Panel considers task force's tax proposals for Nevada

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CARSON CITY, Nev. (AP) -- The Assembly Taxation Committee heard testimony Tuesday on less-controversial elements of a task force plan for new and increased taxes to help fill Nevada's $700 million-plus budget hole.

Prompting the most discussion was the proposal by the Governor's Task Force on Tax Policy for a 15-cent property tax increase that could be used for state operating expenses or for capital improvement projects.

To impose the tax across Nevada, according to task force chairman Guy Hobbs, the state would have to increase the legislatively imposed property tax cap from the current limit of $3.64 to $4.04 per $100 of assessed valuation.

"In order to do any part of a state property tax increase, we'd have to do that other part," Hobbs told Assembly Taxation members.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said it wouldn't be prudent for lawmakers to raise the cap for their own purposes but give local governments no flexibility in stabilizing their own funding.

Hettrick said several rural counties rely almost completely on their property taxes and are already at their cap, which has ultimately driven down their property values. There are many people in Elko who aren't employed, can't sell their house, but still have to pay property tax, he said.

"There couldn't be a more regressive tax in Elko County than a property tax on a house you can't sell," Hettrick said.

Janine Hansen, of the Nevada Eagle Forum, also spoke out against raising the cap on property taxes.

"Essentially there's not much meaning to a cap if we keep increasing it, is there?" Hansen said.

Hobbs said the task force tried to balance all aspects of raising property taxes, with the benefit being the stabilization of the tax base.

Also discussed was the task force's proposal to raise cigarette taxes by 35 cents per pack, which would net the state about $60 million a year in new revenue.

Paula Berkley, a lobbyist for the Reno-Sparks Indian Colony, said in support of the increase that Nevada currently pays $96 million annually in Medicaid expenses to cover smoking-related illnesses, which far exceeds the amount smokers pay in cigarette taxes.

Assemblywoman Kathy McClain, D-Las Vegas, said she's worried relying on tax revenues that could easily decline as taxes increase.

"I really think if we get carried away on this tax we're going to lose sales to the Internet," McClain said.

The committee also heard testimony about proposals to raise taxes on liquor and restricted slot vendors.

The most controversial part of all the tax proposals currently floating in the Legislature, the gross receipts tax, wasn't heard Tuesday.

Assembly Taxation Chairman David Parks, D-Las Vegas, has scheduled a hearing specifically on the gross receipts tax for Thursday.