Guinn’s staff claims petition is no way to raise taxes

Wednesday, Sept. 8, 1999 | 9:44 a.m.

CARSON CITY -- Gov. Kenny Guinn doesn't want to see state taxes levied through a ballot question, even for as good a cause as schools.

So when the teachers union announced plans for an initiative petition next year that would impose a business-profits tax to support education, Guinn, a former school superintendent, withheld his support. Then state Sen. Joe Neal proposed an initiative that would raise casino taxes, a proposal that has failed twice in the Legislature.

Now Guinn's staff is speaking out against taxation by ballot measure.

"Taxation through the initiative process is not a good way to do business," Guinn's chief of staff Pete Ernaut said. "The most prudent way to look at the fiscal condition and needs is in a comprehensive fashion and not in a piecemeal way for special interests."

The issue arose Friday at a meeting of the technical advisory committee to the Legislative Committee to Study Distribution of Taxes Among Local Governments. The advisory committee said it would recommend a study to research the impact on local governments of such ballot initiatives.

But the early opposition won't keep the Nevada State Education Association from its goal, Elaine Lancaster, president of the teachers union, said. The governor's opinion "will not deter us from doing what is right for education."

The teachers association is preparing to launch its petition in January, planning to gather 44,009 signatures to support imposing a 5 percent tax on business profits. The money would be earmarked for public schools.

The current system of funding public education through state revenue, which is highly dependent on sales tax, gaming revenue and other changeable sources, has been criticized as not stable enough.

Sen. Ann O'Connell, R-Las Vegas, who heads the legislative committee, has already voiced opposition to the teachers initiative.

"The governor takes a dim view of taxes by initiative," she told the technical committee. The Guinn administration is starting a study of government spending and tax revenue and should have some recommendations ready in 2001, she said.

Ernaut reinforced O'Connell's point.

"It's important to note there is going to be a fiscal study on spending and efficiency in government and the revenue streams and their stability," he said.

While the governor is not taking specific stands against the initiative, Ernaut said earmarking tax money for a specific purpose can cause problems. "Not only are we discussing taxation, but also money that is going to a specific interest in state government. It helps only one sector of government.

"It's premature to determine the needs until we have a chance to do the entire study," he said.

Lancaster said the governor "is entitled to his opinion" and he is not precluded from "offering his ideas on the dire tax structure" in the state.

Starting in January, Lancaster said, the teachers union will start to gather signatures to meet a November deadline to have the petition presented to the 2001 Legislature. If lawmakers do not either make the measure law or modify it, the initiative will go on the 2002 ballot for the voters to decide.

Lancaster said she was not surprised by O'Connell's opposition, and she noted that the chambers of commerce in Las Vegas and Reno are also against the tax initiative.

"We're going to keep doing what needs to be done. and we will not be deterred," said Lancaster, whose organization represents about 90 percent of the schoolteachers in Nevada.

The technical advisory committee, headed by former Clark County Controller Guy Hobbs, also suggested a number of other areas to be studied during the next 18 months. Its recommendations will be forwarded to the legislative committee, which meets Oct. 6 to decide the subjects to be reviewed.

One area that may be studied is tax exemptions for specific groups or on services.

Carole Vilardo, executive director of the Nevada Taxpayers Association, said there are exemptions on $650 million of taxable items. Some of the exemptions were written into the law in 1955 and 1957 and are not being used.

Exemptions range all the way from those given military veterans and widows on local taxes to the one on the $300 million art exhibit at the Bellagio.

Advisory committee members said there must be a logical and uniform way to process requests for tax exemptions. Efforts to eliminate some of them have triggered heated debate in the Nevada Legislature.

The advisory committee suggested the legislative committee continue its study on distribution of taxes on centrally assessed property and on fuel. And it should look at the issue of depreciation on property, taxing personal property and distribution of the hotel-motel room tax.

Clark County Assessor Mark Schofield told the advisory committee that the association of assessors presented a bill to the 1999 Legislature to exempt the first $100,000 of personal property from taxation. But that plan was eliminated by the Assembly Taxation Committee.

There are inequities across the state, Schofield said in the assessment of personal property owned by business. "It is most unfair and difficult to administer," he said.

Vilardo said personal property assessment is on the "honor system" with the taxpayer reporting it. "We would like to see it eliminated. but that may not be in the cards."