Gov's office: Nevada lawmakers endangering state with tax delays

CARSON CITY, Nev. (AP) -- A go-slow approach by Nevada lawmakers to Gov. Kenny Guinn's plan for a $75 million, short-term tax fix was described Wednesday as dangerous "Russian roulette" by Guinn's chief of staff.

Guinn wanted the short-term plan approved by mid-March so that the increased tax collections could be made in the April-June quarter. But key lawmakers say there's not enough support for the proposal.

"I think that if there is war, if we did go into Iraq, that would probably change the (legislators') sense of urgency -- I would hope," Guinn staff chief Marybel Batjer said.

"We're hopeful of peace. But the governor is very concerned that our budget is extremely vulnerable in the event of war or, God forbid, any kind of terrorist attack that would interrupt peoples' desire to travel to our state," she said.

"We've laid out our case (for higher taxes). If people want to play Russian roulette with our governmental services, that's a dangerous thing to do."

Guinn said Tuesday at a state Board of Examiners meeting that he didn't expect legislators to vote on his short-term plan until a U.S. war against Iraq starts.

The Republican governor has warned that he'd have to make massive cuts in state and public school budgets if the new money isn't available and if a war causes tourism to fall off in Nevada.

Under SB219 and AB204, cigarette taxes would immediately triple to $1.05 a pack; liquor taxes would nearly double; and a state tax paid by businesses would triple to $300 per full-time employee per year.

The short-term plan is part of an overall $1 billion plan being pushed by Guinn to reduce a growing deficit and allow for some needed expansion in state services.

The Senate version of the governor's long-term plan, SB238, was presented Tuesday to the Senate Taxation Committee on Tuesday by Mike Hillerby, Guinn's deputy chief of staff.

During the hearing, Sen. Bob Coffin, D-Las Vegas, backed much of the governor's proposal. But he said Wednesday he's not in full support of the plan.

"I sit on Finance (committee), I know we need money," Coffin said. "I'm going to vote for a lot of taxes."

After the hearing, Sen. Ann O'Connell held up three pages of handwritten questions for Guinn's budget staff. "I've got lots of questions," said O'Connell, R-Las Vegas. "This is definitely a moving target."

Senate Taxation Chairman Mike McGinness, R-Fallon, and Assembly Taxation Chairman David Parks, D-Las Vegas, both said there's inadequate support to pass the short-term tax plan. Any tax bill needs a two-thirds majority to pass both the Assembly and Senate.

The long-term plan includes a gross receipts tax on businesses with over $450,000 in yearly revenues, a property tax increase and other major changes.

The gross receipts tax -- which would be new to Nevada -- has generated the most opposition from business lobbyists and in public testimony on the bills.

The $300 per-employee business license fee in the short-term tax plan would drop to $80 once the proposed gross receipts tax takes effect in mid-2005.

Guinn's overall tax plan is designed to fill a budget hole that could be more than $700 million. In addition, the plan would allow for some program upgrades in the coming two fiscal years to meet demands caused by population growth.