Proposal calls for average rebate of $144

Friday, June 3, 2005 | 11:06 a.m.

CARSON CITY -- Many Nevadans are expecting a $300 check if the Legislature approves Gov. Kenny Guinn's plan for a $300 million tax rebate. Many will be disappointed.

The Senate Finance Committee on Thursday approved Guinn's plan to send money back to car owners with the average rebate at $144.

Senate Majority Leader Bill Raggio, R-Reno, said all of the calls he receives are from people who wonder when they are going to get their $300 check. That amount is the maximum someone could receive.

Raggio distributed a study of the Guinn plan to his Senate Finance Committee on Thursday, showing the average rebate would be about $144 per vehicle. The sheet shows that owners of 926,248 vehicles will receive checks for $75 or less.

The perception, he said, is that everybody feels they will get a $300 rebate.

Sen. Bob Coffin, D-Las Vegas, asked Guinn's chief of staff, Michael Hillerby, "Haven't we built up expectations too high?"

"Expectations are hard to control," Hillerby replied. He said press coverage of the rebate can't be retracted.

Coffin compared Guinn's proposed rebate to the tax reform plan of President Bush. He said 98 percent of the people in his district will not get the maximum rebate.

"How will we face them? They may throw rocks through my windows," Coffin said.

Guinn proposed the $300 million rebate plan to return some of state's surplus that ballooned to higher-than-expected tax revenue from an improved economy. The governor believes rebating vehicle registration fees is a good way to do that.

Nevada residents who paid more than $300 to register a vehicle will receive a $300 rebate. Of the 2.1 million vehicles registered last year, 379,404 owners would receive the maximum $300.

Senate Minority Leader Dina Titus, D-Las Vegas, expressed concern for those who don't own vehicles and would not receive anything. She proposed setting aside a small amount of the $300 million so those people could apply.

Titus suggested giving non-car owners six months to apply for a tax rebate. She said she realized the governor wants to do something for business, but it would be better to spread the rebate around. She suggested a $50 rebate on a first-come-first-served basis.

But Sen. Barbara Cegavske, R-Las Vegas, said handling a $50 rebate would be a "nightmare" for the DMV and said a person who lived only one day in Nevada would be eligible for a rebate.

Titus responded that someone who bought a car on the last day of 2004 would also get a rebate.

The Titus plan lost on a 4-3 vote along party lines.

Under the Raggio study, the largest group who would get the rebate is those who paid $50 to $75 in registration fees. Those owners of 643,939 vehicles would get an average rebate of $41.72.

Another question remains about the Guinn plan. Will people have to pay federal income taxes on the rebates?

Keith Munro, the governor's legal advisor, said those who itemized their tax returns and took deductions for vehicle registration would be subject to the tax.

The committee voted down Senate Bill 366, which would have given a $100 credit to a car owner on payment of the registration and other fees this year. It was a 4-3 vote against the plan also.

The Senate committee voted 6-1 in favor of the Guinn proposal in Senate Bill 519 and sent it to the floor of the Senate for a vote either today or Saturday.