Closed-door XGR talks follow court ruling against tax plan

BRENDAN RILEY

Monday, March 5, 2001 | 3:53 a.m.

CARSON CITY - Legislative Democrats plan a closed-door meeting Tuesday with gambling, mining and other businesses to revive debate on Nevada's revenue needs - debate silenced by a court ruling against a tax sought by teachers.

Senate Minority Leader Dina Titus, D-Las Vegas, Assembly Speaker Richard Perkins, D-Henderson, and Assembly Majority Floor Leader Barbara Buckley, D-Las Vegas, all sought to avoid the words "higher taxes" in discussing the meeting.

But Perkins said the decision to hold the session and later meetings on revenue needs stemmed directly from the state Supreme Court's recent ruling to block a 4 percent business profits tax sought by the Nevada State Education Association. The plan would have generated about $270 million a year in new revenues for education.

While the teachers' case was pending before the high court, the tax plan and variations proposing lesser percentages or alternative revenue sources were being discussed by lawmakers, business representatives and others. But the court's Feb. 27 decision all but ended any progress in those discussions.

The legislative Democrats don't plan to include Republican lawmakers in the initial meeting Tuesday, although Perkins said a representative of GOP Gov. Kenny Guinn might be invited.

While Guinn has said the state's long-range revenue projections show a huge shortage within eight years unless Nevada's revenue structure is changed, he said in his state-of-the-state speech that "now is not the time for new taxes."

And Senate Majority Leader Bill Raggio, R-Reno, has said a reallocation of taxes, rather than tax increases, should be considered - but not until the 2003 legislative session.

Perkins insisted the legislative Democrats aren't going to propose any new taxes now. But he said there are "some holes in our budget," and he'd like to hear industry views on the state's needs.

With only three months left in the four-month-long 2001 session, Perkins added, "We want to make sure they don't fold their tents (on revenue issues) and go home."

In its ruling, the state Supreme Court agreed with opponents of the tax plan who said the Nevada Constitution prohibits an initiative that would appropriate funds but not provide an adequate tax source.

While the proposed tax would raise new revenue, the initiative also said half of the state's total revenues should be earmarked for education. Justices said the new tax wouldn't be enough to meet the 50 percent requirement.

Teachers circulated petitions last year to force the tax issue. Despite the adverse court ruling, education association president Elaine Lancaster said last week that the organization still wants the Legislature and Guinn "to do what's right for the school children of Nevada."

"There will be no safe haven for those who fail to take positive action in this session," Lancaster warned at a news conference.