Perkins blasts business on its objections to taxes

Erin Neff

Wednesday, Dec. 4, 2002 | 11:13 a.m.

Assembly Speaker Richard Perkins struck a pre-emptive blow Tuesday in what is expected to be a grueling tax battle in the upcoming Legislature.

With the session 60 days away, Perkins condemned the business community and emphasized that a broad-based business tax would be part of any proposal that clears his house.

"The state of Nevada is flat broke and in desperate need of revenue to maintain existing funding levels," Perkins, D-Henderson, said in a statewide conference call with reporters Tuesday.

Perkins, whose party holds a 23-19 majority, made his comments both to shore up support within his caucus and sound a warning to the business community.

"I can't say this any clearer," Perkins said. "Any tax bill sent to the governor will need Democratic support, and as speaker I can assure you that any tax bill leaving the Assembly must -- and will -- feature a broad-based business tax to fund education, senior services, public safety and other vital programs at levels our children and seniors deserve."

Perkins said his statements were prompted by Gov. Kenny Guinn's announcement Monday that the state will need $800 million in new revenue just to balance the budget. Perkins said the announcement made him question big business leaders who are working to kill a proposed quarter of a percent tax on a business' gross receipts that total more than $350,000.

"Ironically, at the end of the last Legislature, big business leaders expressed to me their desire to be a part of a solution to our budget crisis by contributing more across the board to our state's coffers," Perkins said. "What I've seen lately from them better reflects an attitude of hide and seek."

The Las Vegas Chamber of Commerce and the Reno-Sparks Chamber of Commerce have both come out against the gross receipts tax proposal. That tax, however, was the centerpiece of the 1,100-plus page report of the Governor's Task Force on Tax Policy in Nevada.

Perkins said chamber leaders are "declaring themselves unavailable and unwilling to remedy the problems they've helped create."

Kara Kelley, chief executive of the Las Vegas Chamber, said that's not true. She said her business organization is committed to working on a solution to the state's financial crisis.

"To suggest that the Las Vegas Chamber of Commerce has rendered itself out of the debate merely because it has expressed its opposition to one part of the proposal is nothing short of ludicrous," Kelley said. "I think it is the Legislature's responsibility to consider any and all options."

Kelley said the chamber's responsibility is to consider all taxes that impact the business community.

"To criticize the chamber for opposing gross receipts ... is, again, a ridiculous notion," Kelley said.

She said the chamber does support all of the proposals the task force made, with the exception of the gross receipts tax. Increases in the business license tax and fees that businesses pay will generate $400 million in new revenue over the biennium, she said.

And, she said, at the close of the 2001 Legislature, lawmakers thought the projected deficit was at $80 million a year.

"That means we will be generating $240 million more than what we promised 18 months ago," Kelley said.

Perkins sees the promise differently, saying the chamber vowed to be part of a broad-based solution. He said there is no reason the Dillard's at Fashion Show Mall should be the most profitable store in that chain and not pay the type of business taxes the corporation pays in every other state in the nation in which it operates.

The task force report, which is available on the state Legislature's website (www.leg.state.nv.us), says that the gross receipts tax is needed in addition to the other proposed tax increases to make up the state's deficit.

Guy Hobbs, chairman of the tax task force, said the gross receipts tax is part of a diversified solution that broadens and stabilizes the tax base and brings in the needed revenue to fill the deficit.

"There's obviously a way to do this without the gross receipts but you will need some other source of big revenue," Hobbs said.

Hobbs said he was disappointed by the Las Vegas chamber's press release stating support for a sales tax on discretionary services.

"This isn't the time any longer for generalities," he said. "What do they mean by discretionary?

"They tried to simplify something that is very, very complex by using terms like discretionary. It just does not work that way."

Hobbs noted that the chamber's talk of other business taxes fails to solve the problem because it doesn't rise to the level of the gross receipts tax.

"Are they truly intending for those to be a solution or (are the proposals) an alternative being suggested to move discussion away from the other tax," he said.

Senate Majority Leader Bill Raggio, R-Reno, said that while he does not think the gross-receipts tax will pass in its present incarnation, some type of business tax may be needed.

"Business just can't exempt itself," Raggio said. "At the same time we don't want to do something that is so inequitable that it is a disincentive for businesses to come here."

Raggio said everybody involved in the discussions has been having knee-jerk reactions.

"I'm not going to pre-judge this until we get the whole picture and see what the governor is going to do," said Raggio, chairman of the Senate Finance Committee. "It doesn't help everybody to go out on a limb and stake a position without understanding the ramifications."

Guinn had initially expressed support for the gross receipts tax, but has since been lobbied heavily to oppose it. He is reportedly looking at options to replace the $400 million revenue generated by the gross receipts. Guinn said Monday that the gross receipts tax would be complex to implement and "is not a quick fix."

Guinn's spokesman Greg Bortolin said "It sounds like the governor and the speaker are on the same page."

"In philosophy, the speaker and the governor are both on the same page and want to get the the same place," which is more revenue for the state, Bortolin said.

So far the only tax increases Guinn has committed to are on cigarettes and liquors and he has declined to say how much he wants to raise them.

Perkins said he was not yet certain whether Democrats will support whatever tax initiative Guinn proposes, or come with their own. He said he views the state's tax structure as a three-legged stool, with sales and property taxes as one leg and mining, gaming and insurance as the second.

"The third leg is the big business community who pays relatively nothing," Perkins said.

He said he would "rather a movie theater chain pay a small fee than a moviegoer pay a higher ticket price."

When asked about businesses that are threatening to leave the state if a broad-based business tax is enacted, Perkins said: "I think I'm willing to call that bluff."

Perkins rejected a proposal backed by the chamber and some Republicans for applying the sales tax to services. He called that plan "a complete pass-through to consumers" and said it is not a business tax.

He also said opposes shifting back to the state the share of property tax that goes to local governments. Perkins said he fears Clark County, the wealthiest of the state's counties, would end up being robbed to cover the state's deficit.

Raggio, however, on Tuesday again expressed support for revisiting the tax shift that gave the state's share of property tax to local governments.

Several of his fellow Republicans also have begun discussing making cuts in state government. Sen. Ann O'Connell, R-Las Vegas, for example, said she favors cutting the state motor pool and printing office, for example.

Perkins said that while "there's always room for cutting things" in government, he said that cuts O'Connell has identified will amount to fewer than $30 million.

"That's nothing to sneeze at but when you have an $800 million or $700 million hole, that's only one step along the way," Perkins said.

He said he "absolutely" opposes O'Connell's suggestion to eliminate the current class-size reduction program in some elementary school grades in some counties.

Perkins also stood by his pet project, the Nevada State College at Henderson, saying that while there may be room for cuts, he thinks the school will eventually provide financial relief to the state.

The campus opened Sept. 3 with about 180 full- and part-time students, but the 2001 Legislature had been told the college would draw 500 full-time students in its first semester. The state paid $3.75 million to fund the college's first semester and administrators have said they plan to ask the Legislature in February for $7.9 million for 2003-2004 and $9.1 million for 2004-2005 even though the campus president recently said he did not expect enrollment to be more than 250 for the second semester that begins Jan. 27.

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