Governor maintains promise on taxes

The panel held hearings on a state-financed $500,000 study by Price-Waterhouse into Nevada's tax structure. The panel concluded Nevada needed a business tax and a sales tax on services.

Guinn testified for Miller's controversial 1 percent business activity tax, a tax rejected by the Legislature in favor of a $100 per employee head tax in 1991. And he told a Reno business group in 1990 the state needed higher sales taxes because the economy was not keeping up with demand for services.

The intervening years have made a difference in Guinn's thinking.

Guinn, Nevada's first Republican governor in 16 years, told Nevadans in his state of the state message in January that he wouldn't increase taxes - and proceeded to cut $141 million in existing spending to keep his promise.

In recent months, Guinn has added another promise. He vowed to veto any bill calling for fee increases - unless the increase is supported by the group that would pay the additional money. To prove his point, he vetoed a minor bill setting a new fee for a test taken by real estate agents.

But he makes no such promises about the next legislative session in 2001.

Once the 1999 Legislature adjourns May 31, he and his top aides are starting a review of all state agencies to determine what services they should provide.

The governor also wants to prepare a report on state funding needs through the coming decade - and whether revenues are sufficient to meet those needs.

If Guinn needs to look for revenue sources, Assemblywoman Chris Giunchigliani, D-Las Vegas, figures he only has to dust off the old Price-Waterhouse study.

The study's two basic recommendations - a percentage business profits tax and a requirement that consumers pay sales taxes on services such as dry-cleaning and auto repairs - remain sound, Giunchigliani said.

By taxing services, the state even should be able to raise enough money to lower the overall sales tax rate, she added.

Assembly Taxation Chairman David Goldwater, D-Las Vegas, opposes Guinn's intention to re-examine state government.

"Every new governor wants to reinvent government," he said. "They say they want government run like a business, but you can't run government like a business. Every large organization has problems. This government generally works very well."

Goldwater said the 63 legislators who come to Carson City every other year have the best idea of whether state government provides necessary services because they respond to their constituents.

Regardless of whether a study shows the state needs additional revenue, Goldwater doubts Guinn will push for tax increases in 2001 - because that would be the year before he runs for re-election.

His counterpart on the Senate Taxation Committee, Republican Mike McGinness of Fallon, backs Guinn's initiative to examine state government and revenue sources.

"I definitely think there is a way to escape new taxes in 2001," McGinness said. "We can streamline government and make it more efficient."

Unlike Goldwater, McGinness represents most of rural Nevada, and many of those counties are in economic decline. In several rural counties, assessed property values are dropping, while residents already pay the maximum property tax rate.

Future revenue plans must consider rural Nevada's ongoing needs and probably will include subsidies from wealthier urban areas, he said.

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