerpiece of Guinn's tax package is a gross receipts tax on businesses. But Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said during Thursday's hearing that the levy could have "a very negative impact on our economic development."

Sen. Joe Neal, D-North Las Vegas, asked why the tax study panel didn't include a recommendation on cutting out some of the many tax exemptions that exist in state law. Neal also is pressing for more taxes targeting Nevada's casino industry.

Assemblyman Bernie Anderson, D-Sparks, said Nevada's population continues to grow while the revenue from existing tax sources can't keep up -- and Hobbs said that's exactly what he has tried to explain to the lawmakers.

The tax study showed that the state depends on revenues that aren't always dependable. Three-quarters of the state's revenues come from casino-related and sales taxes, which can fluctuate widely during economic downturns that slow tourism in Nevada.

Sen. Bob Coffin, D-Las Vegas, joked that an alternative to higher or increased taxes might be "to put up a fence at the border" and keep people from moving to Nevada. He added that Guinn's proposal would let existing government programs adjust for population growth and allow for some new initiatives.

Guinn's tax hike plan would balance a proposed $4.81 billion budget for the coming two years.

The governor wants to widen Nevada's tax base by increasing property taxes, establishing the 0.25 percent gross receipts tax, imposing an amusement tax and increasing cigarette and liquor taxes.

The gross receipts tax has run into major opposition from business groups -- that in turn have been criticized by casino industry leaders who don't want to be singled out for the new revenue the state needs.


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