By:  Doug Busselman, Executive Vice President

The last time Nevada legislators took up the matter of a possible revamping of our state’s tax structure it came with the momentum of recommendations from a task force established by then Governor Kenny Guinn.  Although the actual concept of taxing business revenue didn’t get off the ground, legislators didn’t go home that year without the largest tax increase in Nevada history.

Along with the increases in taxes Nevada government grew that biennium by more than 33 percent.  The next session (2005), legislators increased government size and spending even more.

In addition to increasing the size of Nevada state government in the 2005 session, it was agreed that Nevada taxpayers should get back some of surplus funds that overflowed state coffers.  While some thought the rebate was a magnanimous move, worked out through the cooperation of legislators and Governor Guinn, it’s hard to not consider it more as a cover to hide the fact that the earlier tax increases really hadn’t been necessary afterall.

One of the likely topics to be taken up during the 2009 Nevada Legislative session will be consideration of how Nevada’s tax structure needs to be redone.  It would seem that whenever there’s not enough in the state checkbook to fund increases – the tax structure is found wanting.

Even though it’s been projected that tax revenue for the next two years, from the current structure will probably produce the same level of income for the state’s General Fund as what came in the biennium before – staying even  is a budget “crisis” in need of more taxes, from more types of taxes.

What Type of Tax Structure Should We Have?

In 2008 Assembly Speaker Barbara Buckley went on the road, with several stops around Nevada, to “listen” to what ideas might be out there for addressing the “crisis”.  From the accounts that reported on Buckley’s meetings, it sounds like some think that Nevada’s mining industry should be paying more in taxes. 

Over the past several weeks we’ve also seen several professors from the University of Nevada system sharing their views on tax increases.  It’s somewhat noteworthy to recognize that these vocal champions of increasing state spending are following the “company line” which starts at the very top of the University System.  Cutting spending, especially for higher education, just is not a option – at least in their perspective.

From the accounts of University professors lobbying for more taxes instead of Nevada living within it’s current means, we’ve seen the suggestion that a Corporate Tax would be a worthy approach.  Then on January 4th a science professor broached the idea http://www.rgj.com/article/20090104/OPED04/901040315/1098/OPED of “leaders” in state government causing us to bite the bullet and put in place a personal income tax.

Even though we will expect just about anything as being possible for the proposed pockets for tax-picking, experience suggests that there will be an effort to position the likely sources as those who currently aren’t paying their fair share.  Stepping up to be better “citizens” was the basis for past legislative themes of “hand over the cash” and there’s little reason to believe anything different this time around.

Probably from the standpoint of having a full line-up of pockets to “contribute” we can understand that Nevada’s tax structure needs to be expanded – especially since the majority of legislators pushing the voting buttons in the Legislative building can only “lead” by having more to spend.