Construction Unions Lobby for Tax Increase

(Sean Whaley/Nevada News Bureau) – Construction industry groups advocating for a tax increase to fund public works projects around the state to help put people back to work made their pitch to a legislative committee today, but the Building Jobs Coalition proposal faces opposition from Gov. Brian Sandoval.

More than 100 construction workers, some of whom have been looking for work for the past two years, marched around the Legislative Building before crowding into a hearing room to support the plan.

The coalition notes that over the past three years, the construction industry has lost 54,900 jobs in Las Vegas and 12,000 in the Reno-Sparks area.

Sen. Ruben Kihuen, D-Las Vegas, chairman of the Senate Select Committee on Economic Growth and Employment, said at the start of the hearing that creating jobs in Nevada is the No. 1 priority for the 2011 Legislature.

Steve Holloway, executive vice president of the Associated General Contractors of Las Vegas, told the panel the Legislature has the chance to address the underlying economic crisis or “simply exacerbate the problem by applying another short-term fix as was done in the two previous legislative sessions and as the newly elected governor proposed in his State of the State address.”

Holloway said Sandoval’s plan to use $425 million in excess school bond reserve funds to help fund school district operating budgets will conservatively result in the loss of 5,000 more private sector jobs.

But much of the Building Jobs Coalition plan, which calls in part for the creation of a Nevada Job Bonds Support Fund, a stable, dedicated revenue source for capital construction projects, is in conflict with Sandoval’s opposition to any call for new taxes or fees.

The coalition says one option lawmakers should consider for creating such a fund would be a tax increase, either a one-quarter of a cent sales tax, a ten cent property tax levy, or an “infrastructure” surcharge imposed on all licensed vehicles.

When the coalition first released its plan last month, the Sandoval Administration responded: “The governor supports the goal of job creation, but believes it is best accomplished by private sector growth. The strategy of spending public money we don’t have may yield short-term gains for some, but do long-term damage to the economy as a whole.

“Since this is the first we’ve heard of the proposals, we are reviewing them with interest. The governor’s top priority is building and fostering a business environment which creates new jobs without adding to the tax burden or spending money Nevada doesn’t have.”

Most Republican lawmakers are also opposed to any tax increases being considered this session, putting the jobs proposal on a rocky path to success.

Senate Majority Leader Steven Horsford, D-Las Vegas, has embraced the plan, saying it would build on a similar measure passed in the 2010 special session which lifted the sunset on a temporary sales tax increase that was passed by voters in 2002. The revenue projected as a result of the repeal was used to issue bonds to construct public works projects.

Horsford today noted that former Gov. Jim Gibbons, who also advocated against any tax increases in his term, supported the measure.

Horsford said SB5 generated $169 million for 20 infrastructure projects that have created 2,500 private sector construction jobs.

In his opening remarks at the start of the session Monday, Horsford said: “I call on this Legislature to make the Creating Nevada Jobs Initiative a top priority within the first 30 days of this session, and the governor should sign it so we can quickly put as many as 5,000 Nevadans back to work. It can be done.”

Two of the handful of lawmakers who voted against SB5 last year include Sandoval’s Chief of Staff Heidi Gansert, who was Assembly minority leader at the time, and Sen. Don Gustavson, R-Sparks, who was in the Assembly at the time. Gustavson is a member of the Senate select committee.

Some of the projects the coalition says are ready to build include a new county jail for Churchill County at a cost of $50 million, and flood control improvements on the Muddy River in Clark County at a cost of $40 million to $50 million.

The private sector construction industry in Nevada is not expected to recover anytime soon.

Jeremy Aguero, principal analyst with the Las Vegas firm Applied Analysis, told the panel there won’t be another major hotel-casino project built on the Las Vegas Strip for the next seven to 10 years.

Members of the coalition include the Associated Builders and Contractors, the Builders Association of Northern Nevada, Electrical Workers Local 401, the National Association of Minority Contractors and many others.