Governor Brian Sandoval is pushing for lawmakers to approve more than one billion dollars in tax and fee increases to fund the state’s education system.
But a report by the Tax Foundation criticized his budget and angered the usually mild mannered Republican governor.
Sandoval says he was disappointed in the Las Vegas Metro Chamber of Commerce after it commissioned then supported the report critical of proposed tax increase. He called the report "utterly irresponsible, intellectually dishonest and built upon erroneous assumptions."
"I know I'm not alone in expressing my disappointment in the chamber's judgment especially for an organization that repeatedly claims to want to move Nevada forward," Sandoval said in a statement.
The Las Vegas Metro Chamber of Commerce and Tax Foundation have worked together in the past to study different tax proposals. The Tax Foundation's report denounced Senate Bill 252 and Sandoval's business license fee as the "13 million percent tax."
Joseph Henchman, vice president of state projects at the Tax Foundation, told KNPR's State of Nevada, their "mission here is to inform about the good and bad of tax policy and that is what are report was about."
Henchman didn't back down from the report's claims that Sandoval's tax is complicated, not transparent and potentially violates the Constitution and federal law. He also repeated the claim of the business license fee equaling a 13 million percent tax.
"It's got 67 revenue ranges for 27 different industries which are selected arbitrarily," he said. "The plan is so badly designed that is has very high marginal tax rates topping out at 13 million percent."
Henchman said that is "for one more dollar of revenues you earn, you owe a 130 some thousand dollars in taxes." he said that is not "something that is usually done in designing tax policy."
Sandoval also described the release of the report as a "stunt." The governor said it shows that "for us who are working in good faith to solve Nevada's education challenges, it removes all doubt about where the Las Vegas chamber stands."
Sandoval said he believed the chamber had done "a terrible disservice" for its members. KNPR asked chamber spokeswoman Cara Clark to discuss the report and its impact on the chamber, but they declined to appear Monday on KNPR's State of Nevada.
Henchman said it was hard for him to answer the governor's criticism, because he didn't provide any details with his statement.
"We put our analysis together based on what is in the bill, and what's in the documents and what's in the testimony," Henchman said. "If we are wrong about something, it hasn't been revealed yet."
The Tax Foundation was hired by the Las Vegas Chamber to study Nevada's tax structure. The Washington, D.C. -based group released a book of suggestions in January, where it recommended, among other tax ideas, to implement a sales tax on services and eliminate the small business protecting exemptions in the payroll tax.
The business license fee is just one part of Sandoval's $7.3 billion budget request, the governor's office estimates it would raise some $437 million over two years.
Joseph Henchman, vice president of state projects, Tax Foundation
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