THE NINTH DAY
Carson City (Wednesday), June 11, 2003
Senate called to order at 3:40 p.m.
President Hunt presiding.
Roll called.
All present.
Prayer by Senator Rawson.
Our Father in heaven, we are grateful for our blessings. We are
thankful for this great State and for all of the wonderful opportunity and the
diversity of interest that we find here. We ask for Thy Spirit to be with us to
help us find the common good and the common interest. Help us in our way to be
able to accomplish our obligation to the people of this State.
We ask for Thee to be with us, and we do this in Thy Holy Name.
Amen.
Pledge of allegiance to the Flag.
Senator Raggio moved that further reading of the Journal be dispensed with, and the President and Secretary be authorized to make the necessary corrections and additions.
Motion carried.
MOTIONS, RESOLUTIONS AND NOTICES
Senator Raggio moved that the Senate resolve itself into a Committee of the Whole for the purpose of considering various revenue plans and the unresolved issues of the 72nd Legislative Session, with Senator Raggio as Chairman and Senator McGinness as Vice Chairman of the Committee of the Whole.
Motion carried.
IN COMMITTEE OF THE WHOLE
At 3:53 p.m.
Senator Raggio presiding.
Various revenue plans and the unresolved issues of the 72nd Legislative Session considered.
The Committee of the Whole was addressed by Senator Raggio; Senator Amodei; Senator Coffin; Gary L. Ghiggeri, Senate Fiscal Analyst; Senator Nolan; Senator O'Connell; Senator Neal; Senator Rawson; Senator Townsend; Senator Care; Senator McGinness; Senator Titus and Senator Schneider.
Senator Raggio:
Since the last time we
met, the vote on the floor of Senate on Senate Bill No. 4 failed. Therefore, we
are back in the Committee of the Whole. It is an open secret that the members
of the Legislature in both Houses and the various caucuses have been meeting
consistently to try to determine whether or not there is a consensus for a
revenue plan that will meet the needs of the budget which we have passed. There
has been extensive discussion, negotiation and exchange of information on this
issue. It is the Chair’s understanding that we have not yet reached a decision
on a measure that will pass in this House let alone one that will meet the
two-thirds requirement of the Legislature as a whole. Having said that, there
are plans that have been proposed by caucuses, by members of the other House as
well. They have been examined and adjusted. It is time for us to sit as a
Committee of the Whole where we can sit together to reach an agreement or a
consensus on a plan. We have a plan that has been finalized by the Republican
membership in this House. It has been shared with the Democrat membership. It
has no single author. It has many authors. The issues have been studied.
Concerns about each component of the revenue plan have been studied. Now is a
good time to bring it forth. There is a plan sent to us by the Democratic
membership of the Assembly. It is open for discussion. At this time, it seems
there is not much to gain by reopening Senate Bill No. 4. The issues are, one:
is there a plan that can muster a two-thirds vote, two: is there the mechanics
for any such plan that can be agreed to?
Senator Amodei will outline the revised plan before us. He will
refer to the paper before you marked Senate Caucus, 2:27 p.m., June 11, 2003.
Senator Amodei :
Thank you, Mr. Chairman. This latest sheet represents discussions
with people on both sides of the aisle, various industry groups, listening to
the concerns and the absolute lines-in-the-sand, and where we thought there was
ability to make progress. The Taxation Revenue Options is before you. The cigarette
plan represents a 45-cent increase in fiscal year 2004. It would be followed
with another 5-cent increase in fiscal year 2005. The price would go up a total
of 50 cents during those two years. The last plan, under consideration by
our colleagues in the other party in both Houses, had proposed a 35-cent
increase in cigarette tax. We felt this represented some movement on that issue
as a result of the input of all the legislators involved.
The next two items concern liquor and tobacco allowances. Those
have not been the subjects of much discussion over the last 72 hours.
There were many proposals for the liquor excise tax between a
50-percent increase and a 100‑percent increase. We proposed an 89-percent
increase. Our colleagues indicated 75 percent was more in order. Before you is
a 75-percent increase that starts in fiscal year 2004.
The LSST retailer allowance has not matriculated as a result of
the discussions during the last 72 hours. The business license fee has
alternated between $50 and $100 per year. The proposal puts it at $75 per year.
The business license tax is repealed January 1, 2004. The Secretary of State
fees based on A.B. No. 536 of the 72nd Session with amendments proposed in
conference regarding securities has not been the subject of much substantive
discussion over the past 72 hours.
Senator Raggio:
On the business license
tax, formally known as BAT, effective January 1, 2004, there would be no
business license tax paid at all. Is that correct?
Senator Amodei:
That is correct.
