Editorial: Estate tax provisions to hit state

Wednesday, June 13, 2001 | 9:26 a.m.

Plenty has been written about the inequities of President Bush's tax cut package, including the gradual rollback of the estate tax. There is one component of the federal tax cut -- while unheralded -- that will unfairly pinch the coffers of Nevada state government: this state and others no longer will get a share of the estate taxes collected by the federal government.

While the estate tax's elimination will be phased in gradually until 2011, state governments will see their share of the proceeds taken away much more quickly. Beginning in 2002, states will lose 25 percent of these revenues every year. By 2005 states won't be getting any money from this tax. This will be a sizable hit for Nevada. State budget director Perry Comeaux estimates the state will have to find $53 million in the next two-year budget cycle to replace this loss, which currently goes to the universities and is also used to partially pay for class-size reduction in elementary schools.

There has been talk, especially now that the U.S. Senate is in the control of Democrats, that either this year or possibly next there will be some fine-tuning to the tax cut legislation. But don't count on it. Once a tax cut is in place, members of Congress believe it is politically perilous for them to reimpose a tax. That means Nevada's governor and state legislators will have to add the loss of revenues from the estate tax to the growing list of issues that must be addressed to fix our wobbly tax structure. They dodged their responsibility to repair our tax system during the regular legislative session -- residents of this state can't afford them to do so again when the Legislature meets again in two years for its next regular meeting.