Wednesday, December 04, 2002
Copyright © Las Vegas Review-Journal

Assembly speaker criticizes chamber over opposition to new tax

Richard Perkins The Assembly speaker has not decided what tax increases he will support

CARSON CITY -- Assembly Speaker Richard Perkins criticized the Las Vegas Chamber of Commerce on Tuesday for its opposition to the proposed 0.25 percent gross receipts tax.

"The state of Nevada is flat broke and in desperate need of new revenue to maintain existing funding levels," said Perkins, D-Henderson. "They are declaring themselves unable and unwilling to help cure the problem they helped create."

He said he has not decided what tax increases he will support during the legislative session, which starts Feb. 3, but he said that the state is suffering a $700 million to $800 million budget shortfall and that all tax proposals should be on the table.

He backs Gov. Kenny Guinn's efforts to raise additional revenue for education, public safety, senior citizen services and other programs. By working together without partisanship, Perkins said, lawmakers can devise tax proposals to provide the necessary revenue throughout the decade.

"At some point we have to sit down and ask folks, 'What kind of Nevada do you want 10 years from now?' " said Perkins in a telephone news conference. "I am not advocating any specific taxes. But we shouldn't be dictated to by folks 60 days prior to the session what we can and cannot tax."

He said chamber leaders told him they would devise a solution to the state's revenue problems at the 2001 Legislature, and he intends to hold them to the promise.

Chamber President Kara Kelly said her organization has honored its commitment.

"We are now supporting $400 million in new tax revenue over the next biennium, and for the speaker to suggest we are not honoring our commitment is ludicrous," she said.

She said the chamber made its commitment to the speaker 18 months ago, when the deficit was thought to be about $80 million a year.

"We came up with other tax proposals that we consider more reasonable than the gross receipts tax," she said.

The chamber announced Nov. 20 that its members supported increasing property taxes, broadening the sales tax base, starting an amusements tax and increasing corporate filling fees.

Instead of the gross receipts tax, the organization favors increasing the $100-a-year business license tax paid by companies for each full-time employee.

The gross receipts tax was the centerpiece of the Governor's Task Force on Tax Policy recommendations, which call for more than $850 million in tax increases in 2003-05. The tax would be collected on all income earned by companies, regardless of whether they are profitable. The first $350,000 grossed by a company would be exempt.

The tax is expected to raise about $227 million in its first year. The task force suggested the tax should be levied starting in 2004-05.

Kelly said the chamber backed all of the task force proposals except for the gross receipts taxes. She said the tax has proved to be burdensome in Washington state, where different tax rates are charged for different businesses.

"It is an unfair tax," she said. "It hits businesses unfairly."

For example, the tax would be equivalent to 32 percent of the net profits of one retail business in Clark County, Kelly said, while equivalent to 8 percent of the profits of another retailer.

Guinn has raised questions about the gross receipts tax and has said it might be unfair for auto, grocery and real estate sales.

Perkins said he wants to "shield the average taxpayer." He said big business should pay, and the gross receipts tax may be the vehicle by which they will pay.

"I would rather have a big movie theater pay a small fee than tax the moviegoer," he said.

He said Dillard's at the Fashion Show mall in Las Vegas makes more profit than any of its stores in the world, and "they pay a tax in every state but us."

"I am not sitting here and advocating a gross receipts tax," the speaker said. "There are inequities in every tax. But don't tell us what we can and cannot talk about."

Kelly said every politician should know businesses pass all taxes onto their customers.

Perkins said room exists in state government for "cutting things," but he said critical services in the state have been "cut into the bone."

Perkins said he opposes ending the state's class-size reduction program, which will cost the state an additional $225 million over the next two years.

Also, he said he opposes reducing retirement and health care benefits for state workers.