Editorial: Guinn must be a leader on tax plan

Wednesday, Jan. 8, 2003 | 9:13 a.m.

Other than to declare that Nevada needs more revenue in the face of a projected $800 million deficit over the next two years, Gov. Kenny Guinn has been cautious whenever speaking about new and expanded taxes. The legislatively mandated Governor's Task Force on Tax Policy met from December 2001 to November 2002 and Guinn did not make its work harder by interjecting his opinions. Near the end of the task force's assignment, however, he spoke favorably about some of its recommendations, including expanded sin taxes and a new gross receipts tax.

Yet his main strategy remained -- cut state spending wherever possible, wait for the task force to finish and then study its suggestions, along with the suggestions from his advisers, interest groups, legislators and individuals. Given that his re-election was a certainty, he could have campaigned on the need for more revenue and pushed for specific tax increases. He didn't. He could have used the months after his election to outline a specific tax agenda. He didn't. This reticence could make it much more difficult for him to build a coalition to pass a broad-based business tax during the 2003 Legislature. Yet perhaps his caution is correct, given the desperate need for new taxes and this state's historic aversion to them. Approach a hornets' nest cautiously and you may pass without harm. Throw a rock into it and look out. Given his strategy of caution, we were surprised -- and impressed -- when the governor made some forceful remarks at a news conference Tuesday following his! inauguration.

The gross receipts tax emerged as the task force's workhorse. It would easily raise $250 million a year, alone cutting the state's deficit by more than half. It would add 0.25 percent to the gaming tax and impose this same amount on the gross receipts of all businesses with more than $350,000 in annual revenue. The tax is strongly opposed by the powerful, 7,000-member Las Vegas Chamber of Commerce and is expected to be a tough sell in the Legislature. At the news conference, Guinn was not meek in opposing the chamber's alternative -- an expanded sales tax on services. He flat-out rejected the plan and said there would be "open discussion" of the gross receipts tax.

We sense that this kind of leadership will be needed regularly once the Legislature convenes.