Taxes — a word that can strike fear in even the most liberal elected official. Most politicians would rather sit in a room full of angry homeowners than even discuss the topic of raising taxes.
But alas, as the 2001 Legislature gets closer, the topic of taxes will be on everyone’s mind. Before he left his position as chief of staff for Governor Kenny Guinn, Pete Ernaut sounded a rather dour picture of the state’s economic future. Without some kind of increased revenue stream, cuts will have to be made.
Nevada has enjoyed a long stretch of prosperity. By and large, the tax burden our residents face is rather low. Legislative session after legislative session, Republicans and Democrats have prided themselves on not raising taxes in any form. In 1999, Guinn even threatened, and then carried through on his promise not to approve any fee increases.
The message of no new taxes has been great campaign fodder. Many incumbents have returned to office by touting their anti-tax stance and re-committing to keeping taxes low or non-existent. That may not be possible in the future, however. At least two groups are planning petition drives to qualify initiatives for the 2000 ballot dealing directly with raising taxes.
The Nevada State Education Association, which in 1992 was dissuaded from going ahead with its plan to pass a corporate tax initiative, is back. The group is working on the specifics of an initiative to place a 5 percent tax on all non-gaming business profits. The idea is to raise $250 million for education.
State Senator Joe Neal plans to put the burden of raising new revenues solely on the gaming industry. His plan, which was defeated soundly during the 1999 legislative session, would be to bump the gaming tax from 6.25 percent to 11.25 percent on casinos that make more than $1 million a month in gross revenues.
The bulk of this additional money would go toward education, with the remainder split between reducing motor vehicle taxes, raising pay for Nevada Highway Patrolmen, and supplementing gambling addiction programs.
You won’t find many supporters for this plan among elected officials, who count on gaming for a large share of their campaign contributions In addition, there is concern about overburdening the industry that already funds over half the state budget.
“People don’t always realize it, but gaming is a fragile industry,” one gaming insider said. “Counting on gaming revenues to fund the state is just not smart fiscally. What happens when those revenues are down? Are we going to close schools?”
The business income tax initiative isn’t going to find much more support. Businesses are already lining up in opposition, claiming that any tax on businesses will just be passed on to the general public in the form of raised prices and fees.
In addition, the initiative might put Democrats in a tough spot. Education has been one of their cornerstone issues over the years, and the State Education Association has been a strong supporter of Democratic candidates. In order to be successful and keep control of the Assembly, however, Democrats will need fund-raising help from the business community.
Both parties are trying to work out a compromise that will satisfy the teachers’ union and business leaders, thereby avoiding the need for an initiative. That would circumvent what could be a very nasty campaign for everyone involved.
Most observers agree it’s likely taxes won’t be raised unless both parties work together. Neither side wants to get caught on the wrong side of this potentially disastrous issue.
What is going to be interesting to watch is how this year’s candidates answer the tax question. With two initiatives on the ballot, the issue will definitely arise in debates and public functions. How each side answers this tricky subject might just determine how successful they will be in the first election of the new millennium.
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As this column is being written, the races for Clark County Commission seats are looking like non-events. Two incumbents — Bruce Woodbury and Mary Kincaid — have no tough opponents emerging, and probably won’t draw any high-caliber competition.
Commissioner Lance Malone’s only opponent, former FBI super-agent George Tagliotti, is ready to drop his campaign in the wake of being out-raised by the incumbent by a couple hundred thousand dollars.
The only seat where a race is likely is in Yvonne Atkinson-Gates’ district. North Las Vegas councilman John Rhodes is contemplating a primary challenge and is trying to raise the necessary cash. The commission district is smaller than most, so Rhodes doesn’t have to raise as much money to be competitive.
Still, Gates has a good record and has chalked up many accomplishments for her constituents. She’s beaten back several recall attempts, and polls show people aren’t really swayed by the problems she’s had with the Nevada Ethics Commission.