Raggio’s tax plan meets expected resistance

Erin Neff

Wednesday, April 2, 2003 | 9:22 a.m.

CARSON CITY -- Senate Majority Leader Bill Raggio prepared the Senate Taxation Committee for what he termed the "army of lobbyists" lined up to testify against his proposed tax shift.

And one by one, mayors, county commissioners and paid lobbyists proved him right during a 3 1/2-hour night hearing on Senate Bill 308 -- a measure Raggio says he wants to use as a bargaining chip in late session tax discussions but one that, according to his colleagues, lacks the votes to pass.

Raggio said SB308 -- which would take future property tax revenues from local governments and give them to the state -- is based on the counties' ability to pay what the state cannot.

But Marvin Leavitt, a lobbyist representing an urban consortium of Las Vegas, North Las Vegas, Henderson, Sparks and Reno, said the bill is bad policy because it forces local governing boards to raise taxes that will fund programs only the state controls.

"It's revenue without responsibility," Leavitt said. "It looks good. You don't have to go the voters and say you've raised their taxes."

That was part of Raggio's selling point, stressing that the $45 million the plan would raise by 2005 would not involve a single state tax hike.

Raggio, R-Reno, also argued that local governments have the money to spare because they have salaries 10 percent to 32 percent higher than state employees.

SB308 sets a baseline amount at the end of the current fiscal year. Any future increases from that amount in the assessed valuation of local property would then be considered above that limit.

Local governments would keep the existing funding and would get half of the new revenue, after money for schools and bond issues is exempted.

"I've heard so much chatter and have seen so many knee-jerk reactions to this bill before the details were even discussed," Raggio said.

"I'm not against the cities and the counties," he said. "I represent those people as well."

Raggio also reminded the committee, the packed standing room audience in Carson City and the crowd watching on television in Las Vegas that the state has serious funding problems.

"We're sitting here gambling that we're going to have enough revenue to get through the fiscal year," Raggio said.

But local government officials presented the same picture and said it made poor tax policy to "rob Peter to pay Paul," as Las Vegas Mayor Oscar Goodman said.

Goodman testified his city's preliminary budgeting has identified an $8 million deficit. He also said the bill would kill all redevelopment efforts because of the loss of tax increment revenue to redevelopment zones.

The cost to Clark County municipalities would be $50 million in year one, $90 million in year two and $130 million in year three, according to county lobbyist Mike Alastuey.

Henderson Mayor Jim Gibson said collective bargaining agreements -- authorized by state statute -- govern the salaries local governments pay. He also said the measure would kill ballot proposals to fund government because voters would be told that a portion of the payments will go directly to the state and not to fund the program.

"We are not in a position to solve this problem," Gibson said of the state's $704 million deficit in the next two fiscal years. "As the tide goes down, all boats go down."

Clark County Commissioner Chip Maxfield described the $3 million-a-month subsidies University Medical Center needs from the county to stay afloat. He also cited the $38 million in cost overruns at the Regional Justice Center as reason the county doesn't have the cash to lose.

"Clark County has been able to make these subsidies due to prudent and conservative budgeting," Maxfield said.

Raggio, who remained in the audience for most of the testimony, smiled and shook his head.

Raggio argues that since the state gets just 15 cents of property tax out of a $3.64 cap on $100 of assessed value, it is not benefiting from any of the growth in assessed valuation at the local level.

The city and county officials argued that the state actually gets 90 cents, because 75 cents is earmarked specifically for local school support -- something the state must provide.

The committee took no action on the measure.