New tax plan emerges: Teachers to benefit in compromise reached today

Cy Ryan and Erin Neff

Thursday, May 24, 2001 | 10:57 a.m.

CARSON CITY -- A new plan emerged today to raise some business fees and shift some tax revenues to give schoolteachers a bonus this year and a pay raise next year.

The proposal has the blessing of Gov. Kenny Guinn, who met behind closed doors with legislators and lobbyists today to work out the details.

Guinn said it would raise $45 million to $50 million a year. It would increase "the cost of doing business" fees for the 170,000 corporations and other entities that file with the secretary of state.

The fee increases would be on such things as mergers, name changes, expedited service and reinstatement of corporations, said a source close to the negotiation. Guinn estimated the fee increases might be $10 to $15, but those details were not made public.

The plan also would switch money collected from the tax on car rentals from the state Department of Motor Vehicles and Public Safety into the state's general fund.

Sen. Mark James, R-Las Vegas, said his bill would be introduced on the Senate floor today. Guinn has signed off on James' bill and will announce it as part of an overall tax plan, probably tomorrow, James said.

"This money will also be a great part of doing the right thing for our hard-working teachers," he said.

But Senate Minority Leader Dina Titus, D-Las Vegas, said she thought Democrats have forced Guinn to take a look at taxes this session. Several weeks ago, she said, Sen. Mike Schneider, D-Las Vegas, introduced a bill to bring Nevada's per-pupil spending to the national level.

That bill did not contain a funding source, but sought ideas on how to raise the money. Titus said Majority Leader Bill Raggio, R-Reno, would not schedule a hearing on the proposal.

"I'm glad to see that we're coming to a solution," Titus said to James. "We're very happy to work with you."

James this morning called the agreement a "happy conclusion." He said the fees from the secretary of state's office will raise $30 million for the biennium. He said this plan would still keep the Nevada economy vibrant.

James said this would be doing the "right thing for our teachers."

This is the third plan to gain additional revenue to give schoolteachers a pay increase.

Guinn set aside $57.5 million in his original budget for a one-time bonus this year for teachers, which would equate to about 4 percent to 5 percent. But there was no money for a raise in the second year.

Under the tentative plan, Guinn said teachers would receive a bonus this year of 2 percent to 3 percent. Then the teachers would receive a 2 percent raise in 2002 based on their present rate of pay, which would not take into account the bonus.

However, going into the 2003 Legislature, Guinn said the state would base its new budget on a salary schedule that the teachers got a 4 percent to 5 percent raise over the biennium. That would mean the state budget would set aside enough money for the higher salary base.

Guinn estimated this move would cost about $60 million additional in 2003 in computing the teachers pay at a 4 percent to 5 percent increase.

With the plan, there would be $2,000 bonuses for new teachers signing up this year for the school districts and $2,500 the following year. Guinn said that plan will cost about $10 million.

The governor also said the plan calls for setting aside $25 million to help school districts, the state and the University and Community College System of Nevada meet the expected spike in fuel bills in the coming two years.

Another part calls for $10 million to $15 million "for activities in the various school districts so nothing gets cut out like art or athletics or those types of things," the governor said.

The Clark County School District had considered cutting out $1 million from its athletic budget, which could have meant scrapping the statewide championship games. But that cutback was averted.

Guinn said, "It is a modified plan, and I've discussed it with them," referring to lawmakers and lobbyists. He stressed the new fees would be a "cost of doing business" assessment. In some cases, the state does not collect enough revenue to process some of the paperwork, he said.

Earlier this week Guinn said he was lukewarm to the second plan of James that would impose a fee from $150 to $50,000 a year on up to 172,000 businesses registered with the secretary of state.

The governor said, "We have a projected shortage of $1 billion in eight years. I'm concerned we don't start piecemealing it and do what we've done in the past and taking a particular revenue stream and taxing a group over here and not solving our revenue problem." James initially had proposed a $500 fee on each of these companies. And he would give a rebate to Nevada firms on their tax on employees. But that generated opposition from small corporations which said they would be paying anywhere from $100 to $400 more a year.