Lawmakers lay out tax need

Legislative leaders put at least some of their cards on the table Wednesday morning, laying out what they see as the state's revenue needs for a group of two dozen business leaders.

According to several participants, there was general yet grudging agreement from the group the state must raise more revenue.

"I think there's agreement on that," said John Maddox, regional vice president for government relations for Harrah's.

Ray Bacon, representing the Nevada Manufacturers Association, said, "grudging acceptance" would be a fair way to put it.

Senate Minority Leader Bill Raggio, R-Reno, like nearly everyone else contacted, refused to give many specifics from the 10:30 a.m. closed meeting except to say everyone in the room recognizes that more money is needed. He said there is no final plan for fixing the revenue shortfall yet.

Assembly Speaker Barbara Buckley, D-Las Vegas, was more forthcoming, saying the business leaders were told it will take at least $500 million more just to fund Gov. Jim Gibbons' proposed budget, "which all of us agree is unacceptable."

She said several businessmen commented there is no way the state's current budget can be cut 37 percent and that the proposed cuts to the university system would devastate higher education in Nevada.

Senate Majority Leader Steven Horsford, D-Las Vegas, told the group they are looking at raising revenues in the range of $750 million to $850 million. That, he said, is before the May 1 Economic Forum.

Predictions at this point are that the forum will reduce projected state revenues by $450 million or more below the $5.7 billion it set in December.

That brought a quip from Sen. Randolph Townsend, R-Reno, that he can't support anything higher than $836 million " the amount lawmakers boosted taxes in the contentious 2003 session.

Lawmakers presented a list of what they have agreed to cut from the budget as well as the projected revenue numbers. Even members of the construction industry, which has been hit harder than any other sector, were quoted as agreeing the state has no choice but to raise more revenue to maintain services.

But the business leaders also made it clear they want certain things if they're going to accept higher taxes.

Steve Hill of the Las Vegas Chamber of Commerce told lawmakers that business won't be hurt as much by the tax increases as by proposed changes to Nevada's malpractice and workmen's compensation laws.

Nevada's trial lawyer groups have been pushing to remove the $350,000 cap on pain and suffering damages in medical malpractice cases, a bill that has already passed the Assembly. Medical providers say that will drive doctors out of state, prevent new physicians from moving here and drive up the cost of malpractice insurance " the very problems that cap was created to fix seven years ago.

They are also among those behind the push to do away with "exclusive remedy" in worker compensation cases. Exclusive remedy means that, once the workmen's comp payment is accepted, the case is over and there is no opportunity to go to court with a tort claim. Business leaders say eliminating that would open the door to major lawsuits, driving worker comp premiums up as much as 40 percent.

One key part of the puzzle still being worked out is how to not just fix this budget shortfall but fix Nevada's revenue system for the long term. Taxation Department officials say it would take a year or more to implement new tax devices such as a tax on services, which does no good for the instant problem.

To raise more money immediately, lawmakers are pretty much stuck with increasing existing tax and fee levies, at least for now. But simply raising existing taxes does nothing to improve the stability of Nevada's tax and revenue system when the economy falters.

Any long-term plan would have to account for both needs.

- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.

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