Teachers to unveil tax plan

Monday, March 6, 2000 | 11:58 a.m.

CARSON CITY -- A teachers union proposing a business tax in Nevada says the package won't drive industry from Nevada or hurt small companies.

The Nevada State Education Association will unveil its petition for a 3 percent to 5 percent net profits tax on March 21.

Businesses whose profits are less than $30,000 will be exempt, said Debbie Cahill, a lobbyist for the union who previewed the package Friday.

"If a business is struggling, it will not pay the tax," she said. "It will have a minimal impact on business."

Businesses could pass the tax to consumers, she said. That might cost a family $7 more a year in taxes -- or less than the cost of two video rentals.

The union must get 44,009 voter signatures by November to bring the issue before the 2001 Legislature. If the Legislature doesn't act it goes on the 2002 ballot so voters can decide.

Business groups are ready to fight the proposal, which they haven't seen yet.

"Until the teachers put it in writing, we don't know what we're against," David Howard, a representative of the Greater Reno-Sparks Chamber of Commerce, said. But he noted a coalition has been formed by the state Chamber of Commerce, Las Vegas Chamber of Commerce and his group to fight the plan.

Cahill said a 3 percent tax on profits would raise about $200 million a year. The union wants part of that for teacher pay increases. It takes about $18 million a year to boost the teachers' salary statewide by 1 percent.

Other school programs such as teacher training will also be funded, she said.

The petition would require that the money go to education, and it would not allow the Legislature to reduce its appropriation to public schools. A 2 percent spending limit to administer the fund would be mandated.

The proposed tax will not be assessed on casino winnings, but resorts would pay the levy on such things as room revenue and restaurant and bar business. About one-quarter of the collect money would come from the gaming industry.

"We're not letting gaming off the hook," she said. "We're not in bed with gaming as Joe Neal suggests."

Neal, a Democratic senator from North Las Vegas, has launched a separate initiative to raise the gaming tax from 6.25 percent to 11.25 percent for the largest resorts. Neal filed his petition and is collecting signatures.

The teachers' plan, Cahill said, broadens Nevada's tax base rather than zeroing in on one industry.

The Reno-Sparks chamber's public policy committee is opposing Neal's petition as well, Howard said. Its recommendation will be sent to chamber's board March 21.

Howard said Gov. Kenny Guinn should be allowed to complete his review of state government to determine if more revenue is needed before such initiatives are put into effect.

Guinn told state lawmakers Friday that tax revenues are not increasing as fast as the state needs. The state, he said, must either change the tax system or change how it budgets services for Nevadans. The governor did not have any suggestions at the meeting.

Guinn also opposes taxation by initiative petition.

Cy Ryan covers state government for the Sun. He can be reached at (775) 687-5032.