Las Vegas Sun

March 29, 2024

Nevada needs a superhero

Lawmakers seek a consultant to scrutinize state’s tax structure and save Nevada

Senate Majority Leader Steven Horsford

Senate Majority Leader Steven Horsford

Bill Raggio

Bill Raggio

Legislators have embarked on an ambitious endeavor — find someone who can figure out how to save Nevada.

Lawmakers have issued a request for a consultant who will analyze the state’s tax structure, measure the public’s willingness to accept a broader tax base and examine the balance between local and state revenue.

It’s an exercise state leaders repeat every couple of decades and one that has rarely resulted in radical change in how Nevada raises tax revenue. But legislators insist this study will be different because the mission will go beyond the state’s finances and include finding ways to improve Nevada’s dismal rankings in quality-of-life measures such as health care, education, public safety and job creation.

“We need a vision and strategic plan for what kind of state we want this to be,” Senate Majority Leader Steven Horsford said.

The consultant will be asked to compile and analyze Nevada’s rankings in a host of quality-of-life areas, plan ways to advance Nevada’s standing in those measures and set goals for progress in 5-year, 10-year and 20-year increments.

The consultant will work with a group of “vision stakeholders,” who will be appointed by a legislative subcommittee.

The Interim Finance Committee approved final language for proposals from consultants this week. The contract will run from Dec. 1 through Oct. 1, including a report to the committee by July 1.

The study, and its anticipated recommendations on taxes, is likely to shape the political debate through the next legislative session. The proposal soliciting bids instructs the consultant to study how taxes are allocated between the state and local government and to analyze the relative stability of revenue.

The Legislature passed about $1 billion in new taxes to meet the budget shortfall over the next two years. But most of the new taxes will sunset in 2011, when the Legislature next meets.

Horsford said that with the new taxes scheduled to sunset and no federal stimulus to cushion the upcoming budget, legislators will confront a $2 billion shortfall.

“We must show leadership and we have a moral responsibility to come prepared with a plan,” Horsford said.

Senate Minority Leader Bill Raggio, R-Reno, has said the state needs a third-party, unbiased study.

Democratic leadership and some business allies — led by the gaming industry — are expected to push next session to broaden the state’s tax structure, which critics say is overly reliant on sales and gaming taxes.

Horsford tried unsuccessfully last session to push for some kind of corporate income tax. He won’t commit to supporting any one idea at this point, but he said the need to change the tax system is evident.

“We absolutely have to fundamentally change our revenue structure to have one that works, in good economic times and bad economic times,” Horsford said.

Raggio has emphasized the need to look at property tax revenue, which mostly goes to local governments, a sign that the state is likely to once again raid local government coffers.

The ambition of the consultant’s mission has some voicing skepticism over whether anyone will be willing to take the job. Though legislators did not mention a dollar figure, earlier estimates were that $500,000 should be set aside for the study.

“Given the breadth of the charge, not only looking at the revenue side but looking at Nevada’s quality of life, I don’t know if that can be done in six months,” said Sen. Randolph Townsend, R-Reno. “I’m very skeptical anyone will be willing to take it on for that amount of money in that short of time. But we’re going to give it a try.”

He noted that past studies of the state’s tax structure have a consistent theme: The state is too reliant on sales and gaming taxes, which can be volatile.

“I’d be surprised if those themes were different in any new studies,” he said.

Townsend, who because of term limits has served in his last legislative session, said, “there are significant challenges for the next group, perhaps the most I’ve seen in 30 years.”

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