Nevada faces tax dilemma

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A higher casino tax? A business tax? A new tax structure for Nevada?

These are enormous questions for Nevadans to confront in the next few months, but all most voters want to know is: Do we really need to raise taxes?

Sen. Joe Neal's proposal would raise the taxes on casinos' gross income, and the Nevada State Education Association's plan is to tax net profits of Nevada businesses.

Both initiatives may go to voters at the same time Gov. Kenny Guinn and legislators are examining the state's overall tax structure and trying to get a handle on its budget needs for 2002-3.

To the voters' basic question - Do we need to raise taxes? - the answer in November may well be: We don't really know.

Who would vote for a tax increase, no matter what industry it hits, under those circumstances?

As it stands, the warning is being given repeatedly that Nevada is getting by on sheer momentum. Services are not keeping up with demand, yet growth in the state has been so explosive that the real problems haven't been exposed.

It will all catch up with us someday, we're told. And that day could come sooner than later, with the advent of expanded Indian gaming in California.

Guinn is looking to make some fundamental changes in how Nevada derives its revenue and how it budgets that money. The answer is not a knee-jerk increase in taxes, yet it seems clear that Nevada somehow must come up with additional revenue and a tax base more stable than sales tax. Neal is looking to big casinos. The teachers' union is looking at all businesses. If it is spread even farther, property tax is an obvious place to go.

First, though, Guinn is searching for answers by re-evaluating department priorities, looking for money within departments' budgets rather than simply holding out a hand for more. It's not a question of whether the state's budget will grow - it's by how much and for what purposes. As long as there is growth in the state, there will be growth in state government.

Where there is money to spend, Guinn wants it to go toward the state's "super priorities." So far, he has identified those as education and state workers' pay, but legislators have yet to weigh in with their preferences.

Education will remain one of them, we're sure. Yet, education is such a broad term. Voters will want to know exactly where tax money will be spent. More schools? More teachers? Higher pay for teachers? Remediation for struggling students? More for textbooks and supplies? More vocational programs? More college-preparatory programs?

Neal would make education the main beneficiary of his proposal to raise casino taxes, and the teachers' union obviously has its sights on bigger school budgets. Both initiatives could be on the ballot this fall, although they may have little effect on the 2002-3 budget because they would need to be approved by voters again in 2002.

It seems the state needs a far more comprehensive strategy than offered by either of these initiatives. But if such a strategy hasn't taken shape by November, voters will be scratching their heads trying to figure out why they should be raising anybody's taxes.