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July 17, 2019

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Remember those promises of early tax talks during Nevada Legislature? Yeah, right

State taxes

Cathleen Allison / AP

Nevada Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, and Senate Majority Leader Mo Denis, D-Las Vegas, speak at a news conference on Tuesday, Feb. 12, 2013, at the Legislative Building in Carson City. Democratic leaders say they will take an aggressive look at overhauling the state’s tax structure.

Senate Majority Leader Mo Denis stood outside of his office last week and made a proclamation.

“I’m not leaving here without getting more money for education,” he said. “I’ve been very adamant about that. ... We’re talking about these issues. We’re having these discussions.”

Across the hallway, Assembly Speaker Marilyn Kirkpatrick made a similar assertion about tax reform one morning last week as she sat behind her desk, fresh from a morning cigarette break.

“You’ll see in the next 10 days or so that there will be a lot more discussion on these issues,” she said.

If uttering the magic word “discussion” brought gifts of wealth and riches, Nevada’s Democratic leaders would have already delivered state government money by the truckload. But for all the talk of tax reform this year, legislators are entering the homestretch of the legislative session with just two public tax reform proposals: a bill draft to clean up the state’s live entertainment tax and a Republican mining tax proposal that would actually be a 2014 ballot measure. There are no sweeping tax reform measures to speak of, even though repeated studies have called for such measures.

Lawmakers chalked up one early victory when they rejiggered a complex formula on local government tax-sharing. Aside from that, the Legislature now appears poised to carry its major tax reform discussions forward into 2014 and 2015.

Many of the big, broad proposals Democratic leaders spoke hopefully of at the start of session appear to have been castrated — including a sales tax on services, a property tax overhaul and a primary education funding formula makeover.

Those ideas have limped forward as study committees, meaning any action won’t take place for more than two years.

For instance, a past study committee noted the gross inequities in Nevada’s kindergarten through 12th-grade funding formula. The gist of the study is that Clark County kids are getting a bad deal.

Legislators wanted a fix, but now there’s a bill to study that issue further.

Ditto for a sales tax on services.

“The speaker and many others have concluded a services tax and others cannot be implemented in a 120-day session,” said Assembly Minority Leader Pat Hickey, R- Reno.

Earlier this year, legislators heard testimony on structural problems that have resulted from the interplay between the state’s construction boom and bust and the property tax system.

The bill to fix the property tax system now has a study attached to it, but Kirkpatrick said the idea is still alive.

Other tax ideas such as a corporate income tax died outright without a hearing.

“I believe there are some things that get done this session, but in the interim, we’re going to have to follow through on some other pieces,” Kirkpatrick said.

The responsibility for what gets done this session largely rests on the shoulders of the two Democratic leaders: Kirkpatrick, of North Las Vegas; and Denis, of Las Vegas. They, along with Republican legislative leaders, can still introduce emergency bills in the end days of the session, according to the Legislature’s rules.

Kirkpatrick has already earmarked her emergency bill for a coming proposal on cleaning up the live entertainment tax.

“If we need a vehicle, we will have an opportunity,” Denis said.

But it won’t be an easy battle to pass a tax bill.

Click to enlarge photo

Sen. Michael Roberson

They must confront the elephant in the corner: Senate Minority Leader Michael Roberson of Henderson. Democrats have a wider margin in the Assembly than in the Senate, so they especially need Roberson and Senate Republicans to help them pass any tax plan that requires a two-thirds majority vote.

Roberson has said he’s open to discussing tax reform but earlier this week slammed Democrats for failing to put forward any ideas.

Then there’s the elephant in the capitol. It’s the oldest, stalest news in Carson City that Gov. Brian Sandoval doesn’t support creating new taxes (although he does support extending old tax increases. He wields the veto pen, which is the guillotine that would kill any tax bill.

Gone are the early days of the session when flowers adorned legislative desks and lawmakers basked in the glow of bipartisan happiness and comity.

This is the season when pleasant discussion turns to negotiation.

The big question mark that makes the end of this legislative session unique is the teachers union’s margins tax proposal that will be on the 2014 ballot. It’s a 2 percent business revenue tax that Republicans universally hate.

Some legislators say Republicans will come to the bargaining table because of the threat of the margins tax.

But Roberson said he’s the only one so far to introduce a major tax plan-- a mining tax hike he estimates would raise $600 million for education. It would compete directly against the margins tax.

“I’ve been waiting 80 days for a plan from Democrats this session,” Roberson said on the 80th day of the 120-day legislative session. “So far they’ve offered nada, nothing.”

Kirkpatrick’s idea of closing loopholes in the state’s live entertainment tax would bring some revenue to the state this year, but not as much as Roberson’s mining tax.

Both proposals are still ideas. They aren’t bills yet.

There’s still time to push through some kind of tax bill, and Kirkpatrick said many legislators are pulling late nights to negotiate a deal.

Denis still says “everything is on the table” for tax reform options.

Back in February, Kirkpatrick was saying the same thing.

“Change,” Kirkpatrick said when asked what she expected to accomplish on the state’s tax structure. “Hold me to that.”

Now, however, her scope appears homed in on simply closing loopholes.

“We have to look at the smaller changes we can make to ensure that people are actually participating in the system and paying their fair share,” she said.

As for the rest of the agenda?

“I do think that in the long term we have to determine some of these things,” she said.

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