Government affairs
The 75th session of the Nevada Legislature finished early on the morning of Tuesday June 2nd and soon thereafter your government affairs team from McDonald Carano Wilson was on their way home from Carson City. It was one of the most difficult sessions in recent memory because of the dynamics of the worst economy that Nevada has seen in a very long time and the challenges of balancing a budget under those extraordinary circumstances.
The Carson City team assisted by the great work of the very active Government Affairs Committee had to review 999 bills, and identified 35 Assembly and 22 Senate bills that were of particular interest to NAIOP. Those bills contained issues as diverse as energy legislation, actions related to prevailing wage, the requirements for OSHA training, the subdivision of land and maps, and providing for the preservation of neighborhoods. Of those 999 bills, 482 bills became law and 18 bills that NAIOP was actively engaged in were signed by the Governor.
The biggest issue that dominated the entire session was the budget and if taxes were going to be needed to fund it. The Legislature received a $6.1 billion budget from the Governor that in order to meet his promise of no taxes and be balanced included many substantial cuts. The Legislature ended up restoring many of the program cuts, but also had the benefit of a larger amount of federal stimulus dollars than the Governor expected to be available when he had crafted his original budget. However the Legislature also had to deal with much lower revenue projections than that which the Governor based his budget on.
All in all, with the program restorations, reduced revenues and stimulus money, the Legislature had to pass a tax increase of $781 million dollars to balance the budget. The biggest portion of that tax plan was found in SB429. It consisted primarily of five parts that may affect NAIOP members. The state chose to increase the State Business License Fee from $100 to $200. They also revamped the Modified Business Tax (payroll or MBT) . Existing law imposed an excise tax on certain businesses other than financial institutions at the rate of 0.63 percent of the total wages paid by the business each calendar quarter. SB429 changes that rate to 0.5 percent for businesses paying a payroll of $62,500 per quarter to a rate of 1.17 percent on the amount paid in excess of $62,500 each quarter. The Legislature also increased the Sales Tax by 35 cents. The remainder of the tax bill deals with what is known as the Government Services Tax (GST) which would affect NAIOP members if they own vehicles or maintain vehicle fleets. The legislation slows that depreciation rate by 10% per year.
The NAIOP Government Affairs team was also concerned with the shifting away of property tax revenue from local governments to the state. For Clark County, that equals approximately $114 million in revenues over the biennium that will not go toward needed services throughout the valley. NAIOP has always been supportive of the need for local government services. What remains to be seen is whether the county will have to cut services, or try to raise fees as we have seen the City of Las Vegas attempt to do as their revenues have lagged.
Your NAIOP members who were actively engaged in advocating on behalf of NAIOP during the session felt good about how the voices of NAIOP made a difference in those legislative issues of importance. We continue to make a substantial impact because our collective voice is measured, thoughtful and respected.
By McDonald Carano Wilson
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