ANALYSIS: LEGISLATURE:

Foot dragging on tax plan appears the astute course

Package of increases emerges with little time for opposition

By David McGrath Schwartz (contact)

Sunday, May 17, 2009 | 2 a.m.

Reader poll

Lawmakers talk revenue: Business tax plan gets hearing (5-14-2009)
Buckley pitches new tax plan to bridge revenue gap (5-14-2009)
County critical of Gibbons' plan to take property tax (5-12-2009)
As budget clock ticks, easy part still isn't done yet (5-12-2009)

Archive of Sun politics stories

Politics: The Early Line

CARSON CITY — Legislators’ strategy has from the beginning been to play hide the ball on taxes.

For months they have privately acknowledged that tax increases would be necessary to spare the state debilitating budget cuts.

Yet only recently did they say so publicly. And only last week did they unveil pieces of a tax plan.

(In addition to the previously revealed increase in a business payroll tax, they are higher annual vehicle registration fees; doubling of the business filing fee, from $100 to $200; and an increase in the sales tax of between a quarter-cent and a full cent.) (Related story: Plan would increase sales tax, vehicle registration)

A lack of transparency? Little public input? Perhaps.

But as a legislative strategy, it’s working.

Given the late day and compressed time line — only 15 days remain until the constitutionally mandated close of the session — it appears to be too late for serious opposition to gather and stop the plan. So say lobbyists and lawmakers from both sides of the aisle.

“It’s significantly harder for special interests to make major changes to the tax plan at this point,” said Mike Hillerby, former chief of staff for ex-Gov. Kenny Guinn. “They secured support from major business groups before rolling out their plan. The issue now is between lawmakers to change it. That’s the only way to derail it.”

Referring to the Legislature’s Democratic leadership, Republican lobbyist Robert Uithoven said: “They may have won.”

“They wanted to hide it while they paraded a constant stream of their core constituencies in front of committees, who begged them for a tax increase,” he said.

The strategy is drawn from lessons learned during the last major tax fight in the Nevada Legislature, in 2003.

During that session, Guinn and supporters of a gross receipts tax on business went to great lengths to detail the proposal and push for it early in the session.

Business interests had plenty of time to pick it apart. Eventually, an $836 million tax increased passed, but only after a marathon battle and without a gross receipts tax.

“The fight from six years ago is still fresh in everyone’s mind,” said one lobbyist speaking on condition of anonymity. “No one wants to lead with their chin.”

Speaker Barbara Buckley, D-Las Vegas, was cognizant of that as she laid out a deliberate — and ultimately unreliable — timetable on taxes and spending.

At a January news conference, Buckley and Senate Majority Leader Steven Horsford, D-Las Vegas, said lawmakers would have a spending plan by April 1. That wasn’t accomplished until Tuesday.

She originally promised they would unveil a tax plan by early May. Only now are lawmakers at that critical point, leaving little room for error.

Through a series of committee votes — almost all unanimous — Republican and Democratic legislators have agreed on a spending plan. The bipartisan votes deflate arguments by the state’s most conservative elements that additional tax revenue isn’t needed.

But the plan could still blow up. Republican legislators complained Saturday that while they are negotiating changes in pension and health benefits for public workers, Democrats have passed a bill that would give state workers collective bargaining on some noneconomic benefits.

“We’re trying to bring the fiscal horse back in the barn, and they’re trying to kick the doors open and stampede out the back door,” said Sen. Warren Hardy, R-Las Vegas. “There are ‘no’ votes in our caucus for taxes without serious reforms.”

Still there is, so far, no organized opposition to the tax increases.

At the first public meeting on the tax plan, Thursday evening, middle-aged men in expensive suits, representing the titans of Nevada industry, told lawmakers they were at the table to talk about taxes.

The opposition role was relegated to a clique of anti-tax throwback lobbyists. One opponent — a California lobbyist representing a national small business group — was literally booed from the testimony table.

The late timing means bold changes in the state’s tax structure, which many believe is too reliant on gaming and sales taxes, are unlikely. Assemblywoman Kathy McClain, D-Las Vegas and chairwoman of the Assembly Taxation Committee, said she was frustrated there won’t be enough time to fix the tax structure.

“All we’re doing here is a Band-Aid,” she said. “Hopefully we’ll have an interim study and make a real fix in 2011.”

