Raggio says Some form of immediate tax increases necessary and soon

Senate Majority Leader Bill Raggio, R-Reno, said Friday he's backing Gov. Kenny Guinn's call for immediate tax hikes to cover this year's budget shortfall.

"Staff tells us the shortfall for this fiscal year could possibly be funded if we used all the money available in the stabilization fund," he said. "But if there was even a minimal glitch we would be under water."

He said if other members of the Legislature disagree with the tax increases Guinn has proposed, they should come up with alternatives, but to raise any money they have to act quickly.

"Very soon," he said. "We're talking days, not weeks."

Guinn has called for increases in alcohol and cigarette taxes, the per-employee Business Activity Tax and slot route fees effective April 1 to raise some $80 million this fiscal year.

He said changes in the tax structure for the long term are a completely different issue. If war or some other problem occurs that cuts state revenues more, the state will run out of cash before the end of the fiscal year.

"We need something immediately," Raggio said.

"Everybody will have to determine if they want the state to be fiscally sound. We can't write bad checks."

His comments followed Thursday's hearings on the proposed "bridge" taxes before the Senate and Assembly taxation committees. It became clear in those hearings that a substantial number of lawmakers would rather avoid the immediate increases in the hope the state can get through until June 30 without them.

Guinn, Treasurer Brian Krolicki and now Raggio all say the delay would be extremely risky -- especially given the chance the U.S. will go to war with Iraq. A war, all agree, would cause another big dip in Nevada's tourism revenues, causing an even greater shortfall.