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Legislature: Nevada delivered balanced budget as taxes stayed same
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MIKE JOHNSON/LAS VEGAS REVIEW-JOURNAL
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Updated: Jul. 2, 2011 | 7:54 a.m.
CARSON CITY -- Ahh, July 1. The glorious day when a handful of taxes would return to 2008 levels. Or so promised both Gov. Brian Sandoval and his defeated opponent, Rory Reid, during the last election.
But July 1 has come and gone, and the sales and business tax breaks they promised aren't happening.
There will be no 0.35 percentage point reduction in the sales tax rate.
The $200-a-year business license fee every business must pay isn't dropping back to $100.
And your employer still must pay a 1.17 percent payroll tax on your earnings.
Did you really think politicians were going to decrease taxes? But while your taxes aren't dropping, they're at least staying the same. Proposed tax increases never made it past the no-new-taxes governor's desk.
A tsunami hit state government on May 26. That day the state Supreme Court ruled that state government no longer could raid most local government and school district funds to balance its budget.
Within days of the decision, Sandoval and many legislators had broken their promises not to extend $620 million in taxes that were scheduled to expire at midnight on the last day of the fiscal year, which was Thursday. In the end, only 12 of the 63 legislators voted against extending those "sunset tax" increases for another two years.
So Nevadans will continue to pay an extra $70 in sales taxes on any new $20,000 pickup and $200 for the privilege of doing business in the Silver State.
Instead of paying $315 a year in payroll taxes on your $50,000 salary, your boss will pay $585.
Of course, Sandoval -- during the let's-see-who-can-smile-the-brightest news conference in which he and legislators announced their agreement on a $6.24 billion budget -- quickly emphasized that 70 percent of businesses won't pay any business taxes.
That sounds great, but how much will they really save?
The answer is a maximum $1,250, enough to buy a nice office computer or copy machine and still take the staff to McDonald's for lunch.
The agreement frees only the first $250,000 in payroll of any business from the payroll tax. That portion of a company's payroll previously had been taxed at a 0.5 percent rate.
STATE BUDGET DETAILS
The $6.24 billion general fund budget is about the same as the spending plan approved in 2009 over Gov. Jim Gibbons' veto.
But financial legerdemain was used to achieve the budget parity.
About $210 million in room taxes, used to balance the state budget in 2009, was given directly to schools as the Nevada State Education Association originally intended in an enabling petition, and no longer will be considered a general fund tax.
County school districts still must lay off some employees because of declining local revenue, although state support to education increases during this new fiscal year.
School districts this fall will receive state support that averages $5,263 per student. That compares with the $5,192 paid during the 2010-11 school year. And in the fall of 2012, state support climbs to $5,374 per student.
Public schools, under the new spending plan, will receive 37.6 percent of all state dollars. Higher education will be given 15.3 percent. That means nearly 53 percent of the $6.182 billion, two-year spending plan goes for education.
Human services -- welfare, Medicaid, mental health, foster children, etc. -- receive 31.3 percent of all state dollars. Public safety agencies, meaning the Nevada Highway Patrol, the Department of Corrections, and Parole and Probation, take 9.4 percent.
SPENDING LESS THAN AVAILABLE REVENUE
But unlike the federal government and California, Nevada legislators and the governor once again delivered a balanced budget. In fact, spending is expected to be $40 million less than the available revenue.
To get there, Nevada might have to borrow $155 million from an local government investment pool. That loan is built into the budget, but if the economy improves, the state might never tap into the fund.
The budget balances because of passage of two bills taking more money from specific industries also went into effect Friday.
About $16.6 million in unredeemed slot machine winnings now will flow into state coffers. Casinos used to collect this money, which represents thousands of winning slot tickets that patrons do not cash out.
State government also is reducing some of the deductions mining companies can take before figuring their net proceeds of minerals taxes. The change will bring in another $23.8 million for the state.
Of course, gold sold for $1,482.30 per ounce Thursday. Nevada mines produce nearly 80 percent of the nation's gold.
The industry successfully fought off proposals for a bigger tax increase, a movement that was supported by popular opinion but not by many lawmakers.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.
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Very good onetwo. What I find even more idiotic are the people who defiantly proclaim their right to "keep what they earn" without any regard for supporting the government that allowed them to earn in the first place. You can't maintain 1990's tax levels at a 2011 population levels. The infrastructure won't stand up. Great job for Governor Sandoval. He kept his "no tax increase" pledge. I hope he can live with the continued rise in unemployment that the no-tax increase bought. And once again, no politician will address the giant elephant in the room which is the harm that illegal immigration has brought to, not only our community, but every community in this country. Every state in this country. There are votes to garner after all. Until that's addressed, we'll face this problem again and again.
Communists are the utopians.
No more trickle down government!
Small government benefits everyone except those who leech off of government programs.
BIG Government is BIG business' best friend.
libertarians are such a joke with their utopian ideas. Yeah that's exactly right university is just grade 13-16 an extension of high school really nothing else comes out of college, just lazy kids postponing the entry to the workforce.(sarcasm). Why $200 mil why not a dollar and we each pave our own roads police our own streets dig a well for water, no need for SNWA, think of all the money we ll save. Lets move back to caves and revert to stone age. No need for education either keep the people uneducated and easy to manipulate not unlike Afghanistan. Ron Paul for president, notttttttt.
Dumb asses in this state who voye Republican, when will you people learn!!!
*Crickets*
The libertarians would have a 200 million annual budget for Nevada. Who benefits from a budget of such low taxes....the middle class and poor who frequently use government services...I think not....the wealthy and corporations would benefit greatly....they would hold all the power in this country (political and economic)....but of course that would TRICKLE down to us hard working folk....right?
In reading the posts, I can see I am not the only one who complains. Often times I think I may be crazy. Then I read the posts and realize I am in touch with reality. Certain posts make laugh and laugh. Thanks for the laughs. They make my day.
Rick LV thinks Sandoval is a conservative Republican!!! What a laugh!! If Sandoval is conservative, then Shelly Berkley is the most beautiful woman in NV! Can somebody give me a puke bag!!!!!!!!!!!
Maybe we should get Sara Palin here instead of dirty Harry Reid. She is the one who made the oil companies pay the state. What has harry Reid done other than be on the take from the unions and gaming. How did he amass 52 million as Senator on a Senators salary? Not by fighting for the common citizen.
We don't want tax cuts to create jobs.
We don't want tax hikes to create jobs.
We want low taxes to keep government small.
$200M would be sufficient to fund the necessary (constitutionally required) functions of our government for a biennium. Extant mining taxes plus a few weeks of retail sales taxes would be enough to cover it.
If socialists still want to charge mining firms high royalties in order to redistribute the money to residents at the end of the year, that would not be the worst thing in the world but it would still be a terrible idea. In short order there'd be some new huge, inefficient state bureaucracy set up to perform the (unconstitutional) Trust Management function. Royalties would begin to dry up as more and more friends and relatives were hired to administer it.
The small government solution is to make the federal government SELL OFF to the highest bidder the lands it's currently leasing to the natural resource firms. No more US Dept of Interior, no Nevada Dept of Mining Royalties, etc.
Get the government OUT of the property management business.