Lawmaker defends tax credit for companies with low-salaried workers

Brendan Riley

Thursday, March 25, 1999 | 5:11 a.m.

CARSON CITY -- A senator's effort to expand tax breaks for employers who hire low-income Nevadans was criticized Thursday as a move that could encourage sweatshops.

Sen. Maurice Washington, R-Sparks, told the Senate Taxation Committee his SB403 is intended to give a business tax cut to firms that hire people whose income doesn't exceed 150 percent of the federal poverty standard.

That's just over $12,000 a year for a single person, just over $20,000 for a family of three, and nearly $25,000 for a family of four.

But the bill achieves its goal by deleting from an existing law a requirement that the tax breaks go only to businesses that hire such people and also provide on-site child care or vouchers to defray child care costs.

That angered activists for welfare mothers and other low-income individuals who said companies could get and keep their tax cuts simply by holding down salaries - and never offering help with child care.

"Frankly, I cannot believe that we would offer incentives to businesses to hire workers at low wages," said Lisa Appelrouth Guzman of the Nevada Empowered Women's Project.

"Nevada is already rampant with low-paying jobs that make it difficult for families to make ends meet," Guzman said, adding that lawmakers should be encouraging businesses to pay adequate wages.

"This is business welfare," said Jan Gilbert of the Progressive Leadership Alliance of Nevada, adding that child care costs for a working single mother earning $20,000 a year could take a third of her income.

Bobbie Gang of the Nevada Women's Lobby also opposed the bill. She submitted a statement saying low-income families need help staying off welfare, and the business community should participate in that effort.

John Sasser of Washoe Legal Services said he could support the bill if its intent is to help businesses trying to put workers on a career path to higher-paying jobs.

"But I assume it's to reward people for paying low wages," he told the Taxation Committee.

Washington said after the hearing that he was surprised by the opposition, adding, "Nobody's saying you shouldn't have access to child care."

He also said he's willing to meet with the critics and see whether amendments could be worked out to meet their concerns.

Washington introduced the bill at the request of businesses in his district. He didn't identify them.