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May. 07, 2008
Copyright © Las Vegas Review-Journal

Poll: Nevada businesses say no new taxes

By JENNIFER ROBISON
REVIEW-JOURNAL

Nevada's business owners have hardened their stance against fresh taxes in recent months, a poll shows.

The Nevada chapter of the National Federation for Independent Business reported on Tuesday that 97 percent of the members it surveyed said they oppose a corporate income tax or other broad-based levy, such as a gross-receipts tax. Less than 1 percent said they liked the idea, and 2 percent were undecided.

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    • The results reveal greater resistance to corporate taxes than a Review-Journal survey found in December, and they point to a looming battle between business advocates and those looking to stanch $914 million in cuts to Nevada's two-year operating budget.

    At the end of 2007, 64.9 percent of respondents to a Review-Journal poll said they wouldn't support a broad increase in business taxes, even if the funds went to education, while 31.5 percent said they'd champion such a tax.

    The difference in results could come partly from varying samples.

    The business federation interviewed only its members, while the Review-Journal surveyed local business people who subscribed to its push e-mail service, or who belonged to several other trade groups.

    But Cheryl Blomstrom, director of the federation's Nevada chapter, said the drop in support probably also comes from a sustained dip in economic indicators such as housing prices and taxable sales. Tougher economic times have left many businesses with smaller incomes, and additional expenses such as higher taxes could push some companies out of profitability altogether, she said.

    "They are the gatherers of taxes, and taxes negatively affect their livelihoods and the livelihoods of their employees," Blomstrom said. "Our average member's size is eight employees. Higher taxes could mean one of those employees is gone, or everybody works fewer hours, or they lose their health care coverage."

    Launce Rake, a spokesman for the Progressive Leadership Alliance of Nevada, a coalition of groups representing working Nevadans, called Blomstrom's concerns "absolutely legitimate."

    But that doesn't mean a broad-based corporate tax shouldn't be part of a discussion identifying potential new revenue streams, Rake said.

    "Every business in this community has an investment in making this community successful," Rake said. "They have an investment in schools that work and that provide productive citizens as employees and consumers. They have an investment in a government that serves minimal, essential human needs and provides for the physical infrastructure as well."

    Rake said the state's "catch-as-catch-can" approach to taxation has resulted in a patchwork of levies failing to cover Nevada's greater needs. It's also already led to some taxes that could hit smaller businesses especially hard -- for example, the 0.63 percent gross-payroll tax imposed in 2003 as part of $833 million in new fees, he said.

    Officials should consider what sectors could contribute more to the state's revenue picture, perhaps extracting more revenue from mining, or tapping dollars from major retailers who do business in Nevada but don't pay corporate-income taxes here, he said.

    A "broad-based" tax, whether corporate or personal, would bring in revenue from multiple sources, and that means such a levy would also better withstand the ups and downs of the economy, Rake continued.

    For the record, state members of the National Federation of Independent Business also shot down a personal income tax by a 97 percent margin.

    Rather than finding new revenue sources, Blomstrom said, her group would like to see a "comprehensive review" of how Nevada spends existing taxes.

    Gov. Jim Gibbons is assembling the 12-member Nevada Savings and Government Efficiency Commission to streamline operations and maximize tax dollars.

    Businesses and consumers across the state are evaluating their expenses for areas to slash, and government should follow that lead, she said.

    That's a message Blomstrom said Nevadans could hear more in coming months, as November's statewide and national elections draw near and the 2009 Legislature prepares for its February start. Blomstrom was in Las Vegas this week, meeting with representatives of other nongaming trade groups to talk about coalition-building and voter education, and chatting with fiscally conservative politicians.

    She said "some hurt feelings" linger five years after 2003, when gaming operators promoted a 0.25 percent tax on gross receipts for all businesses. Nongaming companies and trade groups successfully fought the proposal, and some major leisure companies subsequently dropped out of chambers of commerce and launched their own associations.

    Now, with the state teachers union seeking via a ballot initiative to raise the gaming tax from 6.75 percent to 9.75 percent to boost school funding, some high-profile gaming executives have renewed calls for a broad-based business tax.

    Terry Lanni, chairman and chief executive officer of MGM Mirage, and Keith Smith, president of Boyd Gaming Corp., both said in November 2007 that long-term fiscal stability requires far-reaching levies on all segments of the economy.

