Senators question deficit projection

Erin Neff

Tuesday, Dec. 17, 2002 | 11:07 a.m.

Two unlikely political allies are working together on a tax plan they say will solve Nevada's revenues problems without burdening businesses.

State Sens. Terry Care, D-Las Vegas, and Mark Amodei, R-Carson City, both requested bill drafts of a revenue plan on the same date, back to back.

And while both said their plan needs to incorporate better numbers, both are looking to alternatives to the gross receipts tax highlighted in the Nevada Task Force on Tax Policy recommendations.

"We thought it was important for someone in the Legislature to be doing some work on it and talking with their colleagues," Amodei said.

Amodei said a combination of increased taxes, analysis of population versus budget growth and eliminating certain mandates will free up enough money to stabilize the state short-term. The proposal also includes asking voters to approve a sales tax on services in 2004, which would be capped when it is implemented in 2005.

Amodei and Care were quiet Monday about specific numbers involved in their plan, in part, because both said lawmakers are being asked to hit a moving target.

"The deficit starts out that we're going to need to use the rainy day fund," Amodei said. "Then it's $300 million in the task force report and within two weeks, we've got an $800 million shortfall. You wonder what the number really is because it's moving around so much."

Care, who is also chairman of the state Democratic Party, said he and Amodei are still waiting for some economic data.

"We do agree that we don't want any gross receipts tax," Care said. "But that doesn't rule out a broad-based business tax."

Amodei and Care, although from different parties and different regions, were both in the same freshman senate class in 1999. Both found common ground when they opposed an arts tax break for casino developer Steve Wynn during that session.

Amodei, who is the new Judiciary Committee chairman, is an attorney who practices largely in business and real estate law. Care is a Las Vegas lawyer with a civil practice.

Support for the gross receipts tax is hard to find, with many senators declaring it dead on arrival and others reminding that it takes just "eight to kill."

Taxes must pass by a two-thirds majority, meaning eight of the 21 senators would be enough to kill any proposal.

A group of business lobbyists, led by Ray Bacon, Sam McMullen, Mary Lau and Nevada Taxpayers Association President Carole Vilardo, plan to unveil their alternative to the gross receipts tax proposal sometime this week.

The Las Vegas Chamber of Commerce has stated its opposition to the gross receipts tax, but has said it will support additional increases in business taxes and fees. The chamber has no plans to offer an alternative proposal to the gross receipts tax anytime soon, the organization's leader said.

"We're not prepared to do that right now," said Kara Kelley, president and CEO of the chamber. "You've got a deficit that changes every week.

"That's not to say that there isn't a need, but there's a legitimate hesitance from the business community," Kelley said.

Amodei said his plan attempts to diversify the state away from gaming revenue dependence while including Nevada's leading industry in the solution.

"Gaming and slot route operators would have a small part to play, as much because the perception is out there that people want them to be taxed," Amodei said of his proposal.

His proposal would include increases in property taxes and sin taxes, although Amodei said levies on alcohol and tobacco as identified by the tax task force should be re-examined.

Amodei said the proposal would hike the current business license fees and would steal a proposal Senate Democrats raised during the end of the 2001 session -- raising the room tax.

"It's a pass-through, but it has the ability for room rates to generate some money," Amodei said. "Arguably you're not hitting your own folks with it."

Amodei said tourists were not dissuaded from coming to Nevada when casinos tacked an energy surcharge of up to $3 per night on rooms to cover increased power rates.

Amodei also said part of his plan involves removing mandates to allow greater flexibility over spending at different levels.

"It's not to take the money back," Amodei said. "We're just going to remove the mandate."