Columnist Jeff German: Governor must take charge in tax debate

Friday, Nov. 22, 2002 | 4:16 a.m.

GOV. KENNY GUINN and state lawmakers are gearing up for one of the most contentious and important legislative sessions in years.

If lawmakers make it out alive, the 2003 Legislature will be known as the session that expanded the tax base to keep Nevada in sound financial shape for years to come.

Already, powerful special interests are at work pulling Guinn left and right, trying to make the best deals for themselves, as the governor decides which combination of taxes to present to the Legislature.

The casino industry has joined forces with the Culinary Union to push Guinn into selecting a gross receipts tax on businesses as the lynchpin for his tax plan. The casinos, which already fund a large share of the state budget, want the rest of big business, including the developers and financial institutions, to pay their fair share.

The Las Vegas Chamber of Commerce, which represents some 7,000 local businesses, including the developers and bankers, says the gross receipts tax is unfair to businesses with smaller profit margins. It favors broadening the sales tax to those who provide services, such as lawyers, doctors and accountants.

But that, according to the Culinary Union, will put the burden back on ordinary citizens who pay for those services.

So the debate rages on as Guinn moves closer to preparing the 2003-04 budget, knowing that he needs to generate at least $450 million a year in new revenue to keep the state afloat.

The governor has an incredibly difficult job ahead of him, but he can't allow the competing special interests to run rampant, pushing their own agendas. That could tear apart the Legislature and keep him from reaching his goal of spreading the tax burden equitably.

Guinn also has to get reluctant lawmakers on board the tax train, even if it means twisting a few arms and reminding them that they have an obligation to the voters to help him resolve this financial crisis.

With a steady decline in revenues coming into the state's coffers, Guinn has been laying the groundwork for the tax increases throughout his term, trimming his departments, imposing hiring freezes and cutting his budget wherever possible.

But now he must bring it all home, as quickly as possible, with his tax proposals and do what he does best -- build a consensus heading into the legislative session in January. Then he has to stay on top of lawmakers to make sure they finish the job.

It's a Herculean task, but Guinn has to rise to the occasion. He has to assert himself and show some leadership.

So far the governor hasn't committed to anything other than increasing taxes on cigarettes and alcohol, which most of the power brokers support.

But Guinn knows he must step up to the plate soon and choose between a gross receipts tax or a broader sales tax.

"I'm in a position to do what I think is right," he says. "I've been talking about this for two years, and it's coming down to the wire."

Indeed it is.

How well Guinn reacts under this pressure will be a true test of his leadership skills. It will be a defining moment for his administration.

If the governor sees his job as merely presenting the problem to lawmakers in Carson City in January and then walks away from it, nothing meaningful will be accomplished.

So Guinn not only has to get the ball rolling, but he also has to slam dunk it through the Legislature.

What happens this session probably will determine the fate of education, the biggest single expense in the state budget, for the next decade or more.

It will affect all of us and probably be Guinn's legacy.

Does he want Nevadans to say they're better off when he leaves office four years from now than when he was first elected four years ago?

You bet he does, which is why the governor has to take charge of the tax train now and not let it run out of fuel.