Tax status hurts attracting out-of-state business, Gibbons warns

The uncertainty of Nevada's future tax environment is hurting the state's ability to attract new companies, and fears of possible tax hikes are driving companies looking to move to pick other Western states, Gov. Jim Gibbons said Thursday.

The governor made his remarks during a roundtable discussion with members of the Las Vegas Chamber of Commerce at which he reiterated his no-new-taxes stance.

"Their greatest fear is not the education system, but the lack of predictability in taxes," Gibbons said of out-of-state industries that have considered moving here.

The perception that Nevada may end up with a broad-based business tax, or heftier existing taxes, has benefited competing Western states, he said. Many of the companies looking to flee high-tax environments, like California, are bypassing Nevada, he added.

"Right now, we are having a difficult time competing with Texas and, in some cases, Arizona and New Mexico," Gibbons said.

Incoming Las Vegas Chamber of Commerce President and Chief Executive Officer Matthew Crosson noted what higher taxes have done to other states.

"Nevada has its problems, but so do a lot of other states," Crosson said.

Crosson's selection to head the local chamber was announced this week. He is leaving a post as president and CEO of New York's Long Island Association.

Nevada's long-standing reputation as "a low-tax and low-government intrusion state" is at risk, and businesses looking to relocate are shying away, Gibbons warned chamber members.

"We have really never had this much unpredictability in Nevada," he said.

To boost diversification efforts, Gibbons will propose tax breaks for businesses that move to Nevada.

He said the Silver State simply can't compete with incentives offered by rival states, although he said rebating half of a new business's tax payments might not be out of the question.

"Fifty percent of something is better than 100 percent of nothing," he said.

Businesspeople attending the discussion expressed concerns about the status of the state's lagging public education system and dwindling university system funding.

BannerView executive Mark Cenicola asked what private enterprise should do to involve the general public in solving the state's budget crisis.

Never one to shrink from criticizing state legislators, Gibbons said the politicians viewed themselves as "intellectuals" and implied the business community might be able to come up with a better solution.

"That's why I was disappointed to see the Legislature treat the chamber with indifference, as if it is not relevant," he said.

The governor also promised to act as a conduit between businesses struggling to get financing and lenders.

Gibbons called small businesses vital to job creation, and told chamber members he was on their side.

"My number one challenge is to bring jobs to Nevada and increase our tourism-based economy," he said. "Our goal is to capitalize on what we have to increase employment and take people off the unemployment rolls."

After the meeting, Gibbons reiterated his anti-tax stance.

"We have a $3.5 billion shortfall in the next biennium. So, who is going to pay the taxes? The guy hiding behind the tree?" he asked. "There is no guy hiding behind the tree."

Contact reporter Valerie Miller at
vmiller@lvbusinesspress.com or 702-387-5286.