Nevada Assemblyman Erven Nelson, R-Las Vegas, speaks in support of Gov. Brian Sandoval's $1.1 billion tax plan during the Assembly floor debate at the Legislative Building on Sunday. The Assembly approved the plan 30-10 after a two-hour passionate debate.
The bill wrapping together the puzzle pieces that make up the tax plan that designed to balance the General Fund budget has cleared the Senate and is on its way to the governor.
Senate Bill 483 is expected to raise nearly $1.3 billion in revenue by incorporating the three pieces of the governor’s revenue plan and the legislation eliminating the sunsets on increases used to balance the current budget into one measure.
Senators concurred with the Assembly amendment putting those elements together by a vote of 18-3 with James Settelmeyer, of Gardnerville, Pete Goicoechea, of Eureka, and Don Gustavson, of Reno, casting the only negative votes.
It passed the Assembly 30-10 — two votes more than the two-thirds needed — Sunday night after more than two hours of contentious debate.
In the end, all 17 Democrats were joined by 13 Republicans — more than half the 25-member caucus — in supporting passage.
“This means so much that we are finally funding education in this state,” said Sen. Debbie Smith, D-Sparks, who has missed significant parts of the session while recovering from brain surgery.
“I am living proof yhou can vote for education and be re-elected,” said Sen. Joe Hardy, R-Boulder City, referring to charges by opponents on the right who say those supporting any tax hikes will face the wrath of voters next year.
He said the education funding — just under $3.5 billion total — “is something we’ve never been able to accomplish before.”
Sen. Becky Harris, R-Las Vegas, said she ran for her seat “on raising money for education.” She said this plan, including programs for the poor, English Language Learners and increasing school choice will improve education in Nevada.
“We have truly sent a message to the children and families of this state that we are serious about improving education,” she said.
Gustavson, however, said that while he believes in funding education and that more money is needed, this plan is not the way to do it.
“We’ve given plenty of money over the years but where’s the accountability — that’s what I’m asking. Here we are throwing more money at those same programs that have not proven to be beneficial to our students,” he said.
The bill implements a $500 annual business license tax for corporations while keeping the $200 rate for non-corporate businesses, raises the Modified Business Tax from 1.17 percent to 1.175 percent on businesses making over $50,000 a quarter and imposes a “commerce tax” based on gross revenues of a business.
It makes up some lost revenue by imposing the financial institution MBT rate of 2 percent on mining as well as banks.
The commerce tax portion drew the most protests from those who say it would unfairly impact high volume, low profit margin businesses like retailers. But supporters said it would capture funding from major national businesses that currently pay very little in Nevada because, while they sell millions here, they have few if any employees in Nevada.
In addition, the plan adds $1 per pack to the cost of cigarettes raising a total of $192 million over current tobacco tax collections. It also extends the transfer of governmental services tax revenue to the General Fund, returning half that money to the highway fund for road projects.
Altogether, the package will generate nearly $1.3 billion to balance the $7.4 billion General Fund budget.