Senator Raggio:
That is why we have a loss of $40.6 million the first fiscal year
and for a full year, a loss of $83.8 million. Is that the explanation?
Senator Amodei:
That is correct. Next is the live entertainment tax with 10
percent on casino and non-casino events. That had little of nothing in the way
of exemptions. Exclusions for food and beverage have been provided in
facilities with over 5,000 seats. There are different effective dates. Those
were the result of discussions on both sides.
The room tax is a 1-percent increase. The discussions showed
there were two positions. One was to eliminate a room tax provision and the
other to have one at 1 percent. This measure reflects a room tax that would be
levied by the State at 1 percent.
The gaming provision comes from this Committee of the Whole in
the context of an amendment to Senate Bill No. 4 has not changed as a result of
the adoption of Senator Care’s amendment several days ago. Restricted slots at
a 33-percent increase has not been the topic of discussion and has not changed
during the last 72 hours.
The real estate transfer tax in our last plan was $1.55 per $500
of value. The proposal is a $1.35 per $500 of value, and the real estate
transfer tax is initiated under this proposal in the second year of the
biennium. There has been discussion of adopting a provision that is similar to
IRS Code 1220 that provides for a step down for those who pay the tax if the
property is transferred again within a certain time frame and time schedule that
will be adopted. There would be a decreasing credit based upon how close it is
to the original date of transaction to lessen the impact on those who buy, sell
and trade property on a regular basis within a 5-or 10‑year context.
The final provision is the one that generated the most
controversy. It is the employer tax at 1.1 percent of capped wages. Our caucus
focused on this tax during discussions. There were things we felt were strong
about this as a potential revenue source. There was a known, specific universe
to tax because of data on the ESD form the State currently collects. There
would be no doubt, when voting for this tax, what amount of revenue would be
raised. There were concerns from those in the labor sector that a tax on wages
which was uncapped would penalize those employers and would keep them from
providing raises, or it would penalize those who provide jobs that are high
paying. That is why the ESD data is focused on as a cap for those provisions.
It floats with the average State wage. The net effect of that provision is that
wages paid above that amount are not subject to the proposed 1.1-percent tax
rate. All wages paid above that would not be taxed. Because of concerns by the
labor sector, the rate was reduced from yesterday’s rate of 1.25 percent which
provided an equivalent of $268.75 per employee, to a rate of 1.1 percent which
provides $236.50 per employee. That was thought to be an appropriate move
because it reduced by half the amount above $200 that is being taxed, thereby,
putting half of the money above $200 per employee back on the table for
potential inclusion in collective bargaining negotiations.
Why is $200 a significant figure? There were many in the business
industry who pointed to the head tax which is presently $100 per employee per
year and said they liked the stability of doubling it and knowing what they
were getting into. In some peoples’ minds, the $200 figure was the figure being
negotiated.
The provision, that is not in here and is the other half of the
controversy, is an income-based tax provision focusing on a gross receipts
driven proposition. It was offered as the other half of the funding for what
these line items fund. The tax revenue sheet explains that the employers’ tax
of 1.1 percent of capped wages generates approximately $360 million a year. The
issue is how do you fund $360 million in the biennium as a result of
broad-based business taxes. This is what we thought represented the best
possible alternative for generating those revenues. There is a disagreement as
to whether or not a gross-receipts based tax should play a significant roll. As
of last night, the suggested proposal provided that a gross-receipts tax which
had 18 brackets and 6 exclusions could play a roll in raising a significant
portion of the $360 million in a biennium.
After evaluating that tax and listening to organized labor's
concerns about money available for collective bargaining, it was the view of
the majority of those in the Senate Republican caucus that a reduction in the
payroll tax to provide half of that amount above $200 was an appropriate
response. We were trying to address the concerns of organized labor rather than
trying to implement a gross-receipts tax on income based upon 18 brackets and
exclusions for six different industries.
Senator Raggio:
What is the facility of implementation of this plan?
Senator Amodei:
In discussions, there was
a concern about the operational state of our infrastructure for tax collection
right now. The existing budget has reflected that by providing multiple,
additional and significant resources to allow those who work on our behalf to
collect taxes and monitor revenue to try to do their job in a better way with
additional infrastructure and additional personnel. The information we received
from staff and from the Department of Taxation indicated the employer tax,
which anticipates the phase out of the existing business activity tax, that the
Department resources devoted to collecting the RAT could be devoted to
collection of the employer surcharge on capped wages. In comparing that to a
gross-receipts tax start-up, the concerns were that we did not have a database
in existence that would allow us to be specific about the tax rate to avoid
over-collection. We do not presently collect that information, but the
Governor’s Task Force has done a great deal of work on that issue.
