Tax study will go on without consultant, Horsford says

Senate Majority Leader Steven Horsford, D-Las Vegas, said Friday the review of Nevada's tax and revenue system will go forward despite a consultant's failure to produce the crucial revenue analysis.

The contract with Moody's Analytics, a nationally respected consulting firm, was scaled back dramatically after the company failed to produce anything for lawmakers to review. Legislative Counsel Bureau Director Lorne Malkiewich said last month that because the interim study committee must bring recommendations to the 2011 legislature, that part of the contract was dropped. He said there is no longer time to properly complete the revenue study.

"I was highly disappointed they were unable to perform on the tax study," said Horsford, who championed the idea of a thorough review of not only how state government spends money but how it raises that revenue.

"Despite that, our staff and the process we have in place will allow us to be ready," he said.

He noted that there have been several previous tax and revenue studies done and there is a lot of information already available.

But Horsford said losing the revenue study means the focus will shift more to the "spending side of the ledger, on ways to bring state spending in line with revenues."

His original concept was to develop recommendations not only on state spending but how to change Nevada's revenue structure to bring more stability in times of economic stress for both the state and local governments.

Horsford said a vision stakeholder's group is still working on the "longer strategic plan to grow our economy" and that those recommendations will be ready for the 2011 Legislature.

He said the interim study has to help the state decide which industries will help the state recover and build its economy.

"We have to plan so we know where the opportunities are," he said.

In past economic cycles, Nevada was able to recover quickly enough that officials were able to avoid the difficult process of making systemic changes in state spending and revenue generation. Horsford said that is no longer an option.

Nevada is facing a revenue shortfall of half the $6.8 billion biennial budget for the coming cycle.

"We have no choice," he said. "We have to have the state plan how to fund schools and other services."