Friday, Dec. 20, 2002 | 4:43 a.m.
THE XBOX may be a hot item on Santa's list this year, but 20 years ago when the state's real tax problems began, "Pitfall" for the Atari video game system was all the rage.
The object of the game was to get your little explorer guy to run, jump and swing over obstacles like scorpions, trap doors, and alligators as he raced against the clock to pick up treasure.
Lawmakers may want to remember the video and the time deadline the explorer was under: A decision lawmakers made back then continues to fuel a real game of "Pitfall" for the 2003 Legislature.
Nevada homeowners probably had a little extra cash to buy Atari systems in 1982 after the 1981 Legislature fell for its own fad, which has become known as either the Tax Shift of 1981 or the Tax Shaft.
That year lawmakers feared the anti-tax revolt in neighboring California. The Golden State passed Proposition 13, a plan that slashed property taxes and ended up hurting public schools.
The Nevada Legislature decided to change the state's revenue structure by shifting the source of most of the money received to fund things like schools. Instead of property taxes, a stable source of revenue, the state opted for gaming and sales.
Over time, that shift destabilized Nevada's tax structure, leaving the state without a reliable bank of revenue during bad economic years. Two decades of boom-and-bust economics has led many to the conclusion that Nevada has a structural deficit.
Nevada's economy is ripe with pitfalls worse than any tar pit or falling rock. The state has proven that record growth doesn't give you a leg up during a recession. After a decade of boom we've got a projected $800 million deficit over the coming two years.
And one need only look to Sept. 11, 2001, to see how quickly tourists can stop coming. Al-Qaida is decidedly worse than anything video-game maker Activision created for Atari.
If the 2003 Legislature decides to really address the state's funding problems, it will mean far more than arguing over a broad-based business tax.
The lobbying on taxes began this summer and has reached a crescendo as Gov. Kenny Guinn readies his budget.
In theory, the state Task Force on Tax Policy's recommendations, which include a business gross receipts tax, can get the state out of its current hole.
But in political reality, that tax has already been gobbled up by the alligators at the Las Vegas Chamber of Commerce and in the Republican Party.
From the time the Legislature convenes Feb. 3 until its ordered adjournment 120 days later, anything can happen on taxes. And the state's fiscal priority might not get solved by June 2.
There are so many pitfalls along the way that everyone involved in the state's tax discussions is already fearing a special session.
The minute one group doesn't like what it sees, whether it is the chamber or the Nevada State Education Association, the threats of initiative petitions will come.
The teachers' union has already tried to legislate taxes by petition once. Then there are the threatened lawsuits held as trump cards in the tax debate.
In Arizona (that other fast-growing state), schools sued to get the state to pay for construction costs for inadequate schools. The state legislature convened a special session and settled. The price tag: $1.07 billion.
When Clark County School Superintendent Carlos Garcia warns of having 30 schools needing improvement based on recent standardized test results, he's also putting lawmakers on notice.
The chamber has its members to please, and the gaming industry to worry about.
Gaming, through the one-man letter-writing jihad of tax task force member Mike Sloan, is pushing for the gross receipts tax on business. Sloan, an executive at Mandalay Resort Group, promoted the idea and helped lobby the tax panel to approve it in its recommendation.
The chamber calls the tax supremely unfair, with the levy impacting different businesses in different ways. The tax on some businesses, the chamber says, will be 40 percent.
Then there are the political pitfalls as Guinn tries to run his plan past an ever-shrinking pool of GOP supporters the same way that video game explorer used to speed by the emerging water.
Lawmakers are never fond of raising taxes. And the stakes couldn't be higher for any of the 63 legislators with an eye on higher office or, even, re-election.
The treasure of the 2003 session will be a compromise that makes business, gaming, residents and tourists all part of the solution. And, if they can avoid all the pitfalls, lawmakers might even beat the clock of the 120-day session.
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