Apportionment issues were a problem because the tax that was
proposed was a multi-state tax. California is the only other state close to us
with this tax. We believe the California Franchise Tax Board is engaged in
extensive litigation regarding apportionment issues. Nevada’s borders do not
mean much in terms of the economy that drives our State. We are part of the
Intermountain West. We play in the Pacific Rim. The time needed, to address the
apportionment issues, seems like a very large hill to climb for purposes of
implementing this source.
The decision, reflected in that caucus, was that the employer tax
was more practical and cost effective and a more certain proposition to fund
the budget, which has already been approved, than going the other way.
Senator Raggio:
Staff indicates that if
this plan were adopted an appropriate bill draft would be available by 6:00
p.m. today.
Are there any comments or questions from the Committee?
Senator Coffin:
Thank you, Mr. Chairman.
Though Senate Bill No. 4 is dead, we had many discussions about the intent of
the provisions of these drafts that did not make their way into the language of
the bill that could be easily read, interpreted and argued. We entered into a
dialogue about intent as to what we wanted to collect and how far we wanted to
stretch on some of these issues. I would like to think that the dialogue we had
on these topics still stands since the taxes we discussed at that time were
similar in their reach. The entertainment tax was brought into the tax bill so
that we might be able to have live entertainment clubs brought under the tax
umbrella. They are profitable and are willing to pay their civic duty and join
the casinos in doing so. But then, we realized we had events of a special
nature that were competitive with other states and other cities outside
Nevada. We discussed boxing, events at
the raceway and events such as rodeos. Those are important to us. They are
contained in the live entertainment tax, and I have not seen a footnote that
indicates that they will be exempt.
Senator Raggio:
The only footnote to the
Chair’s understanding is that it is a tax on admissions to live entertainment
events excluding food and beverages in facilities over 5,000 seats.
Gary L. Ghiggeri (Senate
Fiscal Analyst):
That would also exclude non-profits, trade shows and
music performed by strolling musicians.
Senator Coffin:
That would be in Italian
restaurants. Staff has mentioned some of the intent. Do we still have the
appetite for these other special events? Non-profit may or may not include all
of the ones discussed the other day.
Senator Raggio:
Does anyone else wish to
respond?
Senator Amodei:
Mr. Chairman, I am not
familiar with this aspect of the bill. Senator Coffin has mentioned this
before. I am not certain that this segment of it has been researched in terms
of talking about potential changes. Senator Nolan had some concerns, as did
Senator Shaffer.
Senator Nolan:
I will support this in the package because this tax
package is constructed on a house of cards. My concern is that there are events
that are competitive in nature. If we are unable to attract them due to the
imposition of this tax, then we will affect the balance of the other taxes
proposed including room taxes. Some of these events will bring in tens of
thousands of people. These events are negotiated by organizations. They may not
be a non-profit organization, but they may be an organization that will
negotiate a price for hotel rooms and services and the ability to retail their
product. They will look for the best venue they can get. I would like to see an
amendment to this if this is included in this tax. That amendment should allow
for an exemption to be issued by the Department of Taxation so they could
develop an objective criteria if a hotel or any other venue can demonstrate
that the imposition of this tax will negatively impact them in such a way that
we would lose the event along with its associated revenue from that event. They
should have the ability to grant an exemption. If it is constructed in a way
that there is a threshold based on the size of the event, based upon the net or
the number of rooms, then we should be able to construct the exemption in an
objective way.
Senator Raggio:
There is a typographical
error on footnote 1. It should read, excluding food and beverages “in”
facilities over 5,000 seats.
Senator O'Connell:
Senate Bill No. 4 was narrowed with the non-profits to the
501(c)(3). Do I understand from the last vote taken that we included all 501(c)
organizations? That is a much broader aspect as it refers to the non-profits.
Senator Raggio:
The summary from staff
says the following, “the live entertainment tax would not apply to any amount
paid for live entertainment that is provided by or entirely for the benefit of
a non‑profit organization that is recognized as exempt from taxation
pursuant to 26 US Code section 501.”
Senator Neal:
That is very extensive.
Senator Raggio:
Yes, that is 501 not just
501(c)(3). I am relying on this summary. We would have to see the bill.
Senator Nolan:
With respect to the last
question, in essence, it gives our universities an opportunity to not impose
this and to not become tax collectors. It puts them and their facilities in
direct competition with the private sector for the same venues. Another problem
exists with the 5,000‑seat regulation. There are a number of facilities
with large hotel-convention facilities. They can adjust their seating from 500
to 10,000 seats. I feel 5,000 is an arbitrary number. I would be more
comfortable if we included the 501(c)(3)s. Those organizations should be in
there, but if this is included, there should be a process for exemption.
