Higher taxes, other steps urged to improve Nevadans' lives

CARSON CITY -- A study group appointed by state legislators proposes to increase taxes and take other steps to bring changes to state government that will create a higher quality of life for Nevadans over the next 20 years.

The 20-member Nevada Vision Stakeholders Group, in a just-released report, also wants Nevada to secure more federal money in coming years and strive to bring greater diversity to an economy now largely based on the tourism and mining industries.

Also, it calls for constructing an interstate highway between Phoenix and Las Vegas and high-speed rail systems between Southern Nevada and Southern California and between Reno and Las Vegas.

"Despite current tight state and local budgets, now is the time to implement the structural changes and investments that Nevada needs to change its course, lest the obstacles that it faces become insurmountable in the years ahead," the group's draft study said.

The recommendations will be discussed and could be changed or adopted when the group meets Friday.

The preliminary report offers hundreds of goals by the Stakeholders Group but few specifics on how to reach them. The legislation creating the group called for members to recommend goals for Nevada's future but left it up to legislators to figure out how to change taxes and implement the goals.

Gov. Jim Gibbons gave a quick thumbs-down response Tuesday to the recommendation that Nevada needs to change its tax base to secure more money to achieve a better future.

"You surprised?" scoffed Gibbons, who vetoed a bill last year to allow the Legislature to spend money to hire a consulting firm that would review Nevada's revenue sources and work with a citizens group to create a plan to build a better state over the next 20 years.

He predicted at the time that the group would propose tax increases and said he would not support any tax hikes during a recession.

Republicans Brian Sandoval and Mike Montandon, who are trying to defeat Gibbons in the June 8 primary election, have pledged not to increase any taxes or to reauthorize $800 million in existing taxes that expire next year.

Democratic governor candidate Rory Reid has not announced his final position on taxes, but his spokesman said Tuesday he will look at the recommendations. Reid has said he will present a budget plan for 2011 before the November general election.

Rebuffed by Gibbons, legislators used their own contingency funds to hire Moody's Analytics for $253,000 to conduct the tax study and to work with the Stakeholders Group to develop their vision of a future Nevada.

State Senate Majority Leader Steven Horsford, D-Las Vegas, who sought the tax study and creation of the Stakeholders Group, could not be reached for comment Tuesday.

Horsford has predicted state revenues in 2011 will be more than $3 billion less than what is needed to fund government at the pre-recession levels. He has said finding a broad-based revenue plan to fund schools and government properly will be the No. 1 issue facing the 2011 Legislature.

A preliminary report by Moody's Analytics is set for release by June 3. It looks at the state tax structure and whether it can sustain Nevada.

Sure to get a lot of attention in Friday's meeting of the Vision Stakeholders Group is the recommendation to "stabilize government program funding levels by diversifying the tax base, using alternatives to the general fund to support public investments, expanding rainy-day funds and securitizing future revenue streams."

Gibbons said any increase in taxes will scare away businesses that might be seeking to relocate in the state.

"These companies already are bypassing Nevada because of the uncertainty about our future tax structure," Gibbons said. "It is affecting our ability to recruit businesses."

The study also proposes to improve Nevadans' health by reducing the smoking and obesity rates, getting more children immunized and insured, and increasing the number of people who exercise. But it does not explain how to achieve the goals.

One group member, Douglas Busselman, executive vice president of the Nevada Farm Bureau, issued a denunciation of the draft report.

"At this point, the quality of 'vision' is very questionable to at least one of the group who I have the ability to speak for (myself). My view is that this document at this point is an extremely disjointed set of politically correct concepts thrown at the wall in hopes that something might stick and be included in a government-centric outcome."

Busselman said the draft report has the Vision Stakeholders' name on it, but it really is the perspective of the Moody's consultant. Busselman said the report "could easily join the stack of other political cover studies" that draw dust on shelves in libraries.

Donald Snyder, a group member representing the Smith Center for the Performing Arts, acknowledged that "the devil will be in the details" and "there are not a lot of details in the recommendations."

But he said the report clearly shows the extreme lack of diversity in the state economy and the need to find a taxing system that works today, not one drawn up more than 30 years ago.

"If we can't change in the current economic climate, then shame on us," Snyder said.

While "securitizing of future revenue streams" can mean the state should take a large sum of money upfront by selling off assets or the right to future taxes, Snyder said the group never discussed that idea. Members instead are talking about finding a more "secure" source of taxes not subject to periodic fluctuations, he said.

Snyder said that the state's tourism-based economy might not rebound to another boom period for 10 years or 20 years and that a more reliable way to raise adequate revenue must be found. The state needs to attract more green-energy companies and new technology-based firms, he added.

"We can't save our way to prosperity or tax our way to prosperity," Snyder said. "We need to be substantially different in the future. We have to set aside our political differences. What we are doing now is not good or going to get us to a better place."

Members of the Vision Stakeholders Group were named by a 16-member, Democrat-controlled legislative committee. Democrats hold a 28-14 advantage in the Assembly and a 12-9 lead in the Senate.

Other Stakeholder Group members include Peter Bernhard, a Las Vegas lawyer and head of the Nevada Gaming Commission; Alan Feldman, the vice president and spokesman for MGM Mirage Inc.; Keith Smith of Boyd Gaming; and Robert Lang, the non-voting chairman, a sociology professor at the University of Nevada, Las Vegas.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 702-687-3901.

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Comments

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1. NVRepub May 14, 2010 | 12:11 a.m. Report Abuse

   Please stop feeding the fairy tale telling troll named Patrick. Then again, he is highly entertaining... LOL

2. NVRepub May 14, 2010 | 12:09 a.m. Report Abuse

   Everyone please stop feeding the fairy tale telling troll named Patrick.

3. EL CHOLO May 13, 2010 | 4:03 p.m. Report Abuse

   we should start taxing all those freeway offramp beggers.

4. patrick May 13, 2010 | 9:01 a.m. Report Abuse

   Fairy:
   
   Economic laws are economic laws and what I said was 100% correct; and again it cannot be logically refuted as you illustrated.
   
   The point really is that if the business owner tries, in certain economic conditions, to pass on all increased costs to their customers they will actually be DECREASING their own profit.
   
   It is likewise true that in the event a business owner passes on only part of their cost increase, that they may also experience a reduced PROFIT MARGIN, but THERE is where the problem for business owners comes in and is PRECISELY the reason why business OWNERS object to paying taxes; it means less money in THEIR pocket.
   
   So, as I said, a business owner currently earning 15% profit on their product, may, after a tax increase, be forced to reduce their own profit margin by say 5%, but they WILL NOT be able to pass the increased cost on to their customers.
   
   Furthermore, economic laws also preclude the business owner from reducing staff, or reducing salaries because reducing staff will only lead to lower revenues and thereby lower profits than the owner previously earned.
   
   The business owner, if he is rational will merely decide, under some economic circumstances, to bite the bullet and cut their own profit margin.
   
   That's just the way it SHOULD be sometimes.

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