Senators hear early morning testimony on tax bill

By David McGrath Schwartz

Wednesday, May 20, 2009 | 6:40 a.m.

CARSON CITY - The $781 million tax package was heard by all Nevada senators in a hearing that stretched into the opening minutes of Wednesday morning.

Nevada's major industries testified on the Senate tax bill, which would increase the payroll tax, business license fee, vehicle registration fee and sales tax.

MGM Mirage, the state's largest employer, was first up to testify on the bill.

"We can't rely on budget cuts alone to work our way out of this," Alan Feldman, senior vice president of public affairs, told the Senate, meeting as a committee of the whole. "We believe you have come up with package of fair, broad-based revenue enhancements to meet the needs of Nevada at this time."

Other representatives of gaming and other Nevada businesses were more circumspect, saying that while they saw the need for new revenue, they still wanted to see reforms to public employee pensions and retiree health benefits.

Gina Polovina, vice president of government affairs for Boyd Gaming, said, "We support a tax package. Revenue enhancements are justifiable, accompanied by cuts to spending and reforms" to the Public Employee Benefits Program (retiree health benefits) and Public Employee Retirement System (pensions).

Senate Majority Leader Steven Horsford, D-Las Vegas, said that compared to keeping government services at levels approved in 2007, the Legislature has cut more than $1 billion in spending.

Senate Minority Leader Bill Raggio, R-Reno, said he still wanted a tax increase to sunset.

"Obviously we have to do this. We have to fund what we termed essential services," he said. "We have made major cuts from existing budgets. In our - at least my opinion - the budget is not one with a lot of frills. It's one that funds essential services."

He said his support of the bill is "predicated ... That the taxes would sunset at the end of this biennium."

He specifically mentioned the payroll tax and increase of business license fees.

Reno-Sparks Chamber of Commerce lobbyist Trey Abney said he could not support a tax increase because reforms to public employee benefits haven't emerged yet.

Steve Hill, chairman of the Greater Las Vegas Chamber of Commerce, said he had no problems with the tax components of the bill.

"We understand new revenue will have to be a part of the solution this session," he said. "That being said, we hope the solutions for the long term, the solutions to PERS and PEBP and collective bargaining are also addressed."

He said the state's unfunded liability for those benefits is $11 billion.

While they reached agreement Tuesday night over a revenue plan, Republicans and Democrats are still fighting over those reforms for public employees.