Tough times ahead for Nevada Legislature
February 3, 2003
Today begins a four-month odyssey for the Nevada Legislature that will undoubtedly test the nerves of the 63-member body as it contemplates what to do with a Republican governor who sounds a lot like a Democrat.
Two months after being elected to his second term, Gov. Kenny Guinn last month in his State of the State address called for $1 billion in tax increases.
Guinn may have gotten a sense that night of what is to come this spring. It was a mostly silent auditorium as he outlined his plans for his $4.89 billion two-year budget. Even though his party has the majority in the Senate at 13-8, the Democrats control the Assembly 23-19. A two-thirds majority is needed to pass a tax hike.
Tax increases are seldom greeted with applause, and seldom proposed by Republicans.
Nevada, as with its neighbor to the West, is in a world of financial hurt. Guinn wants to hike taxes to offset the more than $700 million shortfall. The remaining $300 million would mostly be spent on increases for education and social services.
If lawmakers do not want to raise taxes, then it is incumbent upon them to come up with viable alternatives.
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Sin taxes — money assessed to cigarettes, alcohol and entertainment — will likely go up first. These items are always the easiest to tax because people see these as luxury items and not something every person partakes in. It is a credible starting point.
Nonetheless, all Nevadans are bound to feel the effects of the tax increases assuming they are approved. Nevada has often relied on gaming taxes to fill its coffers. It is time the pain be spread around. These are tough economic times that call for tough decisions.
Guinn went so far as to say it would be “political cowardice” if lawmakers vote down his tax proposal — which would be the biggest tax hike in Nevada history.
Guinn appears to have his priorities in the right place. He proposes raising the average daily attendance rate the state pays per student to school districts by $300 to bring it to $4,291 by 2005.
His education spending would include funding to provide all-day kindergarten for most schools, bonuses for some teachers and modest pay raises.
It will be businesses that will feel the pinch with the governor’s $300 hiring tax. One of the reasons people set up shop in Nevada is because of all the tax breaks. When businesses start complaining about the governor’s proposals, they need to remember they have been getting a break compared to having headquarters in other states.
As for the individual, Nevada workers do not pay state income tax. They should feel fortunate there are not plans at this time to change the status quo.
Nevadans have had it good for a number of years. The good times are over and it is time to be more realistic. A diversified economy, with a variety of revenue sources is the only way Nevada is going to be solvent. It is time for everyone to feel the financial belt tighten.
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