Some raised questions about the details of the proposals, but there was still no opposition.

“Those who want to take close to a billion dollars out of the weakened, tattered economy may have won,” Uithoven said. “But it’s not over yet.”

Discussion: 17 comments so far…

By Future2012

5/17/09 at 5:59 a.m.

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"Still there is, so far, no organized opposition to the tax increases."

"They [the Democrats] wanted to hide it while they paraded a constant stream of their core constituencies in front of committees, who begged them for a tax increase."

"The strategy is drawn from lessons learned during the last major tax fight in the Nevada Legislature, in 2003."

Is this the kind of Legislators we want? To have a strategy has from the beginning been to play hide the ball [from Taxpayers]on taxes.

How can you organize against Legislator who have the power and are gaming the process?
By neiman1

5/17/09 at 7:52 a.m.

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No organized opposition. That's the problem. The desires of the taxpayer are not protected because they don't have an organized lobby. Why do citizens have to hire someone to protect them from the legislature. I thought that was the elected officials job. Quit helping us, we can't afford any more help.

Tax reciepts are down because the people are broke. Taking more in any way is not right. Live on what you have like people have to do. Quit taking jobs from the private sector to protect those on the government payroll
By LasVegas2009

5/17/09 at 8:32 a.m.

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Balance the budget you have not the one you would have if you taxed us more. Stop this talk of new taxes if anything in this environment lower taxes are in order.

Cut back on salaries, lay-off state employees, cut spending on welfare and social programs. Cut state spending on everything. Continue to cut until you reach a balanced budget. This is what all of us taxpayers have had to do in this environment. Live with in your means.

The well is dry and taxpayers dont have extra money to pay for social welfare programs and public education. Terminate all useless programs now!
By NevadaFive

5/17/09 at 9:13 a.m.

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Nevada lawmakers are like crazed teen-agers stabbing themselves to a bloody pulp in order to lose weight. A little tax here, a little fee hike there, just a tiny increase in the sales tax, etc., - and soon enough it adds up to a real tax increase. Enough already! And enough of proposing restructuring government to run like a business - it doesn't!!!

Since gaming intends to remain virtually tax-free and mining is squatting in the same corner, we (the people) have little choice but to implement some sort of graduated state income tax - at least on households above $40K. (Throw in a 'sunset' provision - we can try, right?)

Additional sales taxes are regressive and harm the lower wage-earner. Raising 'sin taxes' sure sounds great as most of us don't smoke or drink. However, it remains regressive and attacks the lower wage-earner. I can offer no set formula - but it appears a state income tax is a necessary step for Nevada.

Has anyone found the bill draft - or even an actual bill that lowers Nevada constitutional officials (governor, Lt. gov, atty general, etc.) salaries by 6%? I've looked everywhere and figure it must be buried someplace. I just know they want to do their part.
By Gregory

5/17/09 at 10:59 a.m.

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Sales taxes are by nature regressive, but an increase of one percent or more would be healthy.

Most hospitality workers eat at work, and there is reasonable competition among companies on food and supply costs, with Walmart, Costco, Albertsons and Vons-Safeway. Three outlet malls provide reasonable clothing prices for residents in Southern Nevada, along with Ross, Steinmart and Marshalls, among others.

A sales tax increase would create additional revenues for Nevadans from the top drawer clients who travel to Las Vegas and engage in boutique resort shopping on bigger ticket items, and would also make sure the residentially challenged residents who greet Nevadans regularly at traffic lights and store parking lots have to anty up a little more daily for their purchases from convenience and value stores.
By jfnance32

5/17/09 at 11:28 a.m.

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Hmmmm....radically raising taxes on employment?????

Does that make any sense for a state that has one of the highest unemployment rates in the country?

Surely, Buckley and the Democrats can come up with a better tax plan than that.
By travislv86

5/17/09 at 12:55 p.m.

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Not an economist, but jf, 1 percent is radical? So if your business profits 5,000,000, you pay 50 grand more (maybe) with this bill. I still think we should raise sales tax a full percent, and allow low income families to continue to pay 7.75 and the rest of us with money can pay 8.75. I agree that taxing businesses in not the best idea, but far from radical.
By LasVegas2009

5/17/09 at 1:44 p.m.

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travislv86: Explain to me as a retailer how I suppose to tell which person to charge which rate?
Your a dumb ass. So at McDonalds they are gonna look over your tax return and see which rate to charge?

