Controversy arises over bill on employing poor people

Scott Reeder

Friday, March 26, 1999 | 10:44 a.m.

CARSON CITY -- Nevada legislators are considering whether to give a special tax break to employers who hire poor people.

Sen. Maurice Washington, R-Sparks, is proposing that businesses that hire people with incomes at 150 percent of the federal poverty level or lower should not have to pay the state business tax for that person. Currently, Nevada employers must pay $100 per year for each full-time person they employ.

"What we want to do is create incentives for employers to go out and train and hire these people," he said. "The whole idea behind this is to lift people out of poverty."

A single person with an income of $18,000 or less would qualify as a potential employee in this program, Washington said.

But critics say the bill fosters an incentive for employers to not pay their employees well.

"This is corporate welfare at its very worst," said Lisa Guzman, a lobbyist for the Nevada Empowered Women's Project. "The bill not only would give a tax break to employers who hire people earning less than 150 percent of the poverty level. It also keeps giving them the tax break as long as they keep earning less than that amount. So there is a real incentive to not give employees raises."

Washington said this certainly isn't the intent behind the legislation.

"No one, who isn't making much money, is going to stick with a job if they don't get a raise," he said. "The whole intent is to find work for these people."

Washington said he would be willing to amend his bill so that the incentive ends a year to 18 months after a person is hired. By doing this, he said there is no disincentive to giving pay raises.

Current law gives this tax break to employers who provide free child-care benefits to low-income employees. Washington said some small employers cannot afford to offer child-care benefits, but still should be encouraged in some way to hire low-income people.