Senator Coffin:
I think Senator Nolan expressed my concerns well. We should
consider this. There is no motion on the floor, and we are in discussion. We
should try to get some language in there to address this. Some flexibility
should be given. We are looking at entertainment numbers. They are hard to
predict. We could be counting dollars we do not have. We should leave it open.
The Republican plan has taken out the bank franchise fees. That is a change
from the Assembly Democrat plan. That should satisfy some of the members. There
are some things I do not like, but the main thing is that we are moving forward
with these proposals negotiated by the Republican caucus. There may be some
serious objections to others.
Senator Rawson:
I wanted to be certain
that footnote 3 of the Taxation Revenue Options paper has to do with the
Secretary of State fees.
Senator Raggio:
Would staff explain the
reference to S.B. No. 258 of the 72nd Session?
Mr. Ghiggeri:
S.B. No. 258 of the 72nd Session is a bill with appropriations
for pediatric endocrinology and some other appropriations. The Governor was
going to refer those back to the Legislature for further consideration once the
tax package was developed. Staff has included those appropriations into the General
Fund need as reflected on these sheets. The Secretary of State fees would be a
separate bill from the legislation currently being considered. The revenue
estimates for the Secretary of State fees are included on this sheet.
Senator Raggio:
The motion is to recommend a bill draft with these
provisions, be requested and if so, that the Committee of the Whole will
recommend a do pass on the bill draft which will be designated as S.B. No. 5.
Senator Townsend:
So moved.
Senator Amodei:
Second the motion.
Senator Neal:
Is it possible to take a
roll call vote on this?
Senator Raggio:
Yes. There can be a roll
call vote.
Senator Nolan:
I would ask the maker of the motion and the Senator who seconded
the motion to consider an amendment to their motion to include my proposition
that with respect to the live entertainment tax. That those events projected to
bring in an attendance of more than 2,500 the Department of Taxation be given
the latitude to develop objective criteria by which they can grant an exemption
if the event promoter can demonstrate objectively that the imposition of this
tax would directly cause them to lose the event in a competitive process.
Senator Raggio:
The Chair will accept that as an amendment to the motion before
us.
Senator Coffin:
Second the motion.
Senator Care:
Thank you, Mr. Chairman. It would seem to me that the ultimate
crafters of the tax policy in this State would be the people in this room. I
appreciate what Senator Nolan has proposed, but the standards are ambiguous. It
is up to us to enumerate any exemptions. That is the way it has traditionally
been done. We will be giving unbridled discretion of commission with whatever
we pass out of this legislative House. We should not give them that much. We
are the ones who should be deciding about exemptions. Another problem is that
once you get into exemptions, then everyone wants their exemption as well. I
would be opposed to Senator Nolan’s proposal.
Senator Townsend:
Thank you, Mr. Chairman. The last time we were in this room,
Senator Coffin spoke regarding the issue of competitive events as opposed to
the motion. I respect his view, but it seems to be a challenge to the
Commission on Taxation. Senator Care has made his position clear, and I agree
with him. I would consider a conference amendment from the other House to deal
with it. Senator Coffin’s original contention was a more appropriate one as it
dealt with competitive events that we are trying to encourage to come to this
State. They bring much to the economy. I would not want to see the competitive
event to include “mud wrestling.” One of the goals is to capture live
entertainment for what it is and not for what it is not.
Senator McGinness:
I have a few concerns with
the amendment. The revenue projections would have to be revised. A fiscal note
would be needed, and I do not believe the Department of Taxation is the
appropriate place for this. The Nevada Tax Commission would be more of a
full-time job than it already is. I will oppose the motion.
Senator Nolan:
I can see where this amendment is going. It was hastily crafted
to deal with what I feel is a real issue for a state that lives off
entertainment and special events. It is an important consideration. I will
amend my motion to that which Senator Townsend had articulated and to Senator
Coffin’s earlier proposal to limit it to non-competitive events.
Senator Raggio:
Since we are concerned
about the revenue plan, the bill should include the Committee on Taxation where
the issue could be looked at in the interim by that committee. Is the amendment
to the motion withdrawn?
Senator Nolan:
If it is acceptable, I will withdraw my motion.
Senator Raggio:
Is that agreeable with
Senator Coffin who seconded the motion?
Senator Coffin:
Yes.
Senator Raggio:
It is withdrawn.
Senator Nolan:
I move that we have the live entertainment tax applied to those
events excluding those provisions already enumerated as well as competitive
events.
