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May 23, 2015

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Legislature 2013:

Kirkpatrick to seek revenue-neutral tax reform

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Sam Morris / Las Vegas Sun

Assembly Speaker Marilyn Kirkpatrick testifies before the Taxation Committee on the second day of the 2013 legislative session Tuesday, Feb. 5, 2013 in Carson City.

2013 Legislative Session - Day 2

Nevada Taxpayers Association lobbyist Carole Vilardo talks with Assembly Speaker Marilyn Kirkpatrick before a meeting of the Taxation Committee on the second day of the 2013 legislative session Tuesday, Feb. 5, 2013 in Carson City. Launch slideshow »

Rather than seeking a tax increase this session, Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, said Tuesday she will pursue revenue-neutral reform aimed at increasing Nevada’s tax base enough that it will eventually generate more money for education and other state services.

Such an approach could earn considerable Republican support, which is necessary for any change to Nevada’s tax laws.

“We are going to try hard to do that,” Kirkpatrick said in a brief interview with the Sun, referring to working a deal for revenue-neutral reform.

Kirkpatrick, who so far has shied away from detailing what she wants to do on taxes this session, said she would favor eliminating the payroll tax and ending the “sunsets” on what was supposed to be a temporary tax increase.

“I want to get rid of the sunsets altogether,” she said of the 2009 tax increase that was originally supposed to expire in 2011. The Legislature extended those taxes two years ago and Gov. Brian Sandoval has proposed another two-year extension.

“We can’t be on a seesaw,” she said. “I want the sunsets off.”

Kirkpatrick did not detail a specific proposal for broadening the tax base. But she said expanding the sales tax to include services — such as hairdressing, accounting and legal advice — would be a realistic approach. To make it “revenue-neutral,” the sales tax rate would be lowered.

For weeks, Kirkpatrick has promised to begin on Day 2 of the session an “open and frank discussion” of Nevada’s tax structure, which repeated studies have shown relies too heavily on sales and gaming taxes.

That discussion did begin Tuesday — with a mind-numbing, spreadsheet-heavy explanation of how tax revenue is allocated among local governments. The hearing, before the joint Senate and Assembly tax committees, did not delve into the tax structure.

In interviews after the hearing, however, both Republicans and Democrats on the committee voiced support for a “revenue-neutral” approach to changing the tax structure.

“I think you would have Republicans very seriously entertain that possibility,” Assembly Minority Leader Pat Hickey, R-Reno, said. “It’s not our goal for nothing to happen. That’s not our goal.”

Senate Assistant Minority Leader Sen. Ben Kieckhefer, R-Reno, echoed Hickey, saying “some method for lowering the rate and broadening the tax base” could earn significant Republican support.

While a revenue-neutral approach is earning kudos from Republicans, some in Kirkpatrick’s party may be dismayed if she stops short of pursuing a tax increase.

More liberal members of the Senate and Assembly Democratic caucuses have said additional revenue is needed now to properly fund education and other state services.

Sen. Tick Segerblom, D-Las Vegas, for example, described foregoing additional taxes this year as “rearranging deck chairs on the Titanic.”

To sell it to Democrats, Kirkpatrick points out that broadening the tax base will grow revenue in years to come.

“We need to think long range,” she said. “We can put some things in place now that will result in revenue in the future. But it will all be revenue-neutral (for this budget.)”

If she is able to cobble together enough support among Republicans and Democrats, Kirkpatrick would still have to face Sandoval.

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