Tax rebate, new school program top Guinn plan

Monday, Jan. 24, 2005 | 10:55 a.m.

CARSON CITY -- Gov. Kenny Guinn says he can hardly wait to deliver his State of the State address tonight to outline his priorities in the estimated $5.7 billion budget that includes a new education program for young children, a $300 million tax rebate and potential relief for rising property value.

It will be his last State of the State message to the Legislature as his term ends in January 2007, and he says this is the "best circumstance" he has been in during his six years.

"I'm not going to run away from any good news," he said Friday. "I didn't have a chance to run from the bad news for the last six years," including two years ago when he proposed a major tax increase.

"The good news means we can do more for our children, for health and mental health. They will be very surprised to see what we're able to do," he said.

His speech will be "very positive," said the governor. "Things we've been doing for six years are starting to pay off."

The governor has already disclosed he will recommend a new program for low-performing schools' grades 1-6. A trust fund will be established and he said the new project will be evaluated to make sure it is working.

Every motorist in Nevada will receive up to a $300 rebate for each vehicle, under the Guinn plan. There is already criticism from some sectors that suggest the $300 million would be better spent on other things such as education, highway patrol and human resources.

"People can disagree," he said. "Some will suggest more (of a tax rebate) and others may want less. In fairness they don't have all the information now. Most of them will say it is fair."

He has said he will recommend "modest" pay raises -- probably 2-3 percent -- for state workers, schoolteachers and university officials. He suggests selling a $100 million bond issue to finance his Millennium Scholarship program that is running short on money.

He is going to put more money into the $120 million "rainy-day" fund but he hasn't said how much.

He will address a joint session of the Legislature tonight. The lawmakers, except those on the budget committees, will return home and then come back Feb. 7 to start the formal session.

The Senate Finance Committee and the Assembly Ways and Means Committee will start their hearings Tuesday on the governor's budget.

Opposition to some of Guinn's announced plans has already begun. Some legislators don't want to give the $300 million tax rebate, suggesting it be spent on such things as education.

The National Center for Public Policy and Higher Education said Nevada ranks 39th in the nation for high school graduation rates in 2002. The state was last for high school students going on to college. The center said Nevada had the second-worst dropout rate among college freshmen.

The national magazine Education Week said earlier this month Nevada was 48th in overall education spending for the public schools in the 2001-2002 school year.

There are some who have criticized selling the $100 million bond issue, saying that the extra cash should be used to financially prop up the Millennium Scholarship program, rather than repaying the bonds over a 20-year period that would mean an outlay of $46 million in interest payments.

The governor is high on Nevada's economic growth, saying "It's been phenomenal during the last two years." The "Big Six" casinos that account for more than 80 percent of the gambling play are enjoying an average increase of 40 percent on their earnings, the governor said.

"I don't believe any hotel person would have told them there would be a 40 percent growth in profits," he said.

"We're leading the nation in job creations; we're the No. 2 pick of CEOs as a great place to go. We've been right there with manufacturing growth," he said.

The state has been enjoying double-digit increases in some tax collections. Guinn noted the Economic Forum, which predicts the tax revenue, estimated that tax collections for next fiscal year would grow by 5.8 percent and then by 6.1 percent in fiscal year 2007. He said the double-digit growth can't continue on top of double-digit growth.

His budget and suggestions are a "fair, equal distribution," the governor said. "Now they have to go through an examination" by legislators, citizen groups and others.

"Nobody has put up a plan that gets that kind of scrutiny," he said.

"I can't wait until Monday night," the governor said, adding that the next six months will set the tone for Nevada's future on housing, health care, corrections and education.