Poll: Nevada businesses say no new taxes

Nevada's business owners have hardened their stance against fresh taxes in recent months, a poll shows.

The Nevada chapter of the National Federation for Independent Business reported on Tuesday that 97 percent of the members it surveyed said they oppose a corporate income tax or other broad-based levy, such as a gross-receipts tax. Less than 1 percent said they liked the idea, and 2 percent were undecided.

The results reveal greater resistance to corporate taxes than a Review-Journal survey found in December, and they point to a looming battle between business advocates and those looking to stanch $914 million in cuts to Nevada's two-year operating budget.

At the end of 2007, 64.9 percent of respondents to a Review-Journal poll said they wouldn't support a broad increase in business taxes, even if the funds went to education, while 31.5 percent said they'd champion such a tax.

The difference in results could come partly from varying samples.

The business federation interviewed only its members, while the Review-Journal surveyed local business people who subscribed to its push e-mail service, or who belonged to several other trade groups.

But Cheryl Blomstrom, director of the federation's Nevada chapter, said the drop in support probably also comes from a sustained dip in economic indicators such as housing prices and taxable sales. Tougher economic times have left many businesses with smaller incomes, and additional expenses such as higher taxes could push some companies out of profitability altogether, she said.

"They are the gatherers of taxes, and taxes negatively affect their livelihoods and the livelihoods of their employees," Blomstrom said. "Our average member's size is eight employees. Higher taxes could mean one of those employees is gone, or everybody works fewer hours, or they lose their health care coverage."

Launce Rake, a spokesman for the Progressive Leadership Alliance of Nevada, a coalition of groups representing working Nevadans, called Blomstrom's concerns "absolutely legitimate."

But that doesn't mean a broad-based corporate tax shouldn't be part of a discussion identifying potential new revenue streams, Rake said.

"Every business in this community has an investment in making this community successful," Rake said. "They have an investment in schools that work and that provide productive citizens as employees and consumers. They have an investment in a government that serves minimal, essential human needs and provides for the physical infrastructure as well."

Rake said the state's "catch-as-catch-can" approach to taxation has resulted in a patchwork of levies failing to cover Nevada's greater needs. It's also already led to some taxes that could hit smaller businesses especially hard -- for example, the 0.63 percent gross-payroll tax imposed in 2003 as part of $833 million in new fees, he said.

Officials should consider what sectors could contribute more to the state's revenue picture, perhaps extracting more revenue from mining, or tapping dollars from major retailers who do business in Nevada but don't pay corporate-income taxes here, he said.

A "broad-based" tax, whether corporate or personal, would bring in revenue from multiple sources, and that means such a levy would also better withstand the ups and downs of the economy, Rake continued.

For the record, state members of the National Federation of Independent Business also shot down a personal income tax by a 97 percent margin.

Rather than finding new revenue sources, Blomstrom said, her group would like to see a "comprehensive review" of how Nevada spends existing taxes.

Gov. Jim Gibbons is assembling the 12-member Nevada Savings and Government Efficiency Commission to streamline operations and maximize tax dollars.

Businesses and consumers across the state are evaluating their expenses for areas to slash, and government should follow that lead, she said.

That's a message Blomstrom said Nevadans could hear more in coming months, as November's statewide and national elections draw near and the 2009 Legislature prepares for its February start. Blomstrom was in Las Vegas this week, meeting with representatives of other nongaming trade groups to talk about coalition-building and voter education, and chatting with fiscally conservative politicians.

She said "some hurt feelings" linger five years after 2003, when gaming operators promoted a 0.25 percent tax on gross receipts for all businesses. Nongaming companies and trade groups successfully fought the proposal, and some major leisure companies subsequently dropped out of chambers of commerce and launched their own associations.

Now, with the state teachers union seeking via a ballot initiative to raise the gaming tax from 6.75 percent to 9.75 percent to boost school funding, some high-profile gaming executives have renewed calls for a broad-based business tax.

Terry Lanni, chairman and chief executive officer of MGM Mirage, and Keith Smith, president of Boyd Gaming Corp., both said in November 2007 that long-term fiscal stability requires far-reaching levies on all segments of the economy.

Representatives of the Nevada Resort Association didn't return a call by press time to discuss whether the organization would formally seek a corporate income tax in coming months.

Blomstrom said she's hoping to avoid a repeat of 2003's battle. She's focusing for now on both gamers' and nongamers' opposition to "governing by initiative." She said her federation might even be willing to help gaming groups fight the teachers' referendum.

"We can't have a healthy public sector or charitable sector without a healthy private sector first," she said.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512.