Senator Raggio:
Before accepting the motion, I have been advised by staff that
whatever we do will affect the projections on the revenue. Is there a second?
Senator Coffin:
Second, I would like to elaborate a little to address Senator
Care’s concerns. We do have ample precedent for the commissions, not necessarily
the Tax Commission, though, they do have a great deal of latitude, but the
Economic Development Commission has on numerous occasions brought forth, using
the protocols set legislatively, what they consider to be eligible projects
whereby they might defer taxation on projects to increase economic activity.
This falls into the same category. This part of the bill could fall into that
same statutory reach as that of the Economic Development Commission. They have
their fingertips on the pulse of what is going on around the country. They know
what they have to compete against whether it is conventions or special events.
As we work our way through this language, we might consider that to be one of
the eligible bodies that might be most appropriate for deciding the exemptions.
That might be a modification of the motion.
Senator Raggio:
Could Senator Nolan
restate the amendment to the main motion?
Senator Nolan:
Mr. Chairman, I will not push a motion which does
not have consensus. I have gotten some direction from Senator Townsend and my
colleague, Senator Coffin. We could include those events already enumerated as
exemptions as well as competitive events.
Senator Rawson:
If we were inclined to
support that, there might be some security that would be offered. The amount of
money projected that would be raised from the live entertainment tax is $46
million. We have $4.7 million in excess of what is required.
Senator Raggio:
The effective date for
non-gaming establishments is January 1, 2004.
Senator Rawson:
There could be a requirement put in place that whoever has the
authority to make this exception or deferment not be able to defer more than 5
or 10 percent of the amount of money raised through the tax. That gives us some
security that we are not going to be out of balance.
Senator Raggio:
We are getting a groan
from staff who are trying to figure out where we are going to be with the
anticipated revenue.
Mr. Ghiggeri:
We would have to reevaluate where we are. We would have to
segregate our competitive events and further define them to determine the
impact on the revenue estimate.
Senator Neal:
I am at a loss trying to understand what has
happened here. I will ask this question to clarify for me where we are going
with this. We have exempted the non-profits, the 501(c)(3)s. What groups are
you trying to reach with this amendment?
Senator Nolan:
I will disclose I am a
member of the Board of Directors for Las Vegas Events, which is an organization
that works to develop events to bring those events into southern Nevada. The
lure of events in southern Nevada is not just the revenue received, not just
the watching of the events themselves, but room revenues, sales tax revenues,
tips and show tickets that go along with the events. I am not looking at one
organization, event or venue. I am concerned that statewide there are some
events negotiated by not-for-profit organizations and by large companies that
book and sell these venues in different parts of the country. This is a
competitive environment. The tax on the rooms booked in advance, the ticket
sales and retail sales are counted on heavily to garner revenue for the State,
but it might also make us non-competitive. We might lose those events. We do
not just lose ticket sales from those events. We lose everything listed. That
is a realistic concern.
Senator Raggio:
I will read from the
proposed language in the bill. This deals with the committee created under the
proposed plan. It would amend NRS 218.53883 to include this language. “The
committee shall review the laws relating to the exemptions from, … and the
distribution of revenue, etc … and also shall consider the purposes for which
various exemptions from taxes were adopted whether any of those exemptions have
become obsolete or no longer serve their intended purpose … ” It continues with
the committee’s authority to review and recommend exemptions. It is my opinion
that anything we try to do now is going to put staff in a difficult situation
to try to determine who is going to be affected by any changes in this
language. I will accept the Committee’s view on this.
Senator Coffin:
I would like to address Senator Neal’s question. It is a policy
question. We have agreed to exempt 501(c) organizations. I am not certain if we
mentioned competitive sports. We are competitive with other venues for those
activities. Boxing promoters are not charitable individuals. Television
networks that sell these fights are not charitable individuals. They will not
fit into those categories. We have to find a broad category that will not name
a specific sport. We want them to bring their fights here. We want to offer an
incentive. Boxing tickets range from $200 to $2,000 a ticket. If you add an
extra $200 to the price of a ticket, it will have a retarding effect on the
sale of tickets. Race and rodeo tickets are also high priced.
Senator Neal:
Who sets the price for
boxing tickets?
Senator Coffin:
I do not know. It could be the promoter. It could be the venue.
It could be shared with the networks. I do not know.
Senator Neal:
It is the promoter and the people who bring boxing in.
Senator Coffin:
I do not know. Chairman Raggio has the right idea. The committee
created in the bill must have the authority, and that is the intent I hope we
make clear today. We may not need a motion at this point.
Senator Raggio:
I asked staff how this
would apply. Let us say there was a boxing event and a ticket was $100 as
example. The 10 percent would apply to the admission of the ticket. The
exemption would exclude the tax on any of the food and beverage sold at the
event.
