A recent proposal has been submitted by Nevada Governor Brian Sandoval which would impose new business licensing fees to fund education. The board of directors of the Las Vegas Global Economic Alliance submitted a resolution of support for the initiative, although there is some concern it might deter some companies from other states in setting up shop in Nevada.
A study showed that business would be least impacted among three revenue-generating proposals. The governor’s 200-page document, Senate Bill 252, was introduced by Majority Leader Michael Roberson went into greater detail about the proposal on March 18. Sandoval is looking to impose fees based on a business’ gross receipts, anywhere from $400 per year up to $4 million, even though no current business would meet the $4 million threshold.
Ray Specht, the alliance board’s leader, and vice chairman of Toyota Financial Savings Bank said, “We know that high-wage businesses overlook Southern Nevada because we lack a highly educated workforce.” Some studies show that Nevada’s public education ranks dead last in the country, and has for three consecutive years, something the state is desperately hoping to change.
Specht went on to say, “The LVGEA recognizes that it is imperative to start at the beginning and both reform our K-12 education system and pay for programs that will create a workforce that will be competitive in the 21st century global economy.” The study, conducted by Susanne Trimbath, chief economist at STP advisory Services, analyzed all three educated-funding proposals which cross Sandoval’s path.
An estimated $250 million per year will be raised in business fees according to the administration, but not all groups are in support. The Retail Association of Nevada insists on tweaking Nevada’s modified business tax instead, a levy assessed on payroll, instead of taxing gross receipts.
Currently, the business tax brings in roughly $68 million annually, but some economists suggest the number could get nearly $400 million higher per year by the elimination of exemptions and raising the tax rate to 2 percent for businesses.
