Editorial: New plan for taxes falls short

Friday, March 28, 2003 | 4:28 a.m.

WEEKEND EDITION: March 30, 2003

At a time when national and in-state studies repeatedly demonstrate that Nevada is seriously under-funding education and social services, Assembly Minority Leader Lynn Hettrick has come out with a plan that would cut funding for education and social services. Hettrick, R-Gardnerville, last week offered the second major alternative to Gov. Kenny Guinn's plan to raise taxes by $1 billion over the next biennium. Hettrick estimates the new and increased taxes in his plan would raise $636 million over the biennium. As for the other $400 million that Guinn would raise, Hettrick says that money, including $2 million for the legal fight against Yucca Mountain, could be cut from the budget. The main areas he cited for cuts are higher education, K-12 education and government assistance for needy families.

Hettrick's plan mirrors the plan submitted two weeks ago by Sens. Terry Care, D-Las Vegas, and Mark Amodei, R-Carson City, in one major way -- it does not include the mainstay of Guinn's plan, a tax on the gross receipts of large businesses. The Care-Amodei plan recognizes the state's need for revenue on the scope of Guinn's plan and proposes enough alternatives to compensate, at least on paper, for the lack of a gross business tax. Hettrick's does not.

Hettrick's plan has some credible proposals, such as raising the real estate transfer tax. But given Nevada's critical need to increase its funding for education and social services, Hettrick's plan, taken in whole, simply does not offer enough new revenue. We agree with educators, who have made a strong case for raising a billion dollars just for schooling alone, who say enhancements to education funding under Guinn's proposal are what is minimally needed to serve the growing enrollments. Hettrick's plan cuts millions from Guinn's K-12 educational proposals, closes the Nevada State College at Henderson and reduces the growth of the state's welfare caseload.

The state must confront its $700 million deficit in a responsible manner, and so far Guinn's plan is the most reasonable to us. The gross-receipts tax on business is a stable source of revenue and helps spread the tax burden more evenly than the other plans. Hettrick's plan, which would see Nevada fall even further behind in providing vital services, offers the ultimate in instability.