Guinn weighs new tax plan

Wednesday, May 10, 2000 | 3:37 a.m.

The administration has been looking at whether some of the social or other programs financed by the state would be better off with the counties.

"Whose responsibility is it?" Guinn said. "It's a policy decision we're talking about."

The governor, talking Tuesday with reporters about the state budget and finances, said his administration isn't looking at raising existing taxes. But he didn't rule out adding some.

One possibility would be to expand the sales tax on charges for services provided by dry cleaners, attorneys, barbers, hairdressers and others. Coupled with that would be a decrease in the rate.

"It makes sense to look at this," state Budget Director Perry Comeaux said, referring to service taxes. "The service sector is growing faster than manufacturers."

If the state continues to get "medium" tax revenues and continues to make "historical expenditures," it will start running in the red by 2003, Comeaux said. There could be a $400 million deficit by 2009, he added.

Increasing state workers' pay is a Guinn priority. He said it won't be the last thing considered in building a budget - as has happened in the past.

"We're going to put salaries in the budget so we don't get behind three, four or five years," Guinn said.

State workers didn't get a pay raise in 1999 but will receive a 2 percent cost-of-living raise in July.

Guinn is getting an early start on building his budget to present to the 2001 Legislature.

"I'm not saying we're in a crisis mode today, but we are already slowing down," he said referring to state sales tax collections.

During the past 10 years the state has averaged an 8.5 percent increase in the "blended" collections from the sales and gambling tax.

Guinn said he'd be happy if that continues, but noted there are no major casino expansions planned for Las Vegas, and Indian gambling in California is expected to hurt downtown Las Vegas, Laughlin and Reno.