Legislators tout economic development law

Nevada has made some progress on economic diversification but has never adopted a statewide plan to attract more businesses, Assemblywoman Marilyn Kirkpatrick said Thursday at The Orleans.

A new state law will change that by establishing a structure for economic development programs in Southern Nevada, Northern Nevada and rural areas.

There may be some "hiccups" along the way, but overall it's a good plan to get people to work together, said Kirkpatrick, who sponsored the measure in the last legislative session.

"One of the things we heard consistently from businesses is they look at the state as a whole before they decide where to go," the legislator told about 300 members of the National Association of Industrial and Office Properties' Southern Nevada chapter. "I think there wasn't a lot of accountability on the state's part."

Among other things, the bill establishes a "catalyst fund" to provide grants to local governments for economic development. During the next fiscal year, $10 million must be transferred to the catalyst fund from the state's abandoned property trust account.

Industry sectors that show the most promise for Nevada include technology, inland ports and renewable energy, Kirkpatrick said.

The bill also provides financial assistance to research institutions at Nevada universities for the development and commercialization of technology.

"It would change the model of how we incentivize businesses," said John Ramous, regional manager for Harsch Investment Properties in Las Vegas. "With the catalyst fund, there would be some dollars available for businesses coming to the state. That's an important mechanism we didn't have before."

Kirkpatrick was on a panel of state lawmakers who talked about recent legislative action relative to the commercial real estate industry.

Much of the discussion focused on the state budget, with some disagreement over Gov. Brian Sandoval's decision to extend the sunset clause on certain taxes, including a quarter-cent sales tax.

Sandoval was at first opposed to extending the taxes, but did an about-face after the Nevada Supreme Court ruled the state could not transfer $62 million from the Clean Water Coalition to the general fund.

The state budget increased from $5.8 billion to $6.2 billion partly by taking money from city and county government, said state Sen. Joe Hardy, R-Boulder City.

"We did it without raising taxes," Hardy said. "We extended some taxes and did away with others. I think the governor did a great job. He used those sunset taxes, extending them, but he protected 115,000 small businesses from paying the modified business (payroll) tax."

State Sen. Mike Roberson, R-Las Vegas, disagreed with the decision to extend the sunset on taxes, saying it will take $600 million out of the pocket of the private sector. However, it's better than the alternative, he said.

"Thank God we don't have $1 billion to $1.5 billion in new taxes," Roberson said.

Kilpatrick said Nevada is one of the few states that hasn't changed its tax structure in a long time, and that was a topic of much debate at the Legislature, particularly a proposed tax on services.

"It's important to have that discussion," she said. "We hear time and time again that the economy has changed, it's more service-based, so we need to continue to have that discussion."

One industry that's always under attack for not paying its fair share of taxes is mining. With gold prices passing $1,600 an ounce, the industry is doing well today, but it's cyclical, Roberson noted.

Kilpatrick said she wants to take a look at some of the deductions for mining, such as fire insurance and health club memberships.

"How many of you get to deduct for fire insurance?" she asked.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.