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September 2, 2014

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Guinn’s plan to phase in taxes will be opposed

CARSON CITY -- Gov. Kenny Guinn's proposed tax plan calls for various new and increased taxes kicking in at different times, with some starting as soon as April -- but Senate and Assembly Democrats may prevent that from happening.

If the Democrats hold firm, smokers, drinkers and the business owners who would be tapped in the first round of Guinn's plan could avoid tax increases for a few more months.

Senate Minority Leader Dina Titus and Assembly Majority Leader Barbara Buckley, both of Las Vegas, say all the facets of the tax plan need to be effective at the same time. "It shouldn't go through in pieces," Titus said. "If you do the early pieces, like cigarettes and liquor, it hits the poor little guy first. That's not fair. And it's like a Band-Aid, you may never get around to the other (parts of the tax package.)"

Neither party has the required two-thirds majority that is required to pass a tax. Republicans control the Senate 13-8. Democrats control the Assembly 23-19.

Guinn's press secretary, Greg Bortolin, said the first order of business is to pass the early taxes to take care of the deficit this year. He said the other taxes can be effective later.

Senate Majority Leader Bill Raggio, R-Reno, in backing up the Guinn stance, said Guinn's first round of tax bills must be passed early or "there will be layoffs, there will be cuts and programs will be impacted."

But Titus and Buckley said Guinn wants to impose some tax increases early to replenish part of the state's "rainy day" fund with $50 million. Buckley said the Legislature will be in session and can take care of any emergency that may arise without having to dip into the fund.

Titus said the rainy day fund "is not essential to keep the doors (of state government) open."

She said if Guinn presents compelling evidence that he needs the money early, then Democrats would go along with an immediate tax bill but would put a "sunset" date on it, making the legislation expire on July 1 unless all other parts of the tax package are enacted.

"He's got to really convince us that he needs that money now," Titus said.

Buckley said: "The taxes this session should not take place in a piecemeal way. We need to examine the true state of the budget and we need to ask ourselves 'What cuts can be made? What improvements can be made?' And then we need to consider all of the tax proposals.

"I think we feel strongly we are not going to agree to any taxes until we see what is needed and look at all of these proposals to see if they are fair.

"Personally I'm very concerned about taxing movie tickets. I think the everyday person in my district has been paying their fair share."

Guinn plans to take $100 million from the $136 million in the rainy day fund. He would replenish it by putting $50 million back in each of the coming two fiscal years.

His plan also calls for boosting the cigarette tax by 70 cents a pack, increasing liquor taxes by 89 percent and raising the business activity tax from $100 per employee to $300.

Titus said there is no consensus among Democratic senators as to what should be in a tax package. But she said her group was solid on requiring that there be one bill, rather than enacting these taxes separately.

Guinn also wants to enact a 6.5 percent amusement tax starting July 1 and a gross receipts tax on businesses in two years.

The Guinn administration will present its case for early tax increases Tuesday at a meeting of the legislative taxation committees.

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