Governor Brian Sandoval delivered testimony during a joint committee hearing Wednesday for his plan to increase business license fees in order to raise money for K-12 education. Reno Public Radio's Michelle Bliss reports.
Despite wide support for improving the state's lagging education system, Sandoval is charged with convincing a Republican-controlled legislature to raise taxes for the cause.
In a rousing speech, Sandoval made his case, saying economic development will suffer if the state can't create more revenue and devote it to students.
"It will do no good to bring innovative and breakthrough industries to our state," Sandoval said, "if we cannot provide the educated workforce to fill the employment opportunities that they bring. One can only estimate the economic loss and opportunity loss due to companies that simply choose not to come to Nevada."
Sandoval's plan would turn the state's flat annual fee of $200 for business licenses into a tiered system, with companies paying anywhere from $400 to $4 million each year, depending on their amount of revenue and type of industry.
The change would raise $437 million dollars in two years and is part of Sandoval's larger plan to collect more than a billion dollars for education through either new or extended taxes.
Wednesday's hearing is already being described as "historic" with the state's current governor joined in testimony by three former governors, including Republican Robert List. He served in the early '80s and says Nevada's tax structure has changed very little since then.
"Our revenue sources remain heavily dependent on sales, gaming, and mining," List explained, "but they no longer deliver a revenue stream that matches our dynamic, changing population growth and economy which has dramatically moved as our tax structure has grown obsolete."
During his testimony, List called Nevada's education system an embarrassment and urged lawmakers to act, instead of continuing to kick this can down the road.
"I'm not here to say that Governor Sandoval's proposal is necessarily the only or the best approach," List said. "If you don't like it, what do you suggest we do?"
Opponents of Sandoval's plan include the Keystone Corporation, a taxpayer advocacy group. While the organization applauds Sandoval's desire to fund education, representatives are against imposing more taxes on companies, which they say will damage Nevada's business-friendly climate.
A conservative think tank called the Nevada Policy Research Institute is also against the measure. Spokesman Victor Joecks says it would send teetering companies out of business:
"It would also create tax pyramiding where a tax is assessed many times on the same product during the production process. This encourages companies to consolidate, violating the good taxation process of neutrality."
Lawmakers are considering alternative budget proposals as well, including one just introduced Tuesday by Democratic Senator Pat Spearman. It would generate just as much revenue as Sandoval's plan, but Spearman instead suggests collecting taxes on gross receipts for businesses when they exceed 25,000 in a quarter.