Senator Coffin:
If what you said is correct, I do not know how the committee
might go on this. There have been some questions. You have indicated this
committee has the authority to do this based on the wording in the proposed
statute. Is it your opinion?
Senator Raggio:
What I was saying is that
we are at a point where it would be difficult and time consuming for the staff
to try to compute what would change on the revenue expectation. My opinion is
that the committee that is included in this plan has broad authority to look at
these things. There is a short interval between now and when we will convene in
a regular session. That committee can be looking at these things in the mean time.
Senator Nolan:
Thank you, Mr. Chairman. I
will withdraw the motion. It is a serious concern that our State must be
competitive in an area where we rely upon this type of revenue. I would like
the staff to consider generating the figures for the revenue differences if
this amendment was put into the bill so that we might deal with it later in a
conference committee. If we do not address this issue, we might end up losing
more revenue.
Senator Coffin:
I will withdraw the second based upon what I thought was
reasonable language from the Chair.
Senator Raggio:
Is there further discussion on the main motion?
Senator Titus:
I am not as smart or as articulate as my colleague, the fine
lawyer from Carson City, but I must speak from my heart. I came to this session
prepared to vote for a broad-based business tax to help pay for education and
to pay to get us off the bottom of every list for quality of life indicator
across the country. I did that when I voted for Senate Bill No. 4. That
provided for a net proceeds tax based on ability to pay. That tax hit gaming;
it hit banks, and it hit retailers and developers. I thought it was a fair,
broad-based tax. I cannot support the proposal before us today. It represents a
classic example of what the majority party’s philosophy is about putting an
extra burden on the little taxpayer and letting the big one off the hook. The
big guys have profited and prospered for at least half of a century from the
resources of this State without paying their share. The negative impact of just
a payroll tax is unacceptable. According to this plan, you will tax a person’s
cigarettes. You are going to tax their bottle of beer or glass of wine. You are
going tax their concert tickets, and then, when they sell their house and try
to move their family to a better neighborhood, you will tax that transaction.
With this, you will add a tax to their wages. I do not think that this is fair,
and I will not vote for it.
Senator Amodei:
I respect the comments of the Minority Leader, and I know she
makes them in a sincere context, but as we look at this, I think our roll is
not about little vs. big.
This discussion on the broad-based business tax started several
years ago about the impacts caused to a growing state by people who paid a wage
that did not allow their employees to access the quality of life and life
services that were necessary to be a resident of this State. We talked about
the living wage, providing health care, allowing people to be productive
members of our society, and when they were not allowed to be that in the
context of wages or benefits, we talked about the impact on the State budget
for us having to subsidize those things. It did not start in notions of little
vs. big. It did not start in notions of income. It started in notions of
employees. It started with a backdrop of a state that had a head tax. The head
tax problem was that it hit everyone at a standard rate regardless of what was
going on with their wages and regardless of what was going on in terms of
part-time employees. When you have a proposal in front of you that catches
part-time employees and allows employers to raise taxes without worrying about
deleterious effects and has the support of all businesses, then you have to
give it serious consideration.
There are two Houses in this Legislature. The passage of this
bill out of this House tonight does not cast anything in stone. It sends a
message that some sort of progress is being made. It is important to focus on
the final few issues that need to be focused on. To continue to do nothing and
to continue to talk in conference rooms where there are no reporters and there
is no theater seating and there is no record of what the discussions are, does
violence to this process which has been going for four or five days. I believe
that needs to stop, and these discussions need to happen in rooms like this
with records so everyone can hear what everyone has to say. That it is done in
the open.
We should vote on this employee-based option with all the history
of the employee factors that go into this. It is an appropriate way to start
progress in what is the most important bill that any of us will vote on in our
legislative careers. We should not be afraid of one or two line items. We
should send it to the other House and let those 42 colleagues engage in the
same process.
Senator McGinness:
To those people who may be
listening on the Internet and to those who think this is a tax on someone’s
paycheck, it is not. It is a tax on employers based on the payroll they pay every
month. It is not another deduction from the worker’s paycheck. It is a tax the
employer has to pay just as they pay unemployment tax now.
Senator Coffin:
With the deepest
admiration to my leader, Senator Titus, who spoke eloquently tonight and to Senator
Amodei, I say that they both make a strong case for their passionate beliefs.
