Las Vegas Sun

March 28, 2024

Some call him a hypocrite, but Gilman, others want alternatives on tax plan

Tesla Special Session Day 2

AP Photo/Cathleen Allison

Lance Gilman, principal and director of the Reno Tahoe Industrial Center, listens to testimony during the second day of a special session at the Nevada Legislature, in Carson City, Thursday, Sept. 11, 2014. Lawmakers discussed a complex deal to bring Tesla Motors to Nevada, specifically to Gilman’s center, east of Reno.

Lance Gilman knows how to take criticism, which is coming in handy for him lately.

The smooth-talking Storey County commissioner, real estate tycoon, brothel owner and deal broker who helped land Tesla’s battery factory at the Tahoe Reno Industrial Center took heat for not endorsing Gov. Brian Sandoval’s new tax plan.

He is a board member of the Economic Development Agency of Western Nevada, a private-public entity that receives state and nonpublic dollars to help lure businesses to the Reno-Tahoe region. Out of 25 EDAWN board members, Gilman was the only one to vote in opposition of the governor's reform agenda.

Accusations of hypocrisy murmured through the hallways of the Legislature. The question about him: How could Gilman, who recently received what many called a taxpayer-funded windfall supported by Sandoval, have the gall not to fall in line with the governor’s push for tax increases to reform Nevada’s public education system?

“I’ve been called so many things and drug around by the neck — at my age it doesn’t matter, “ he said.

Maybe not, but his EDAWN vote has some people remembering how the Nevada Department of Transportation board, of which Sandoval is a member, approved $43 million last fall for a project to help reimburse Gilman and his partners for building USA Parkway, the transportation corridor of Gilman’s Tahoe-Reno Industrial Center.

Critics say the road will primarily benefit Gilman and his partners at TIRC — not the taxpayer.

For a decade, Gilman and his partners lobbied federal and state lawmakers for the road, but didn’t get the money. They built a third of the road themselves, investing more than $60 million of their own money. But once the state approved the Tesla deal — with its promise of more businesses, workers and residents in the region — Sandoval and NDOT realized the need to complete the road and have the state maintain it.

That’s why many thought Gilman should have been more accepting of Sandoval’s plan.

When it comes to the tax proposal, Gilman isn’t alone in his dissent. Retail, trucking, registered agents and a few others are in opposition to Sandoval’s plan, which triages the state’s 330,000 businesses into 30 industry categories and subjects them to rates that would levy between $400 and $4 million per year.

The state estimates the tax will raise at least $438 million that will go to educate funding.

Despite the opposition, there is broad-based support for levying a tax to help bolster the state’s public education system. Gilman, along with the majority of the business and special-interest groups in the state, has pledged support for a new tax plan.Those opposing Sandoval’s plan just don’t know which way is best.

Gilman praised Sandoval — one of at least 10 Republican governors proposing tax increases nationwide — for his aggressiveness in tackling education reform. He says he simply wants another avenue for raising revenue.

Sandoval hasn’t characterized his plan as the ideal solution. He’s publicly challenged lawmakers to find alternative proposals and add to the discussion.

Sandoval’s plan has had four hearings, but lawmakers have yet to take a single vote on it. The measure isn’t the only one on the table. Republicans and Democrats have submitted alternative proposals that will have hearings, and economic development groups are working to create even more.

“I am not lined up against the governor at all,” Gilman said. “If I were sitting at his side and I had my moment I would say, ‘Let’s come at it in a different direction.’”

But, like other critics of the bill, Gilman compared Sandoval’s plan to the margin tax initiative that voters shot down at the polls on Election Day. Both the margin tax and Sandoval’s plan, SB 252, are taxes on companies’ gross receipts.

The Sandoval administration says it’s wrong to compare SB 252 and the margin tax. The argument from the governor’s office: Sandoval’s plan levies less money, has lower rates and is fairer for business because of exemptions and deductions that keep industries from being doubly taxed.

Gilman doesn’t buy it.

“I don’t care if you put lipstick on a pig, but the governor’s bill is going to smack of a re-creation of [the margin tax],” he said.

Elaine Wynn, gaming mogul and president of the state’s education board, spoke to the essence of the issue during a hearing last week. She praised the governor’s gusto while softly addressing the need to consider other options on taxes.

“The fact that a plan has some negatives attached to it is no justification to do nothing,” she said. “I advocate in support in a sense of urgency to do something now.”

While EDAWN has showed its support for raising taxes in the name of education, it has yet to issue a formal, public endorsement on Sandoval’s legislation. In the south, one economic development group — the Las Vegas Global Economic Alliance — pledged its allegiance to Sandoval. But one group has not.

The Las Vegas Metro Chamber of Commerce — which represents more than 4,000 businesses in Southern Nevada — is mum on Sandoval’s plan. But it’s been busy working on alternatives behind the scenes.

Over the years, it’s supported and opposed a variety of local and state tax proposals. Like Gilman, the chamber is willing to endorse a tax hike. But it wants more options on the table.

The chamber has a team of lobbyists working in the Legislature, it hired a high-end think tank to conduct a study investigating viable alternatives to reform the state’s tax structure and it is keeping its eye on the proposals coming from both parties.

“We are going to be vigilant on behalf of our members,” said Kristin McMillan, president and CEO of the Metro Chamber. “They deserve a complete and thoughtful analysis."

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