Tax increases are not a part of state improvement plan

CARSON CITY -- The 20-member Nevada Vision Stakeholder Group approved a 92-page plan Friday to improve life in Nevada over the next 20 years, but it does not endorse increasing taxes to get there.

Members of the legislatively appointed group made few changes from the draft plan prepared last week by Moody's Analytics, a national economic research company.

The group added a statement that Nevada state government needs to change its fiscal structure and advised legislators not ignore the Vision Stakeholder plan like they have other studies in the past 20 years.

Don Snyder, a group member representing the Smith Center for the Performing Arts, said it will be hard to improve the quality of life in Nevada because of the lack of "economic vitality." The state's 14.3 percent unemployment rate is highest in the nation.

Other members emphasized that instead of raising taxes, the state government should operate more efficiently and legislators should cut budgets.

During public comment at the five-hour meeting, Progressive Leadership Alliance of Nevada legislative lobbyist Jan Gilbert lamented that many of the group's goals "won't see the light of day because of the lack of revenue."

Gilbert said Medicaid, the children's health program and other programs for the poor should be expanded but probably won't because of the lack of money.

Legislators face a potential $3 billion budget shortfall when they go into session in February. They appointed the Vision Stakeholder Group and hired Moody's Analytics to create a blueprint for changes they might make.

Moody's, however, failed to meet deadlines for examining the state's tax structure and recommending tax changes, so the company will receive only $99,000 of its $253,000 contract to complete the tax study and advise the Stakeholders Group.

It had been widely speculated that Moody's and the Stakeholders Group would propose a business profits tax and expand sales taxes to include untaxed services.

Business lobbyist Cheryl Blomstrom urged the group not to recommend higher taxes. Blomstrom said businesses already face higher unemployment taxes since the state has to borrow hundreds of millions of dollars from the federal government to pay unemployment benefits. Employees also face higher taxes to replenish the state's depleted unemployment trust fund.

"Please do us no harm," Blomstrom said. "Nevada businesses now are struggling. Behind every business are families."

Many of the findings in the report, called "Envisioning Nevada's Future: Goals & Strategies for Advancing Our Quality of Life," were hardly surprising.

The group calls for Nevada to make a strong effort to diversify its economy, a goal that goes back to at least the 1980s. Moody's said Nevada has the most volatile economy in the nation because of its concentration on a few industries.

Geoff Lawrence, an analyst with the Nevada Policy Research Institute in Las Vegas, likes the recommendations for expanding charter and empowerment schools, which he believes would not cost much more money. But he quickly added most recommendations are too expensive.

"This is a spending wish list that assumes they have revenue," he said. "The revenue is not there to back it up. The proposals are going to be dead on arrival."

But the report is optimistic about Nevada's future.

"As the current national economic recovery transitions into self-sustaining expansion, Nevada is expected to resume its above-average pace of growth, due largely to renewed in-migration and consumer spending of new households."

The state's climate, recreational opportunities, low tax base and natural beauty will attract younger people and retirees.

Over the next 20 years, Moody's expects employment in the leisure and hospitality industry to grow at a 3 percent annual rate, while construction jobs will grow slightly less than 4 percent a year.

Robert E. Lang, the Vision Stakeholders non-voting chairman and a professor at University of Nevada, Las Vegas, also was upbeat about the report and Nevada's future.

"I see this as the beginning, but it is something you never really finish." Lang said. "This can set the priorities for our future."

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.