Tax Panel Produces Substantial Results

May 09, 2002 - Sometimes it's nice to be proved wrong - even for know-it-all pundits.

No one has been more cynical than i about the Governor's Task Force on Tax Policy, erected by Kenny Guinn and the 2001 Legislative putatively to study the state's revenue structure.

Many times I have posited the theory that the governor and the Gang of 63 set this panel up for the reason most interim studies are passed - so public officials can avoid making decisions for as long as they can. I was right about that part of it - the completion date for the study is Nov. 15, which conveniently is after the governor and lawmakers face voters.

But what I was too cynical in believing is the tax committee would simply be a meaningless tool for the members to do a lot of jabbering and debating, but wouldn't produce much substance.

I feared it would not produce anything new, simply go through the motions and recommend after the election what everyone already knew; More money is needed for education and social services and the tax structure must be broadened, probably with a business tax.

On this speculation, I am happy to say my crystal ball was cracked.

Preliminary indications are the panel itself actually is proceeding methodically through an extensive analysis of how the state raises money, with members asking the right questions but, more importantly, the technical experts collecting the most impressive array of data about taxes that this state has seen.

And this state has seen many of them - there have been more tax studies in Nevada than brothels.

What's even better is if you're in business and want to see just how the state raises money, or you're just any average Joe sitting at home and wanting to know more, the data is readily accessible.

If you want to see some of the work that's being done, it's posted on a website - www.appliedanalysis.com. Click on the "Documents for Review" or the "Analyses in Progress" tab and you will find a wealth of information that not only lays out how the state of Nevada raises money from an array of sources but ultimately will provide irrefutable proof that the tax base needs to be shored up.

Tax panel Chairman Guy Hobbs, who knows these numbers as well as anyone, said recently in his inimitable budgetspeak that what must be ameliorated is the "degradation of the base."

That is, the foundation of the state's revenues has been deteriorating for some time because it is so narrow and because parts of it - exemptions in the sales tax, for instance - are continually eroded.

A few excellent reference documents already posted on the website use a complex but still accessible scoring system to analyze the various revenues from sales tax to net proceeds of mines to gaming taxes.

Each of the revenue sources are evaluated based on factors such as how much revenue they generate, how predictable they are, how fair they are and how stable they are.

Each one is then given an average score and the total amount of revenue is listed. The most recent document to fully analyze each tax in the state is listed on the website under "Review of Major Revenue Sources" in the "Analyses in Progress" section. It's worth looking at because of the amount of information compiled and the thoroughness with which it has been analyzed.

The impressive work here is almost enough to change my cynicism about what will happen once the politicians get this data during Session "03.

Maybe they won't be crippled by their own cowardice and actually use the data to justify some very tough decisions about the future funding of Nevada.

Sorry, folks, but I'm not quite ready to limit the error of my ways on that one just yet.

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Article Copyright ©: J. Ralston, In Business Las Vegas