Tax panel still diagnosing woes

Erin Neff

Thursday, Jan. 17, 2002 | 9:39 a.m.

After six hours of economists, projected numbers and hundreds of computerized presentations, the Governor's Task Force on Tax Policy seemed so spent it was gleefully anticipating a road trip to Elko.

Tuesday's second meeting of the appointed panel was aimed at identifying the root problem of Nevada's tax woes to eventually enable the committee to recommend a way to fix them.

"It's important that we can establish some sort of baseline," said Guy Hobbs, the committee chairman as the meeting began.

But getting to that baseline is proving a tricky first step for the panel. First came slightly conflicting presentations from state economist Bill Anderson and UNLV professor Keith Schwer.

Some numbers compounded inflation. Others didn't. Some figures were based on Census data that everyone agreed had severely undercounted Nevada residents. And economist Jeremy Aguero discovered state reporting methods changed from year to year with some agencies disappearing and others merging.

Counties such as Clark submit detailed reports to the state with greater sophistication than smaller counties in rural and northern parts of the state.

The bottom line after nearly every lobbyist, citizen and even two committee members had left, was that Nevada faces somewhere between a $50 million and $150 million gap between current revenues and expenditures.

That's about as close as the panel could come identifying the root problem.

After the meeting, Hobbs said the task force will probably design its assumptions based on the midpoint in that range -- $100 million a year.

But if the committee does come up with a recommendation to raise certain taxes or implement new ones to close the gap, some legislators might use numbers to suggest the gap is more like $50 million while others could put it higher.

"I can't predict that part of it at all," Hobbs said. "This is about how much of a comfort level you can establish. If a problem isn't well-defined, you'll have people trying to use other assumptions.

"We're working as hard as possible to get a group like this to agree on a recommendation," he added.

The task force was created by the Legislature to determine what type of tax policy is the best way to support K-12 education and long-term care amid soaring energy costs and growth that doesn't pay for itself.

The group was supposed to hear a report Tuesday from Jack McLaughlin, the state superintendent of public instruction, that included the dire forecast that Clark County schools may be $15 million in the hole in the next fiscal year.

But that presentation, which drew Clark County Superintendent Carlos Garcia to the meeting, had to be pushed to the task force's next meeting because so much time was allotted Tuesday to the economists.

The material was even dry by the standards of the "pointy-headed academics," as Schwer twice called himself.

Anderson spent hours rehashing a report he gave 18 months ago at the governor's revenue forecast session. Then he drew skeptical looks from hotel executive Mike Sloan of Mandalay Resort Group when he said Nevada actually saw a 1.1 percent increase in new jobs since Sept. 11.

Sloan asked whether the figure included thousands of hotel workers who had been called back to work after being laid off.

"Do those count as new jobs?" he asked.

Projecting recovery from the current recession based on the recession of 1991 and 1992 could also be problematic, committee members suggested.

Just in the gaming industry, Sloan said, competition from other states and slowing growth of the industry in Nevada, makes it a different ball game.

After a lengthy report predicting flat growth for the next two years, Schwer made the simplest point of the day in advice to the task force.

"You should look at the tax structure the way a physician looks at a patient," he said. "Do minimal damage."

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