Senate passes tax bill
June 27, 2003
The logjam broke in the Nevada Senate Thursday as 15 of 21 members voted to pass a tax plan raising $873.1 million over the coming two-year budget cycle.
That put the ball in the Assembly’s court, where several amendments were made Thursday night, including the addition of a franchise tax — a tiered version of a gross-business tax — in the plan.
The Senate version doesn’t have one because, according to Majority Leader Bill Raggio, R-Reno, staff was uncomfortable they can accurately estimate what such a tax would generate. Assembly members led by Assemblywoman Chris Giunchigliani, D-Las Vegas, said payroll isn’t a good tax because it doesn’t get high-profit companies with small staffs. She said having both payroll and franchise in the bill balanced it better, tapping all businesses more fairly.
The Assembly also eliminated the 1 percent room tax included by the Senate.
The Senate plan is based on a payroll tax tied to the number of employees reported for unemployment insurance purposes and capped at 1 percent of ESD wages. That would come to $215 per worker and generate an estimated $327.6 million over the next two years.
Assembly Democrats also made a number of other changes to the Senate bill, but Majority Leader Barbara Buckley, D-Las Vegas, said most were relatively minor. She said the Assembly bill was designed to incorporate some of the Senate’s demands from last week and, therefore, contains most of the compromise language needed for the two houses to agree.
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“The big issues are the franchise tax and the room tax,” she said.
Speaker Richard Perkins, D-Henderson, said he would push for a vote today to pass the amended tax plan out.
If he can get the necessary 28 votes — a two-thirds majority — it will go to a conference committee to try resolve any differences.
Gov. Kenny Guinn said it was a plan he can basically support, although he thinks a franchise tax on gross receipts would improve it.
Several senators said on the floor they don’t support everything in the plan, but believe passing it will, as Sen. Warren Hardy, R-Las Vegas, said, “get the ball rolling.”
“I do believe it will be changed down the hall and we’ll have another opportunity to vote for an even better bill in the conference committee,” said Minority Leader Dina Titus, D-Las Vegas.
She said she will oppose the final bill if it doesn’t include a franchise tax.
Sen. Joe Neal, D-Las Vegas, told fellow senators that those who flatly oppose any tax increases “become obstructionist.”
“If you believe government can function without any money, you are in the wrong place,” he said.
Raggio joined Neal, pointing out that it’s their responsibility as elected officials to represent the needs of the people.
“Probably the only group in this legislative process that doesn’t have a lobbyist is the people,” he said. “Everyone else has a lobbyist.”
He said Nevada’s tax system has been in trouble for nearly 20 years, but that explosive growth in the south has covered up those flaws until the past couple of years.
“We’ve been able to patch and paste. For 12 years, we have avoided any serious increase, but I think what happened to us is events engulfed us,” he said referring to the economic slump and the effects of Sept. 11, 2001.
The lone opponent to speak on the Senate floor was Sandra Tiffany, R-Henderson, who said this is by far the largest single tax increase in state history. And she said a lot of what has increased is hidden in fees within the budget.
“What we’re going to see is people are going to pay in multiple ways,” she said.
But she also said there were numerous areas of the budget that could have been cut but were actually enhanced.