(Nevada News Bureau) – A legislative panel today decided to seek clarifying information before selecting a proposal to study Nevada’s revenue structure.
Eight proposals were submitted by an Oct. 1 deadline from organizations both within Nevada and across the country.
However not all of the proposals, which range in cost from $32,200 to $909,861, were complete in providing all of the information sought by a working group of the Legislature’s Interim Finance Committee. Lawmakers directed staff to seek itemized costs for six of the eight proposals that did not provide the details.
The panel will meet again Oct. 15 to move forward, either by selecting one proposal or by ranking them in order of preference for the full IFC to consider.
Senate Minority Leader Bill Raggio, R-Reno, chairman of the working group, said he would prefer to recommend a single proposal, although that decision will be made by the entire eight-member panel, five of whom are Democrats.
A tax and revenue study is needed, but it must be free of bias if it is to serve any useful purpose, he said.
“There have been a lot of studies, but they all have some special interest that is funding them or directing them, and that is what I don’t want to see,” Raggio said. “I want to see an objective study that has at least some credibility.”
The decision by the Legislature to study the tax issue does not automatically mean there will be a push for a tax hike in 2011, Raggio said. But the next Legislature will face enormous challenges, given the fact that a $2.4 billion funding shortfall over the current budget has already been identified, he said.
The shortfall estimate is derived from a variety of factors, including tax increases approved in 2009 that are set to expire in 2011 and one-time federal stimulus funding that won’t continue into the next budget cycle.
The legislative working group did recommend that no more than $500,000 be spent on the study, but Senate Majority Leader Steven Horsford, D-Las Vegas, also a member of the working group, said the decision ultimately will rest with the full 24-member IFC.
The working group can negotiate with any of the submitters to bring the cost down, he said. There are also a number of proposals below $500,000 from contractors who may very well be able to produce the type of study lawmakers need to move forward.
“This is not an exercise in spending money,” Horsford said. “We want to pick the most qualified contractor who can evaluate our options for the upcoming legislative session.”
The costliest proposal was submitted by the Center for Regional Studies at the University of Nevada, Reno. The other proposal in excess of $500,000 was for $544,082 from the Center for Tax and Budget Accountability based in Chicago, Ill.
The Board of Examiners, made up of three executive branch officials including Gov. Jim Gibbons, will also vote on the proposal, including the contract cost, next month. But Legislative Counsel Brenda Erdoes told the working group that the IFC has the ultimate authority to determine how much should be spent on the study.
Funding for the study was rejected by Gibbons in the 2009 legislative session. The Legislature is instead using funds available in its contingency fund.
The study is required to be performed by a qualified and independent consultant and will examine the allocation of tax revenues between the state and local governments, the adequacy of revenues and the stability of different tax revenues, among other issues.
A panel of citizens, not yet appointed by the Legislature, will also participate in the study process.
A report is due to the Interim Finance Committee by July 1, 2010.