    Representatives of the Nevada Resort Association didn't return a call by press time to discuss whether the organization would formally seek a corporate income tax in coming months.

    Blomstrom said she's hoping to avoid a repeat of 2003's battle. She's focusing for now on both gamers' and nongamers' opposition to "governing by initiative." She said her federation might even be willing to help gaming groups fight the teachers' referendum.

    "We can't have a healthy public sector or charitable sector without a healthy private sector first," she said.

    Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.

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    UNLVStud wrote on May 07, 2008 06:26 PM: Hey The Hope. I agree with you that people are hurting now and individuals should not have any tax increases on them. In fact, a tax break is exactly what we need. We being people that make less than $100,000 a year.

    However, this argument needs to be focused on what businesses pay and to a greater extent our State's tax structure generally. A broad based business tax that can fund our services adequately is what is needed. Not a heavy increase in taxes in a single industry.

    Businesses are not investing in our community like they need to be. This tax would be an investment in our future. Something everyone could likely agree with. For instance developing a new educated work force will aid in bringing new high-tech businesses to Nevada. Solar is the wave of the future, but our State lacks the educated work force to have it thrive here.

    A frank discussion needs to be had and a result reached in a speedy and deliberate manner regarding taxes. Otherwise Nevada will continue to provide a stagnant or declining quality of life for all of us that live here.


    kayla wrote on May 07, 2008 05:49 PM: i hate lauren!!!!!!!!!!!!!!!!


    David wrote on May 07, 2008 12:30 PM: vote them all out of office in nov.


    To do otherwise would be granting carte blanch to continue careless spending with total disregard to cost effectiveness.


    moe wrote on May 07, 2008 11:29 AM: vote them all out of office in nov.


    Fafner wrote on May 07, 2008 10:26 AM: "the Review-Journal surveyed local business people who subscribed to its push e-mail service"

    Does this mean the R-J employed push-polling -- polls questions slanted so as to draw a predetermined answer (i.e., the infamous "Would you be less likely to vote for John McCain if you knew he'd fathered a black child out of wedlock?)?


    the hope wrote on May 07, 2008 10:08 AM: Hey UNLVstud...do you have any insight to the distribution of income or average wages in this state? The cost of living here is above the national average, and wages are not. I moved here over 2 years ago under the premise that 'there is no state income tax here, it's like getting a raise.' Only to find more expensive housing, food, car insurance and registration, utilities and public services. This state can't move forward because corporations and the larger employers (casinos) pay low wages. And when it comes to asking people to pay taxes for services they obviously need, they just can't afford it. Don't you think in these hard times it is insane to ask people to pay more taxes?


    UNLVStud wrote on May 07, 2008 09:22 AM: When you ask Nevadans if they want: a good education for their children, adequate health care, and suitable roads to drive on, the answer is always "YES!" Then you ask the community if they're willing to raise taxes to pay for it and the answer is always "Hell No!"

    This community has a psychological problem if they don't think taxes need to be raised to pay for these basic concerns. (Too bad there are inadequate mental health services to treat them.)

    We're on a backwards slide in this State due, in part, to the bad economy and Gov. No New Taxes.

    The community needs to wake up and pay their fair share so we can move forward in this State.


    fear and loathing wrote on May 07, 2008 07:17 AM: Of course Terry Lanni (and all his billionaire casino cronies) are going to say levy taxes across all business segments. We wouldn't want to burden the casinos by asking they contribute a fair share to the community. After all how could they afford to expand into other states and foreign lands if that happened? Well, that's a whole other debate.
    b is right, the governments need to clean up their act and stop wasting taxpayer money. I just wonder who the sellers are on some of these purchases b mentions? somebody's friend?


    ths wrote on May 07, 2008 07:14 AM: While there is wasted money in this state and local government without a doubt we need to look to broaden our tax basin. I hope these same business leaders of private community businesses do the same just cause for the gaming companies and not sign or vote for the teachers petition.

    Make the teachers accountable before you give them automatic raises. Don't increase the tax on the business that already brings in the greatest amount of taxes becuase they are an easy target.

    I don't work in the gaming industry, but I do understand the economics of all the different taxes they bring in and support in other avenues. We need to be careful thinking that there are no consequences for raising a tax by 44%.


    Helen Weils wrote on May 07, 2008 07:09 AM: It is an absolute crime the way these bureaucrats continually seek to take more money from businesses and individuals. I support our Governor in his quest to cut the fat and government employees should not be exempt.


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