Columnist Erin Neff: Hypocritical chamber resists a fair tax solution at all costs

Erin Neff

Friday, May 30, 2003 | 5:39 a.m.

CARSON CITY -- The Legislature is supposed to adjourn tomorrow night with a budget to operate the state government and the new revenue to fund it.

But in the waning days of the 120-day session it became apparent to all that the reason tomorrow's end is still in question is that the Las Vegas Chamber of Commerce continues to arrogantly ignore its promise to the state and obfuscate the debate with ridiculous proposals.

If the chamber just once, in the past 119 days, had agreed to work with, and not against, those seeking a broad-based business tax, the Legislature would already have sine died.

Instead, the group does everything to oppose a tax it likes to ignore by skipping hearings on the Unified Business Tax and ignoring the consensus-building many are engaging in to get two-thirds of the Legislature to approve a tax plan.

The chamber-led Business Representative Group this week peddled a new, new, new plan. The only motive -- build opposition to the UBT.

Thanks for coming to the table, guys.

At the end of the 2001 session, the chamber swore it would be a part of the solution to Nevada's budget crisis. The group insisted that business was going to be a good community partner and help fund education, provided other industries came to the table.

Gaming is there -- although sitting at the kids' table offering just a 0.25 percent increase in the gaming levy. Mining, the state's third-largest industry fought against increasing the net minerals tax, but has consistently lobbied on behalf of a business tax to which the industry would contribute heavily.

What has business been doing?

This week the BRG offered its third (or it could be fourth by the time you read this) plan. The latest would involve a payroll surcharge tax. A business would add up all of its payroll expenses and pay a tax on it. The tax would be on a sliding scale ranging from 0.55 to 1.95 percent.

The payroll tax would replace the current per-employee tax, and it would not target the biggest business after all.

Wal-Mart would pay somewhere from $600,000 to $2.3 million depending on which of the sliding rates was applied to its $120 million payroll cost.

Under the UBT, which would tax 0.25 percent of a business' gross receipts or 1 percent of a business' gross receipts minus the cost of the business' goods, Wal-Mart would pay $4.6 million.

At the start of the session, the chamber had argued against increasing the "head" tax -- a per-employee levy -- because it said the tax wasn't broad-based.

Now the group essentially supports the type of employee-based tax it has already admitted isn't broad-based enough to pass Speaker Richard Perkins' Assembly.

That's no surprise from the chamber, which has tripped over itself all session long to offer conflicting plans.

Last Tuesday the BRG offered its $988 million tax plan to "go home." That plan focused on a 1 percent sales tax on services (no payroll tax in sight).

The very day after proposing the $988 million, the chamber urged its members in an e-mail to block the governor's $1 billion tax plan. There was no mention of the fact that Gov. Kenny Guinn has promised to veto any plan that includes a service tax that impacts the average person the way a sales tax on services would.

When the chamber offered its first plan roughly halfway through the session, it included a 5 percent sales tax on services.

I guess the chamber thinks no one is watching the hypocrisy peddled by CEO Kara Kelley and her board of directors.

Business knows it can't get past Assembly Speaker Richard Perkins, D-Henderson, or Guinn, so the lobbyists are hoping they can drum up enough confusion in the Senate, where Majority Leader Bill Raggio, R-Reno, hasn't offered much leadership on tax direction.

Instead of addressing the UBT and suggesting ways to improve the tax, the chamber seems to only be accommodating those who believe a special session is some kind of victory.

A broad-based business tax would not only make business pay for many of the services its employees use, it would help stabilize the economic base in a way that should make the state less reliant on volatile gaming and sales taxes.

Lawmakers would be wise to reward the chamber for its behavior and help the group remember the promise it made to this state.