Senate tax chairman says plan will fund budget
Senate Taxation Chairman Mike McGinness, R-Fallon, said Saturday the tax package approved Friday in committee should generate at least $27 million more than needed to fund the state budget for the next two years.
The committee amended its tax plan late Friday to increase total revenues from $558 million to the $860 million the money committees say is necessary to fund the state budget.
“The big dog is the payroll tax,” McGinness said.
He said a payroll tax on all Nevada businesses for every worker of 0.7 percent up to $21,500 in annual wages and 1.15 percent for wages over the cap would generate $129.9 million in the last half of fiscal 2004 and more than $300 million a year later.
The other new tax approved Friday is a room tax of 1 percent generating $66.8 million over two years, an across the board quarter-percent increase in the gross gaming tax to bring in $21.3 million.
But it wasn’t at all clear whether those two tax proposals would survive. They are strongly opposed by the gaming industry, which would be hard hit by both.
Gaming industry lobbyist Harvey Whittemore said he believes the final tax package will be significantly different than the current proposal.
Senate Republicans were in caucus Saturday afternoon trying to reach some consensus on which taxes to support. Democrats were also holding private meetings on the subject.
McGinness said after Friday’s vote on the plan it was the best collection of proposals he could muster votes to pass out of the committee — which includes two members who have said they oppose almost all tax increases and one — Joe Neal, D-North Las Vegas — who won’t support any plan unless it hits gaming harder.
The committee also increased cigarette and gaming taxes, raised the proposed entertainment tax from 8 to 10 percent and cut back wholesale and retail tax collection allowances for a total increase of $134.4 million over the biennium.
To offset part of those increases, they eliminated the real property transfer tax and services tax — a total reduction of $185.6 million over the biennium — and voted to scale back the existing Business License Tax as new revenues from the payroll tax replace them.
When all that is added up, McGinness said it raises the total revenue raised by the committee plan from $559.9 million to $886.3 million.
That, he said, is $27.2 million more than the budget calls for — giving the state a small pad in case one of the taxes doesn’t come in.