Tax task force has plenty of problems on its plate

Erin Neff

Tuesday, Feb. 12, 2002 | 9:18 a.m.

It's been just one month since the Task Force on Tax Policy met, but with each passing week the state's economic news seems to be worsening.

When the task force holds its third meeting Wednesday morning the group will have plenty of grim information in mind.

The Regional Transportation Commission recently announced it would seek tax hikes to raise $2.5 billion over the next 25 years to fund road projects and new buses.

Gov. Kenny Guinn reported a current $37.5 million shortfall to the legislative Interim Finance Committee last week. Gaming revenue is down 4.2 percent for the first six months of the fiscal year.

Rising malpractice insurance costs are forcing some doctors to leave the state and threatening the level of trauma center service at University Medical Center.

The school funding crisis will take center stage Wednesday as Jack McLaughlin, state superintendent of education, reports a $23 million shortfall for Clark and Washoe counties. Clark County schools are facing a $16 million shortfall next year.

Carole Vilardo, president of the Nevada Taxpayers Association, said the recent news shouldn't actually affect the task force's work.

"The committee was already informed of what the shortfall was, so I don't see any changes there," Vilardo said.

The big question is whether the voting public will begin to show an interest in the task force's work, and ultimately, make decisions at the ballot based on the tax issue.

"I think it's too soon to figure out," Vilardo said.

State Sen. Bob Coffin, D-Las Vegas, who chaired the Tax Committee in 1991, said voters won't pay attention to the task force and its recommendations unless their taxes are raised.

"I don't think the average voter is concerned about it," Coffin said. "They kind of go with the flow and assume that the governor and the Legislature will do something."

The state's tax problems essentially stretch back to the late 1970s, when a shift was made from property tax to gaming and sales taxes. Those two taxes are highly vulnerable to national economic slumps and have generated state studies during past recessions.

Some say the state has a structural defect because it relies so heavily on volatile taxes. Others say the volatile tax base, coupled with numerous tax exemptions over the years and the state's rapid growth, have created the problem.

Wednesday's meeting will begin with a report from the task force's technical working group about the structural defect issue. The task force, appointed by the governor, is expected to make a recommendation just prior to the start of the 2003 legislative session.

The meeting begins at 9:30 a.m. in room 4412 of the Sawyer State Office Building, 555 E. Washington Ave. It is also broadcast live over the Internet by clicking "Listen to Meetings Live on the Internet" at www.leg.state.nv.us