Senator Titus has not forced her ideas upon us as a caucus. She
has indicated that we should do as we see fit based upon our consciences. I
have looked at the options and what the Assembly Democrats have sent to us. I
do not see a great deal of difference between what they sent us and what the
Republican caucus has put together. There are some differences, but we are both
taxing liquor at about the same amount. I do not drink my beer by the gallon,
but I think 14 cents per gallon is reasonable. Thankfully, both Houses have
gotten rid of the business license fee tax. That was the worst vote I ever cast
12 years ago. I am happy to see that go. Both Houses agree about the live
entertainment tax. The Republicans added a 1-percent room tax; the Democrats on
the Assembly have not. They put in a bank franchise fee that I understand to be
a difficult fee to administer. I will disclose my wife is a shareholder and a
member of a board of a bank. They are starting to make money, and they could
afford to pay that if it should be in the final bill. It is not in the bill
before us.
The difference between the employer tax at 1.1 percent, the
Republican proposal, and as I understand the negotiated Assembly tax of 0.65
percent, is 1/2 of a percentage point. Each House is dipping into the
employer’s tax or the employee’s tax. They are both there. Those are the main
differences. I have sat through 135 days of hearings on the budget. I know there
are imperfections in that budget. There is some fat here and there. Trying to
slice that out is tough. You cannot find enough to get the savings needed. We
need this money. We went at this and only failed by one vote the other night. I
do not want to fail again. I will vote for this, and I hope that our colleagues
will support it. I agree there will be more discussions between the Houses.
Senator Raggio:
During all the days of
discussion, we have had an opportunity to consider the views of every Senator
and every Assemblyman. No caucus has united on every point. That is a plus. We
have all tried to resolve the issue within the parameters of a two-thirds
support for a plan. While talking about
a Democrat or Republican plan, the plan before us is a compromise. As Senator
Coffin and Senator Amodei have pointed out, we took parts of both proposals and
tried to accommodate each proposed plan. I agree with the accommodations as to
what is the fairest and most equitable for the people we represent. Those of us
who have been here for any length of time have had to make hard decisions. In
the past, some of us have had to raise taxes. That is never popular.
We will never satisfy everyone in the State with any plan we
propose. If this plan is adopted in this House, it still must go to the other
House. They will go through this same process. I commend each Senator who has
worked to come to a consensus. We may not meet that. I do not know what the
vote on this will be. If it does not pass, we will return to square one and
begin again. We will utilize our time, not because we will be inconvenienced,
but because we do what is best for the State. There are still people who think
we should cut budgets. We have cut the budget from $970 million proposed by the
Governor to $860 million. In doing so, we have exercised prudence. We have
restored part of the stabilization fund. We do not want to be caught in the
same situation we were in during the last biennium where we had to dip into the
fund for $135 million to meet emergencies. In the next biennium, there will be
some major problems. Approximately, $122 million of the funding for K-12 is in
this budget from estate-tax money. The next time we return that money is not
going to be available. That source is being phased out. Any plan we devise will
have to be sufficient but not excessive. We have a budget to fund. It is
already passed. It must have broad-based components involving business and all
sectors, whether in gaming or construction. We are not being unfair to any people.
There will always be sectors that feel otherwise. We need to make an effort to
pass this revenue plan and send it to the other House to give them the
opportunity they need to discuss this issue.
Senator Neal:
Mr. Chairman and members of the Committee, I was
elected 31 years ago. After each four-year term, I pack up my office and go
home. I vote based on conclusions I have made. As I look at this, I think about
the money that is needed for education and for other purposes in this State.
Even though this might not be the plan I would put together, Senator Amodei and
others have done a good job in trying to reach a consensus and in bringing this
before us. I commend them for their effort.
Many of the Senators are not in the same position I am. They are
not financially capable of staying here until “hell freezes over.” However, I
do not want to stay here. I will support this issue so that we may send the
bill to the other House. I will support this package, even those issues I feel
strongly about. There is a group called Redress and Cooperate who will handle
some of the other issues in a petition. They have indicated they are willing to
free the Legislature from the gaming industry by making it illegal for the
gaming industry to contribute to our elections. I support their actions.
I will vote for this proposal and will gladly suffer the
consequences. I am only elected for four years. If I want to come back, I will
let the public know it. If they want to send me back, they can. If they want to
defeat me, they can. That is within their power.
Senator Schneider:
Thank you. I am not happy with this proposal, but it
is like buying a house. We have to buy one. I am a salesman and as I look at
this, unless we keep going, we will never buy the house. This proposal is a
good floor plan, but I do not like the color of the carpet; I do not like the
color of the house; I do like the landscaping; I do not like the window
coverings, but there are things we can change. We should not chisel everything
in stone. We need to push this to the other House. There are people on the
south end of the building who do not want to look at this. We need to keep this
process moving because we need to buy a house. We can make changes, and maybe
we can get the color of carpet we like.
