Nevadans propose higher taxes on tobacco, liquor and gold mines

By CATHY BUSSEWITZ 2009-3-19 18:24:04

Nevada lawmakers were urged Tuesday to increase "sin" taxes on liquor and tobacco and on Nevada's gold mining industry to help make up for a huge revenue shortfall in the proposed state budget for the coming two years.

AB277, heard in the Assembly Taxation Committee, would raise taxes on alcoholic beverages by as much as 300 percent, although Assemblyman Bernie Anderson, D-Sparks, said that would be "the equivalent of a nickel a drink or less."

Anderson estimated the plan would increase the price of a bottle of wine about 21 cents while the cost of a 6-pack of beer could go up by 30 cents — but critics said the price of a 6-pack would be more likely to increase by a dollar.

Anderson said the plan would generate about $153 million over the next two years. Half of the money collected would go to counties to cover costs of genetic marker testing. The rest would go to state programs that help people overcome drug or alcohol addictions.

Opponents of the tax increase packed the hearing room, with many saying that they liked the idea of the programs but not the funding stream.

"When taxes are increased on alcohol, volume and sales do decrease," said Stephanie Shah, representing Anheuser Busch. She added that the beer industry would probably lose 400 jobs as a result of the increase.

"The problem I believe that we have with the funding, like you have with any excise tax, is that it doesn't always bring what you expect," said Alfredo Alonso, representing the Nevada Beer Wholesalers Association and Southern Wine and Spirits.

Many spoke in favor of the bill, because of their desire for more genetic testing and their belief in the success of addiction treatment programs.

Renee Romero, crime lab director for Washoe County, said that current law requires convicted felons to pay a $150 fee "to the best of their ability" to pay for genetic testing, but they often don't pay, and authorities generally collect only 10 percent of what they're owed.

"We have a superior investigative tool that's helped us in a number of cases," said Tim Kuzanek, representing the Washoe County Sheriff's Office. "But we really don't have a stable funding stream."

Assemblywoman Sheila Leslie, D-Reno, who introduced AB255, the tobacco tax increase, said it would increase the cost of cigarettes by "about a dollar a pack." The money would be used to fund prenatal care for pregnant mothers, and to expand the eligibility pool for Medicaid.

"I am sick and tired of not being able to fund essential health services," said Leslie, who said that her father died of lung cancer 15 years ago.

Proponents also said the tax increase would help deter children from smoking.

The Nevada Taxpayers Association opposed both measures, saying that they oppose "earmarks," or rules that state a certain tax should fund a certain budget item.

Financial analyst Jeremy Aguero said that after a 128 percent tax increase in 2003, sales of cigarettes packs per month fell by about a million packs, but revenues collected from the tax doubled. When beer taxes were raised 78 percent in 2003, monthly sales actually increased. Consumption of liquor also increased after the taxes, contributing to a near-doubling of revenue collected from those taxes.

Outside the Legislature, the Progressive Leadership Alliance of Nevada called for lawmakers to increase taxes on the mining industry, and announced a radio advertising campaign to urge Nevadans to contact legislators and "demand Nevada's gold mining industry pay its fair share of taxes." Organizers said they aimed to counter the efforts of the mining industry's 21 lobbyists.

"The majority of mining revenue escapes taxation because of all the deductions mining is allowed to take," said Bob Fulkerson, PLAN director. "It is time that the net proceeds reported reflect reality, and those proceeds are taxed at the 5 percent rate specified in the Nevada Constitution."

From seattletimes