Gaming, mining industries tell tax panel to look elsewhere - News

PRINT THIS Popular

Mar. 06, 2009
Copyright © Las Vegas Review-Journal

Gaming, mining industries tell tax panel to look elsewhere

By ED VOGEL
LAS VEGAS REVIEW-JOURNAL CAPITAL BUREAU

Nevada Legislature

CARSON CITY -- Gaming and mining leaders told legislators Thursday that their industries have been hard hit by the recession and cannot afford to be targeted for tax increases as a way to bail out state government.

They told a joint Senate-Assembly taxation committee that they would support a "broad-based" tax paid by all businesses, but not one paid by just a few.

Most Popular Stories

Obama dings Las Vegas — again

'YOU DON'T BLOW A BUNCH OF CASH IN VEGAS ...': Obama remark reopens wound

LAUGHLIN EDGEWATER: Two dead in casino car crash

NORM: Ad's Strip scenes raised eyebrows

Tourist describes chaos as car plows into Laughlin casino, killing two

NORM: $1 million wager on Super Bowl approved

IMAGES FROM 1860S: Photos show historic Nevada

Shutting down the Ritz

Fighter battles rare disease that shatters mixed martial arts dream

Former commander of USS Cole considers run against Reid

Business profits or income could be taxed, they said, or the current modified business tax could be increased. Nevada businesses now pay a 0.63 percent tax on each employee's wages.

The Progressive Leadership Alliance of Nevada, a consortium of 30 liberal-leaning organizations, said doubling the modified business tax would raise $279 million a year and that a 7 percent tax on businesses earning more than $100,000 a year, would fetch $200 million a year.

Taxation committee members made no decisions on new taxes at the hearing, the first called to let businesses, citizen groups and average citizens offer their suggestions on how to lift state government out of its financial difficulties.

"We are tightening our belt," said Assembly Taxation Chairwoman Kathy McClain, D-Las Vegas. "But all these services cost money. We don't have slushes in this budget."

After hearing business associations and others support tax increases, Assemblyman Tom Grady, R-Yerington, released a packet of headlines from newspapers over the past month showing how companies are laying off workers and suffering financial problems. He said he wanted to show that economic problems are affecting much more than state government.

Reno businesswoman Kim Bacchus testified if new taxes are imposed on business, then she and her husband will have to lay off some of their eight employees.

"What you are doing to me and our family is asking us to shoulder the state's inefficiency in spending. Please do us no harm," she said.

"All we have heard is how you need to raise taxes or increase revenue," added Wayne Smith, representing the conservative Nevada Action Coalition. "You are like a board of directors. You can decrease expenses."

But after hearing another witness call for spending cuts, not tax increases, an irritated Assemblywoman Ellen Koivisto, D-Las Vegas, asked:

"What elementary schools do you want us to close? What middle schools, what high schools should we close because there is no money?"

Even the Las Vegas Chamber of Commerce, the powerful Southern Nevada business lobby, has concluded that a tax increase of some sort is going to be needed to fund the next biennial budget. Steve Hill, the chamber's president, told the committee that the chamber would support such an increase as long as it is coupled with reforms to public employee retirement benefits.

"Without those reforms, we will find ourself right back in the situation we find ourselves in now, and without those reforms, we will not be able to support revenue increases that will prove to be nothing but a short-term fix," Hill said.

The reforms proposed by the chamber would mainly affect only new government hires, he said. "We do not think we should break the promises made to current employees," he said.

Hill didn't get more specific about what kind of tax increase the chamber would prefer to see.

In releasing his budget in January, Gov. Jim Gibbons proposed state general fund spending of $6.17 billion over the next two years, about 9 percent less than the biennial budget lawmakers approved two years ago.

The governor's budget has been condemned by many legislators, educators and state employee groups, particularly the 36 percent reduction in state support for higher education and 6 percent cuts in salaries for state employees, teachers and university professors.

Without the cuts, however, Gibbons said the state must lay off 10,000 workers or legislators increase taxes, options he opposes.

Democratic leaders have pledged to wait until a review of all state budgets is completed before they propose specific tax increases.

Some of the more troubling testimony during more the more than five-hour hearing came from Nevada Resort Association President Bill Bible.

Bible said most gaming companies have laid off employees and reduced contributions to employee benefit plans.

Some major resorts are on the verge of declaring bankruptcy, he added.

"These companies don't have a great deal of latitude in changing their business models. It is a perilous proposition to rely too heavily on one industry. Nearly half of the general fund revenue, directly or indirectly, comes from the gaming industry."

He added legislators should "apply maximum scrutiny to expenditures."

Still, Bible said the gaming industry would support a board-based business tax that applies to all businesses.

Tim Crowley, president of the Nevada Mining Association, said his industry employs only 12,000 people, but pays an average of $14,000 a year in taxes on each one.

But the industry does not object to a fair, broad-based business tax that applies to the "entire business community," he said.

In supporting a business profits tax, PLAN state director Bob Fulkerson showed newspaper advertisements for Walmart, Target and Best Buy.

The prices in the advertisements were identical, though the advertisements came from Michigan, Sacramento, Utah, Oregon and Nevada.

He said Walmart is selling items for the same price in Reno as in Sacramento, even thought there is nearly a 9 percent business tax in California and none in Nevada. The same is true for the other states, he added.

"Why don't we get a break in Nevada, where they pay nothing?" Fulkerson asked. "Where is our money going?"

