Assembly leaders say business tax break unlikely

Proposals to give businessmen and bankers tax breaks this session are on life support in the Assembly.

Sen. Bob Beers, R-Las Vegas, fought for and won a temporary reduction in the Modified Business Tax in 2005. But since it depended on the surplus money in the state treasury, it was passed with an ending date, which means the tax will automatically go back to its original level July 1 unless lawmakers pass his bill this session to make the reduction permanent.

Meanwhile, Assemblyman John Marvel, R-Battle Mountain, is pushing legislation that would eliminate the bank franchise fee approved as part of the tax package in 2003.

Those tax breaks are supported by Gov. Jim Gibbons and his chief of staff Mike Dayton said Friday the governor isn't changing that position even though he has directed his agencies to begin cutting budgets. But the decision is out of Gibbons' hands because all lawmakers have to do is not pass either bill.

"We can't be promising anybody money back," said Ways and Means Chairman Morse Arberry, D-Las Vegas. "We've got about $112 million in cuts to be made."

Assembly Speaker Barbara Buckley said it's unlikely lawmakers will be able to give anyone a tax break in a legislative session faced with a revenue shortfall requiring budget cuts.

Ways and Means Vice Chairwoman Sheila Leslie, D-Reno, was more blunt: "Any tax reduction is not going to get much traction."

All lawmakers have to do is nothing and the business tax will bump back up to its original level, adding an estimated $28 million to the treasury. And not passing the bill eliminating the per-branch franchise fee imposed on banks would add another $6.5 million to the pot.

Together, those increases in revenue would cover about a third of the $111.8 million shortfall.

Beers said he will continue to push for his bill making the business tax reduction permanent.

Told the Assembly's leadership doesn't believe this is the time to cut taxes, he replied: "They never do."

Lobbyist John Sande, representing the Nevada Bankers Association, said eliminating the franchise fee "would have been difficult even without the budget shortfall."

But he said he will try to make lawmakers understand that fee is an unfair burden on the banks.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.