Editorial: Get behind broad tax on business

Friday, April 11, 2003 | 5:48 a.m.

WEEKEND EDITION: April 13, 2003/Font>

The Legislature is 2 1/2 months into its four-month session, and its primary mission of passing a tax bill to rescue education and other state services remains a tangle of proposals. It's made a little progress, however. At the start of the session we heard a lot of irresponsible talk about eliminating the state's deficit of more than $700 million by cutting programs. That has died down, thanks in part to Senate Majority Leader Bill Raggio, R-Reno, a fiscal conservative who acknowledged that Gov. Kenny Guinn had already cut Nevada's budget down to the bone.

Now there is consensus that taxes must be raised significantly, a turnaround that has drawn national attention because Nevada politicians traditionally eschew such a notion. We are pleased with this development but remain uneasy with the Legislature's tempo. There are two tax bills and two tax proposals, along with a few ideas for increasing specific taxes, such as the real estate transfer tax. But we see little evidence of legislators approaching agreement on one, coherent bill that will enable the state to continue providing essential services without risking financial crisis.

Guinn's tax bill, which would raise state tax collections by $500 million a year, includes a business tax of 0.25 percent on gross receipts above $450,000. This is the tax that is inspiring discord in the Legislature. Sens. Terry Care, D-Las Vegas, and Mark Amodei, R-Carson City, have introduced an alternative bill without this tax and the Las Vegas Chamber of Commerce and Assembly Minority Leader Lynn Hettrick, R-Gardnerville, have offered proposals that also exclude this tax. In our judgment, Guinn's bill is the fairest, as the gross receipts tax would be broad based and would finally result in large banks and large retail stores paying their fair share.

Part of the battle appears won, as bankers last week recoiled at legislation that makes the gross receipts tax look light by comparison. It would impose a 14 percent excise tax on financial institutions. Speaking for their industry, the bankers endorsed the gross receipts tax as a much more agreeable alternative. And Guinn's forceful words last week may finish the job of bringing about the next step toward consensus among legislators. He vowed that if the Legislature did not agree on a broad-based business tax during its regular session, he would call a special session. In other words, pass it now or pass it later. Guinn means business. The Legislature should too.