What the government needs to do is manage the money they already get. If we give in and give them more they will just over spend again and be back for more.

Balance the budget by cutting services and salaries of overpaid workers.
By travislv86

5/17/09 at 2:05 p.m.

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Dumbass? That's a compound word!

I would set up a system that low income people could apply for if they fell into a certain income bracket. Yes, that would have to be established. They can carry a card for id purposes, or their tax info if you feel that is more efficient. Everyone says sales tax is regressive, so it would eliminate that aspect or targeting low income people. It would be up to the consumer to pursue. It is just thinking outside the box rather than not. You clearly cannot. So to solve your major dilemma, the workers at Mc D's, which you clearly are not qualified for, could hit one of two buttons that would lead to different totals- a 7.75 and an 8.75. You could even make them different colors. This may in fact be a terrible idea, but give me a decent reason, because yours (see below) took two seconds to solve.
Also, to help you out since you are anti-public education "your" and "you're" are not the same. Your, implies ownership, and you're is a contraction for "you are". There-- that didn't cost you a cent.
By LasVegas2009

5/17/09 at 2:15 p.m.

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So you would create another level another system that has to be supported by more workers and more money to maintain. Then you would issue cards? How many would end up on EBAY?

What would stop a person of means swinging by and picking up a person of low means on the way to the store to purchase something?

We don't need more government we need less!

What would stop a retailer from collecting the larger tax and then turning in the smaller tax?
You would have to create a whole system...more waste, more money. Do you think these ideas through or just pull them out of your AZZ??
By LasVegas2009

5/17/09 at 2:21 p.m.

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Better Idea:

Cut government spending.

Balance the budget.

Save the excess in growth years to cover the lean years.

Its what we all do at home, its simple and you would think the first thing to come to the minds of any normal person.
By travislv86

5/17/09 at 2:36 p.m.

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2009, for a guy that wants less government, you have no faith in people that are suppose to pick up the slack. I personally wouldn't do any of the things you listed, nor would people I associate with, maybe you hang around with a low quality group of people. Fear of huge government is understandable, but not to the extent you take it. If you could have your way you would:

1. Get rid of all public education
2. Reduce the amount of cops and firemen
3. Get rid of welfare
4. Strip government employees of their benefits and fire most of them
5. Get rid of public health care

This is the definition of a Third World County, a place where people are undereducated, no public safety, and no state funded health care. They could start doing commercials for Nevada. "For only the cost of a soda you could help a child in Nevada to a better life"""""".."

I wish this could actually happen so you could see the results of your ignorance.
By LasVegas2009

5/17/09 at 2:44 p.m.

Suggest removal

1. Get rid of all public education
2. Reduce the amount of cops and firemen
3. Get rid of welfare
4. Strip government employees of their benefits and fire most of them
5. Get rid of public health care

Yes
Yes
Yes
Yes
Yes

Now that would make everyone responsible for themselves. The way its suppose to be.
By Nevada_Scandalmonger

5/17/09 at 3:39 p.m.

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"The opposition role was relegated to a clique of anti-tax throwback lobbyists. One opponent -- a California lobbyist representing a national small business group -- was literally booed from the testimony table."

Looks like the only place for the "anti-tax throwback" NIPR crowd to vent is in these blog commentaries--or at those meetings in Minden and Winnemucca with the Guv.

Good luck with that, guys. Looks like that's working out real good for ya.
By nednougat

5/17/09 at 4:01 p.m.

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LV 2009 is the fool who says that people who go into foreclosure will be sued by the lenders, the government, and thrown into debtors prison. Yeh, 25,000 people in Clark County jail. He's simply a slave state redneck Dixiecrat. A dying breed. Not worth looking at any of his posts....
By jfnance32

5/17/09 at 5:10 p.m.

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"So if your business profits 5,000,000, you pay 50 grand more (maybe) with this bill"

It is NOT a tax on profits.

It is a tax on payroll.

So if a company that makes $5 million will pay the same tax as a company that loses $5 million.

It is based on the size of the company's payroll.

So it will encourage companies to reduce payroll.

You know the money that pays to you, your friends and family members if you or they work in the private sector.

Why are the Democrats so determine to discourage private sector job creation?
By Wolfdog

5/18/09 at 8:42 a.m.

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Close UMC so we can balance the budget.