Staff writer Molly Ball contributed to this report. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

Share & Save

Leave Your Comment	34 Reader Comments
Terms & Conditions The following comments are provided by readers and are the sole responsiblity of the authors. The reviewjournal.com does not review comments before publication nor guarantee their accuracy. By publishing a comment here you agree to abide by the comment policy. If you see a comment that violates the policy, please notify the web editor. Some comments may not display immediately due to an automatic filter. These comments will be reviewed within 48 hours. Please do not submit a comment more than once.
Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. ...Tarzan..Lord of the Jungle...King of the Apes... wrote on March 07, 2009 03:10 PM: . .. ...The crickets..?? What happened to the crickets...?? Ever Since Kenny Guinn sent the rainy day rebates back to the DMV people I don't hear no crickets. You gotta have rainy day funds.. the crickets love moisture.. ... No damp spots..no crickets. We gotta build up the rainy day fund if you want to hear crickets... Root of all Evil wrote on March 07, 2009 03:00 AM: There ought to be a law against taxation. mark wrote on March 06, 2009 09:53 PM: I can't beleive I only saw one post adressing a huge reason why we are in this burden. Let's cut off aid to illegals and anchor babies. The Constitution needs to be reexamined to end birthright citizenship. Would we have these problems if we weren't another country's welfare system? Not to this degree. Whatever wrote on March 06, 2009 07:25 PM: To jmc and everyone else who does not care about the people. Empower yourselves. It scares the companies to know that the employees actually do know something. They just want grunts to dig the holes or make the beds. Do not fall for their line of BS. These industries are going to try and scare the workers in this community and state. This is their tactic. Scare the people, keep everything for themselves, so that they do not have to do what is right. Stand up and fight for all of the people that make this town work. It is the people of this community that do all of the work. If we do not, they will soon be asking us to do more and more for less and less. This is already starting to happen. This way they will not have to pay those of us that actually make the companies function with the daily things that need to be done. Stand up people, stand up legislators. Do not fall for the scare tactics of the executives that live in those ridiculously over sized homes that they think they need. Remember, we are the ones that do the work. They are the ones that take the credit. Do not listen to those scare tactics like jmc likes to talk about. Tax them to pay us and support this town and state. to jmc wrote on March 06, 2009 05:35 PM: Does it matter? The workers in this community are tired of always watching them get away walking off with everything, while the people and community suffer. The big groups around here do not want to support the community. They do not want to pay for anything. They cry and whine just like you. Obviously I hit a nerve, because there is truth in the fact that they do not support the people that have moved here to support this community. Why do you think we rank last in every category from education, health, to crime? How the numbers are calculated really does not matter. Casinos and Mining do not pay their fair share no matter what you have to say. These companies get so many rebates and write-offs it is disgusting. We as individuals have to pay over 33% by the time you add it all up. I have no sympathy for these people that fly around in their private jets and live in houses that could sleep entire communities. They have no regard for me, therefore, I have not regard for them. I guess you want to live in an uneducated, dangerous, unhealthy city. Way to care for the people, the families they raise, and the community in which we live. I am really glad I do not know you. You would just throw me to the wolves anyway. BTW, I did not shoot my mouth off, I typed the words. Too_much_spending wrote on March 06, 2009 05:33 PM: Nevadans aren't paying the tax, tourist are! What kind of attitude is this? Our friends and relatives come here to visit. They rent cars, hotel rooms, buy show tickets, etc. Even if you don't have invited guests, what happened to the Biblical admonition to Love the stranger? Bastiat said: Government is that great fictitious entity whereby everyone thinks they live at the expense of everyone else. The price we pay for exporting our taxation is that when we go to Anaheim, they tax us right back. Too_much_spending wrote on March 06, 2009 05:17 PM: Nevada ranks 49th in per capita tax burden It's small comfort that, per capita, we have lower taxes and fewer public employees than Socialist states like NY and CA. The gold standard is Are we as good as we can be? Not even close. If we keep moving in the direction of CA, it's only a matter of time until we become politically indistinguishable from them. 100 years ago, CA had only 2M people. I want to see small government in my lifetime. The way we're going, my grandchildren won't even see it in theirs. If we can bring small government to Nevada, then Idaho will follow. Maybe then Wyoming, another mountain state, and New Hampshire for good measure; a 19-vote electoral block. That's like an Ohio, big enough to get noticed, and possibly change Texas. And if you can change Texas, you can change the USA. Ron Trank wrote on March 06, 2009 05:04 PM: Once again Patrick Gibbons, of NPRI thunk tank, is flat out misleading the readers! He works with the likes of ousted idiot Bob Beers! NPRI does not want you to know the truth! NEVADA residents are the least taxed citizens in the union (aside from alaska who get two checks)!!!! THERE ARE NO CORPORATE INCOME TAXES IN NEVADA!!!!!! Yes, TOURIST contribute to our tax base BUT saying we are 26th in tax collection is a MEANINGLESS RED HERRING!! Nevadans aren't paying the tax, tourist are! Remember, NPRI says that US military fighting men and women provide "nothing of value"!!!!!!!! Pauly wrote on March 06, 2009 04:57 PM: Bacchus as in Reno Nurologial Insitute? I agree, when the market is rising taxation is 'bad' becuase it takes away from 'capital' funding and jobs will be lost and when the market is bad, jobs will be lost. So, how do we pay ouor debts? KIT nails it! This is the cheapest state in the union with regards to local and state taxes! If it's too much for your mining company or gaming company (over leveraged bastards) MOVE! LEAVE! jcm wrote on March 06, 2009 03:58 PM: to whatever, gaming pays taxes on their REVENUE. other businesses pay taxes on their PROFIT. there is a hugh difference between these two words. before shooting your mouth off, you may want to learn what you are talking about. Read All Comments