Some argue extension is an increase

CARSON CITY -- In their haste to finish the special session in February, legislators passed and Gov. Jim Gibbons signed a poorly written bill that some legislators say contains a sales tax increase in Clark County.

"Absolutely it's a tax increase," said Assembly Minority Leader Heidi Gansert, R-Reno. "Our 'no-tax' governor amended the (special session) proclamation to allow for a tax increase."

Gansert said legislators should have let Clark County voters decide whether to continue a 0.5 percent sales tax they approved in 2002 for road construction and improvements.

"I voted against it because it looked like a tax increase," said Assemblyman Chad Christensen, R-Las Vegas, the only Clark County legislator to oppose the bill. "It is all kind of a blur now, but the last thing I wanted to vote for was a tax increase."

But that is not how the man who developed the bill and worked for its passage sees it.

"There is no tax increase," said Assemblyman Kelvin Atkinson, D-North Las Vegas. "Nobody is trying to hide anything. The tax rate remains the same."

Each is right, depending on how you look at it. The existing 0.5 percent tax rate will remain in effect. But that rate eventually would have dropped to 0.375 percent if legislators did nothing.

Senate Bill 5 passed the state Senate 21-0 and the Assembly 37-5.

Gibbons signed the bill a few days later, asserting it would create jobs without increasing taxes.

Clark County voters approved a bond issue in 2002 that obligated them to pay a 0.5 percent sale tax for local road construction. But the bond issue specified that rate would drop to 0.375 percent in 2028, or once $1.7 billion in road projects were bonded.

The legislators' vote during the special session extended the 0.5 percent rate indefinitely.

The issue might have been forgotten if the conservative Nevada News Bureau had not pointed out on its website that the bill contains a glaring error.

Because of a bill-drafting omission, the approved version of SB5 contains both tax rates. One sentence says the sales tax rate will be 0.5 percent, and then the following sentence says it is 0.375 percent.

"I'm not a bill drafter," Atkinson said. "In the rush of the special session, the error was made. We discovered it recently. This was the last bill we passed."

Gansert said she heard of the bill for the first time at 6:45 p.m. on the last day of the special session.

The Legislature adjourned early the following morning.

Lorne Malkiewich, administrator for the Legislative Counsel Bureau, said the 0.5 percent rate will remain in effect because it was clear from testimony and floor debates that rate was intended by legislators.

And the lower rate?

"It should have been taken out," Malkiewich said.

Lynn Hettrick, deputy chief of staff to Gibbons, agrees with Atkinson that the sales tax has not been increased.

Hettrick said he met Feb. 28 with leaders of the Associated General Contractors who sought legislation that could put laid-off construction workers back on the job.

"They wanted to increase a tax, and I told them no, the governor would not support tax increases," Hettrick said.

Gibbons later agreed to support extension of the existing Clark County sales tax if legislators also would back the proposal and the plan would create jobs, according to Hettrick.

"I agree the bill should have been written differently, but our goal was to create jobs without raising taxes," Hettrick said. "This was a way to create jobs without increasing taxes."

By keeping the higher tax rate, the Regional Transportation Commission in Clark County expects to float a $250 million road construction bond issue this summer that will create as many as 2,000 jobs.

Atkinson, who chairs the Assembly Transportation Committee, said he has not heard any complaints about the bill.

"Everything I have heard is positive," Atkinson said. "The construction industry is happy."

But Gansert said Clark County voters approved the bond issue with the understanding that rates would not be extended without another public vote.

Contact Review-Journal Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or (775) 687-3901.