Lawmakers face sobering task of meeting budget demands

Erin Neff

Tuesday, Dec. 3, 2002 | 11:23 a.m.

Monday's recommendations by the state Economic Forum were a sobering reminder for lawmakers just how critical the decisions they make in the 2003 session will be.

The resounding theme Democrats heard was that Nevada needs a big solution, while Republicans suggested that the state needs to reexamine such spending to cut costs.

Senate Minority Leader Dina Titus, D-Las Vegas, referring to national lists of services in which Nevada trails the nation, said it's disheartening to learn for sure that "you raise taxes just to stay on the bottom of every list."

Titus said she does not think a Band-Aid solution to the problem will suffice when the Legislature convenes for its 120-day session in February. The state has a $350 million deficit, which Gov. Kenny Guinn will reportedly ask the Legislature to immediately approve increased taxes on cigarettes and liquor to help fill.

The Economic Forum said Monday that despite a rebounding economy and growth in fiscal year revenue forecasts from earlier projections, the state will still need $700 million in new revenue over the next two years just to fund current programs at their existing levels.

Assemblyman Bob Beers, R-Las Vegas, spoke Monday night from a crowded bar at McCarran International Airport wondering if the numbers were wrong.

"People are still coming here," Beers said. "You have to think that if the economy is that bad, people are leaving, not coming to the state and there will be less demand for services."

Beers also said he thought talk of a structural defect in the state's economy was flawed because the only potential loss of revenue he can determine are Internet sales not subject to state sales tax.

But Titus said she thinks the Legislature needs to embark on a "big visiting of the tax structure."

"And a business tax has to be an essential part of the solution."

In recent weeks the Las Vegas Chamber of Commerce has stepped up its opposition to a proposed gross receipts business tax. That proposal would impose a one quarter of one percent tax on gross receipts greater than $350,000.

The chamber supports looking into ways to recoup taxes from Internet sales and wants to impose sales taxes on unspecified services. Beers said increasing sales taxes on a service-based economy makes sense.

State Sen. Ann O'Connell, R-Las Vegas, said she thinks the state needs to reorganize rather than raise huge amounts of new revenue.

"The things we do just for government employees that don't benefit the taxpayer, those things have to go," O'Connell said.

She said taxpayers should not foot the bill for continued increases to the state's budget. The budget hiked 18.4 percent in the last biennium.

O'Connell said she would support getting rid of the state motor pool and the state printing office, to name just two state employee benefits. She also said Nevada can save about $1 million by changing the current class-size reduction program in lower grades from one teacher to 16 students to the 1-to-22 model proven a success in Elko County.

In a press conference today, Assembly Speaker Richard Perkins, D-Henderson, was expected to call on the community to keep an open mind on all tax proposals until the Legislature can begin its deliberations.

"If nothing else, the Economic Forum's determination and deliberations tell us there is a need," Perkins said Monday. "The need is fairly significant when you consider we're last or near last on every national indication."

Assembly Minority Leader Lynn Hettrick said that while he supports increases to so-called sin taxes and a tax on amusements, he does not support the current business tax proposal. He thinks the state can make meaningful cuts.

"If you really went at it I think that you could probably cut a lot," Hettrick said. "But when you start to gore somebody's ox they start to get pretty vocal."

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