Concerns over new taxes crop up in debate

Erin Neff

Friday, Feb. 7, 2003 | 11:09 a.m.

CARSON CITY -- Lawmakers began discussing taxes Thursday, addresssing not just whether increased revenue is needed but also what should be taxed and at what level.

Members of the Assembly and Senate Taxation committees began airing individual concerns about particular taxes during the second day of presentations from the Nevada Task Force on Tax Policy.

The debate in the coming weeks will focus on two distinct bills -- but both total tax packages -- from the task force and the governor's office.

The task force is recommending raising $813 million in new revenue from tax and fee hikes and the implementation of two new taxes over the next two years, while Gov. Kenny Guinn's proposal raises $994 million without using one of the task force's proposed new taxes.

Some of the comments from committee members Thursday indicated how the policy debate is likely to play out.

Sen. Sandra Tiffany, R-Henderson, said that continued revenue growth proves the state's economy is healthy. But Assemblyman Bernie Anderson, D-Sparks, seemed to agree with the task force's assumption that a $705 million deficit exists between revenues and what is needed to keep up with existing services given population and caseload growth.

The Legislature's leadership is already talking about the need for just one tax proposal to encompass all of the proposed tax increases. That way a lawmaker would have to decide the merits of the entire plan versus any distaste for a particular tax.

"I only want to vote once on taxes," Assembly Speaker Richard Perkins, D-Henderson, said in an interview.

In the committee, however, that goal proved elusive as individual lawmakers questioned everything from the proposed gross receipts tax on business to what entertainment should be included in the amusement tax.

The task force envisioned a 6.5 percent tax on amusements, but exempted participatory sports such as bowling and golf. Movie rentals and concert tickets would be taxed.

"Based on the number of e-mails I've gotten, movies and video rentals are the biggest sport in the state," said Assemblyman Harry Mortenson, D-Las Vegas.

Sen. Joe Neal, D-North Las Vegas, said the task force's view of the amusement tax applying to spectator activities but not participatory ones should have different terminology.

"This is middle class activity versus rich man activity," Neal said.

Sen. Dean Rhoads, R-Tuscarora, warned that including rodeo tickets as spectator activities subject to the tax could cost Las Vegas the National Finals Rodeo. Rhoads had tried to tax rodeo tickets in the past, but was lobbied heavily by the Professional Rodeo Cowboys Association and threatened with a move of their national finals, he said.

"I don't know if times have changed," Rhoads said.

Sen. Randolph Townsend, R-Reno, said he could not figure out how the task force could exempt golf but not movies. He offered a joking compromise -- tax golf per stroke.

Guinn said Thursday his bill will follow the task force's recommendations on how the amusement and admissions tax burden should be distributed. However, he also said he would not veto a bill that includes participatory sports such as golf and bowling in the tax.

Lawmakers also questioned the proposed cigarette tax increase. The task force is recommending a 35 cents per pack increase. The governor is recommending a 70 cents per pack increase.

Sen. Ann O'Connell, R-Las Vegas, warned that the last time the state raised the cigarette tax it took two and a half years for the level of consumption to rebound.

Assemblywoman Kathy McClain, D-Las Vegas, is a smoker who is concerned that people like her might choose to buy their tobacco via the Internet to skirt the tax.

"I see a huge flight to Internet sales," McClain said.

A drop in consumption also worried Assemblyman David Goldwater, D-Las Vegas, who expressed concerns about the amount of money Nevada would get in the future from the 1997 tobacco settlement.

The settlement disbursements to states, which fund Nevada's Millennium Scholarship program, are based on consumption.