Senator Townsend moved to introduced and do pass the revenue plan as discussed.
Senator Amodei seconded the motion.
Motion carried.
Senators Amodei, Care, Coffin, Mathews, McGinness, Neal, Nolan, Raggio, Rawson, Rhoads, Schneider, Shaffer, Townsend, Washington and Wiener voted yes.
Senators Carlton, Cegavske, Hardy, O'Connell, Tiffany and Titus voted no.
On the motion of Senator Townsend, the committee did rise and report back to the Senate.
SENATE IN SESSION
At 6:04 p.m.
President Hunt presiding.
Quorum present.
INTRODUCTION, FIRST READING AND REFERENCE
By the Committee of the Whole:
Senate Bill No. 5—AN ACT relating to state financial administration; providing for the imposition and administration of an excise tax on employers based on wages paid to their employees; replacing the casino entertainment tax with a tax on all live entertainment; eliminating the tax imposed on the privilege of conducting business in this state; revising the taxes on liquor and cigarettes; imposing a state tax on the transfer of real property and revising the provisions governing the existing tax; revising the fees charged for certain gaming licenses; establishing the Legislative Committee on Taxation, Public Revenue and Tax Policy; making various other changes relating to state financial administration; making an appropriation; providing penalties; and providing other matters properly relating thereto.
Senator Raggio moved that the bill be referred to the Committee of the Whole.
Motion carried.
REPORTS
OF COMMITTEES
Madam
President:
Your
Committee of the Whole, to which was referred Senate Bill No. 5, has had the
same under consideration, and begs leave to report the same back with the
recommendation: Do pass.
William J. Raggio, Chairman
GENERAL FILE AND THIRD READING
Senate Bill No. 5.
Bill read third time.
Remarks by Senators Raggio, Titus, Amodei, Coffin and Neal.
Roll call on Senate Bill No. 5:
Yeas—13.
Nays—Carlton, Cegavske, Coffin, Hardy, O'Connell,
Tiffany, Titus, Wiener—8.
Senate Bill No. 5 having failed to receive a two-thirds majority, Madam President declared it lost.
MOTIONS, RESOLUTIONS AND NOTICES
Senator Neal moved that the vote whereby Senate Bill No. 5 was this day lost be rescinded.
Motion carried.
Senator Raggio moved that Senate Bill No. 5 be taken from the General File and placed on the Secretary’s desk.
Remarks by Senator Raggio.
Motion carried.
Senator Raggio moved that the Senate recess subject to the call of the Chair.
Motion carried.
Senate in recess at 6:22 p.m.
SENATE IN SESSION
At 6:44 p.m.
President Hunt presiding.
Quorum present.
Senator Raggio moved that Senate Bill No. 5 be taken from the Secretary's desk and placed on the General File.
Remarks by Senator Raggio.
Motion carried.
Senator Raggio moved to suspend the Senate Standing Rule No. 41.2 whereby amendments can only originate from the Committee of the Whole.
Remarks by Senate Raggio.
Motion carried.
GENERAL FILE AND THIRD READING
Senate Bill No. 5.
Bill read third time.
The following amendment was proposed by Senator Raggio:
Amendment No. 2.
Amend the bill as a whole by deleting sec. 169.5.
Amend sec. 198, page 113, line 39, by deleting “169.5,”.
Amend sec. 198, page 114, by deleting lines 22 and 23.
Amend sec. 198, page 114, line 24, by deleting “ 9.” and inserting “8.”.
Senator Raggio moved the adoption of the amendment.
Remarks by Senators Raggio and Titus.
Amendment adopted.
Bill ordered reprinted, engrossed and to third reading.
MOTIONS, RESOLUTIONS AND NOTICES
Senator Raggio moved that all rules be suspended, that the reprinting of Senate Bill No. 5 be dispensed with, and that the Secretary be authorized to insert Amendment No. 2 adopted by the Senate, and the bill be made the next order of business on General File.
Motion carried.
GENERAL FILE AND THIRD READING
Senate Bill No. 5.
Bill read third time.
Roll call on Senate Bill No. 5:
Yeas—13.
Nays—Carlton, Cegavske, Coffin, Hardy, O'Connell,
Tiffany, Titus, Wiener—8.
Senate Bill No. 5 having failed to receive a two-thirds majority, Madam President declared it lost.
Senator Raggio moved that the Senate adjourn until Thursday, June 12, 2003, at 10 a.m.
Motion carried.
Senate adjourned at 6:49 p.m.
Approved: Lorraine T. Hunt
President
of the Senate
Attest: Claire J. Clift
Secretary of the Senate