GOP lawmakers say ‘no way’ to Democrats’ tax plan
May 15, 2013
Democrats rolled out the second piece of their tax plan Monday — a temporary boost to the modified business tax with the estimated $255 million in proceeds dedicated to K-12 education.
Senate Majority Leader Mo Denis, D-Las Vegas, said the bill was designed to be “something that could be supported by everyone,” but Republican leaders and Gov. Brian Sandoval essentially declared it dead on arrival.
“I told Mo on the floor today it’s dead. You’d better come up with something else,” said Senate Minority Leader Michael Roberson, R-Henderson.
He said if that’s all the Democrats have got, “let’s just shut down the session now.”
He was joined by Sen. Ben Kieckhefer, R-Reno.
“The reality is this: They promised a comprehensive discussion of how to reform our tax system and they came up with a payroll-tax hike on day 99 of the session,” he said.
Denis said the plan raises the per-employee modified business tax from 1.17 percent of payroll to 1.5 percent and puts mining companies in the same category as financial institutions, hitting them with a 2 percent payroll tax.
He said the tax would be temporary while a long-term, permanent tax solution is hammered out but that the MBT was chosen to provide funding for vital education improvements now instead of later. Roberson’s mining tax and other ideas, he said, don’t provide money this coming biennium.
The plan will help the educational system today, Denis said.
“Our kids are important and if they are important, then they are important enough to help today,” he said.
Denis said the Democrats didn’t just come up with this idea in a vacuum. They have been talking to business leaders and Republicans throughout the session, he said.
“All these recommendations were done with input from the business community, including the MBT stuff,” said Denis.
Roberson said last week, however, that he had just seen the details of the plan that Wednesday. He added that Democratic leadership had not taken him up on the offer he made more than a month ago to sit down and work through a mutually agreeable plan.
For the long term, Denis said, “we need to sit down with the governor, the Assembly, the Republicans.” He declined to discuss what that long-term plan might look like.
“Educational priorities are things we’ve all agreed need to happen,” he said. “The difference is when to do it and how soon to do it and how much.”
Denis said the MBT plan would generate about $255 million over the coming two-year budget cycle. He said there is an additional $100 million that has been generated by the Economic Forum, savings from employee-benefit costs and other sources that can be put into the pot. That comes to just about the $350 million needed to fund the proposed expansion of English-language-learner, all-day-kindergarten and other programs proposed in a bill by Denis and Sen. Debbie Smith, D-Sparks, earlier this session.
Assembly Minority Leader Pat Hickey, R-Reno, and Sandoval also said they can’t support the proposal. Sandoval said he has proposed adding nearly $500 million to education funding in his original budget with amendments announced in a separate news conference Monday.
“I think one of the differences is, this is paid for,” he said of his plan, which has added about $120 million to education funding through amendments since the start of this session in February.
Most of the additions to K-12 funding in Sandoval’s budget consist of salary increases and “roll-ups” — increasing costs of doing business such as inflation.
Sandoval said that if the Democrats manage to get the MBT plan out of the Legislature — which is very unlikely — he will veto it.
He has also promised to veto the first leg of the Democrat plan, the expansion of live-entertainment tax, by eliminating nearly every exemption now received by businesses, without serious modifications.
Sandoval said he still believes it isn’t necessary to add more revenue by raising taxes.
“We have to grow our way out of this,” he said, referring to the recession.