Tax panel to send proposals to Guinn

Thursday, Nov. 7, 2002 | 10:56 a.m.

The task force studying ways to strengthen Nevada's tax base has released a summary of its proposed recommendations that includes a mix of new or increased business, property, entertainment and sin taxes.

The Governor's Task Force on Tax Policy in Nevada, which met Wednesday in Las Vegas, is scheduled to approve its final recommendations on Nov. 13. The report will then be forwarded to Gov. Kenny Guinn and the Legislative Counsel Bureau, with most of the new taxes set to take effect July 1 if approved by the governor and the Nevada Legislature.

Task force Chairman Guy Hobbs, a former Clark County chief financial officer and managing partner of the Las Vegas consulting firm Hobbs, Ong & Associates, said he believes the panel has achieved the goals established by the legislative resolution that created the task force.

"We have broadened the tax base," Hobbs said after Wednesday's meeting. "We have identified additional revenue opportunities. It's a pretty balanced package. We are also providing a statistical database and a fiscal model that didn't exist before that will help the state in the future."

The latest figures from the eight-member task force indicate that its recommendations would raise $333 million in new revenue for the fiscal year beginning July 1 if all were adopted. That would be $5 million more than the projected $328 million general fund deficit for next fiscal year if nothing was done to increase taxes.

But those figures may be revised based on the impact projected medical inflation costs could have on the state budget, Hobbs said.

The latest task force projections indicate that its recommended tax increases would more than make up for projected state budget deficits through 2008 but fall an estimated $30 million short in fiscal 2009 and $62 million short in fiscal 2010.

The recommendations in the summary include:

There are still differences of opinion over some details, however. One example involves the extent to which participatory forms of entertainment such as golf and bowling should be included in the proposed entertainment tax that would also be applied to spectator activities such as professional sports and concerts.

Last week, the task force voted 6-2 to include participatory activities in its recommendations for a new entertainment tax. But on Wednesday, the task force voted 5-2, with one member absent, to add an alternative recommendation that would exclude participatory activities from the new tax while increasing property taxes by as much as 15 cents per $100 assessed valuation, rather than a 10-cent increase.

Task force member Brian Greenspun, president and editor of the Las Vegas Sun, made the latest recommendation after expressing concern about the impact a tax on participatory activities would have on family budgets. But he also recommended that the Legislature study whether certain participatory activities should be taxed.

"My view is that it just needs more study," Greenspun said.

But fellow task force member Nancy Wong, vice president of Arcata Associates Inc., a North Las Vegas engineering firm, disagreed with the recommendation and wanted participatory activities included in the entertainment tax.

"I would prefer not to go down the road of splitting the entertainment tax between spectator and participatory," Wong said.

The task force also took under consideration a brewing tax dispute between the cable television industry and two companies that provide television services in Nevada through direct broadcast satellite.

The cable industry, which pays a 5 percent franchise "tax" to local governments, believes that the competing satellite broadcasters ought to pay a similar amount of taxes to level the playing field. But representatives of the satellite broadcast industry say the franchise levy paid by cable is for use of government rights of way, which does not apply to their industry.