Efforts to raise broad array of taxes stall as former tax supporters balk a details in the bill.
WASHINGTON – Nevada has flourished as a low tax, business friendly state, turning a desert into a paradise. But it looked as though two-thirds of the legislature was poised to accept Gov. Bobby Guinn\’s (R) tax bill that would dry out Nevada\’s oasis by choking the state with new taxes.
But Nevada taxpayers won a reprieve Wednesday night when two former tax supporters changed their votes upon learning that the bill contained language that would allow casinos to relocate to neighborhoods. The defections of Sen. Bob Coffin (D-Las Vegas) and Sen. Valerie Wiener (D-Las Vegas) dropped the vote below the two-thirds margin required to pass a tax increase, and triggered such ill will that prospects for compromise look dim.
"The fall-out over the casino relocation language is a welcome, though unexpected, godsend," said taxpayer advocate Grover Norquist, president of Americans for Tax Reform. "Gov. Guinn\’s tax hike targets businesses that pump the life into the state. It stomps on the industries and the people that have invested the most in Nevada. Increased taxes will drain the state, leaving its economy as dry as its land. Perhaps this instance of legislative maneuvering will save Nevada from this fate."
Gov. Guinn claims that Nevada faces a $704 million shortfall to fund existing programs, and he is asking for a tax hike of $860 million. However, that $704 million shortfall is caused by Gov. Guinn\’s proposed 25% spending increase. A smaller rate of increase alone would eliminate the shortfall. And, states across the country, from Colorado to Texas to Florida to Massachusetts, have faced similar huge budget gaps and have balanced their budgets without raising taxes. What\’s more, President Bush\’s latest tax cut bill contained $20 billion of aid to the states. Nevada will receive $96.73 million of new money from this bill, making it easier to close the budget gap without a tax increase.
"Has Governor Guinn taken into account this new federal money?" Norquist continued. "Has he adjusted down his request for new taxes? Tax increases were not necessary before, and they are even less necessary with the new federal money. The tax hike is dead for the moment. In this case, legislative gridlock seems to be the best thing that could have happened to Nevada."