News
Opinion
ENLARGE
With the media focused on the unprecedented spendathon going on in Washington, some of the antics of our home-grown legislators in Carson City are occurring beneath the radar.
The year 2009 features some eerie parallels to the 2003 legislative session when the budget and taxes dominated the scene. That year Republican Gov. Kenny Guinn began a public relations campaign to raise taxes premised on the theory that there is a “structural defect” in Nevada’s taxation system that needed to be fixed. Guinn owed his election largely to the gaming industry and their idea of fixing the “structural deficit” was to enact a gross business receipts tax. Why? Because that’s how casinos are taxed and they wanted everyone else to feel their pain any time tax increases came up for discussion.
So the then Republican governor wanted to raise taxes, the then Republican Senate was compliant, but among the majority Democrat Assembly were 20 Republicans, 16 of whom were convinced that any kind of general gross business receipts tax would drive businesses out of Nevada to tax-friendlier states. One of the worst evils of such a tax is that it hits whether or not a business is profitable. Sixteen rock solid conservative Republicans were enough to turn the tide in this case because in Nevada tax increases require a 2/3 vote. After a full legislative session, a trip to the Nevada Supreme Court, a trip to federal district court and two special sessions a multi-faceted tax increase was approved but the gross business receipts tax was scuttled.
By the time the 2005 legislative session rolled around the state had too much money and Governor Guinn engineered a tax rebate to every Nevadan who owned a vehicle registered in this state. Go figure.
Fast forward to 2009 and we have sort of the reverse situation. Both houses of the legislature are now controlled by Democrats and the governor is a Republican who has signed the taxpayer protection pledge (“No new taxes”). Gibbons had to make the first move by submitting a budget in an economy that is challenging, to put it mildly. With diminished tax revenues projected and Nevada’s current rate of spending his budget was $2 billion upside down. So he required all departments to submit drastically reduced sub-budgets. That brought out many public agency heads and many Democrats calling down curses on Gibbons’ head and heatedly condemning spending reductions, particularly in social welfare and education.
We are now about 25 percent of the way through this legislative session and although the same folks continue to criticize Gibbons’ proposed spending cuts no one, not one legislator has come up with any alternative. With Democrats in control you would think there would be all sorts of suggestions for taxing the fat and rich. But Nevada’s a strange and tax-averse state. The first Solon to articulate any tax increase knows he or she will trigger an avalanche of criticism from trade associations, lobbyists and special interests including public relations campaigns in the legislator’s own district aimed at getting constituents to vote for someone else next election. Because of this the “t-word” is taboo and the most sacred secrets in Carson City are draft proposals to increase taxes.
When will we see such proposals? With legislators in a vice between screaming agencies who want their budget cuts restored and a buzz saw of adverse publicity just waiting to be administered by special interests who don’t want to pay for such restorations, these proposals have historically hit the fan just before adjournment, and they usually get brokered through around midnight of the last day.
Let’s see if that holds true this session.
Jim Clark is President of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee. He can be reached at tahoesbjc@aol.com.
The year 2009 features some eerie parallels to the 2003 legislative session when the budget and taxes dominated the scene. That year Republican Gov. Kenny Guinn began a public relations campaign to raise taxes premised on the theory that there is a “structural defect” in Nevada’s taxation system that needed to be fixed. Guinn owed his election largely to the gaming industry and their idea of fixing the “structural deficit” was to enact a gross business receipts tax. Why? Because that’s how casinos are taxed and they wanted everyone else to feel their pain any time tax increases came up for discussion.
So the then Republican governor wanted to raise taxes, the then Republican Senate was compliant, but among the majority Democrat Assembly were 20 Republicans, 16 of whom were convinced that any kind of general gross business receipts tax would drive businesses out of Nevada to tax-friendlier states. One of the worst evils of such a tax is that it hits whether or not a business is profitable. Sixteen rock solid conservative Republicans were enough to turn the tide in this case because in Nevada tax increases require a 2/3 vote. After a full legislative session, a trip to the Nevada Supreme Court, a trip to federal district court and two special sessions a multi-faceted tax increase was approved but the gross business receipts tax was scuttled.
By the time the 2005 legislative session rolled around the state had too much money and Governor Guinn engineered a tax rebate to every Nevadan who owned a vehicle registered in this state. Go figure.
Fast forward to 2009 and we have sort of the reverse situation. Both houses of the legislature are now controlled by Democrats and the governor is a Republican who has signed the taxpayer protection pledge (“No new taxes”). Gibbons had to make the first move by submitting a budget in an economy that is challenging, to put it mildly. With diminished tax revenues projected and Nevada’s current rate of spending his budget was $2 billion upside down. So he required all departments to submit drastically reduced sub-budgets. That brought out many public agency heads and many Democrats calling down curses on Gibbons’ head and heatedly condemning spending reductions, particularly in social welfare and education.
We are now about 25 percent of the way through this legislative session and although the same folks continue to criticize Gibbons’ proposed spending cuts no one, not one legislator has come up with any alternative. With Democrats in control you would think there would be all sorts of suggestions for taxing the fat and rich. But Nevada’s a strange and tax-averse state. The first Solon to articulate any tax increase knows he or she will trigger an avalanche of criticism from trade associations, lobbyists and special interests including public relations campaigns in the legislator’s own district aimed at getting constituents to vote for someone else next election. Because of this the “t-word” is taboo and the most sacred secrets in Carson City are draft proposals to increase taxes.
When will we see such proposals? With legislators in a vice between screaming agencies who want their budget cuts restored and a buzz saw of adverse publicity just waiting to be administered by special interests who don’t want to pay for such restorations, these proposals have historically hit the fan just before adjournment, and they usually get brokered through around midnight of the last day.
Let’s see if that holds true this session.
Jim Clark is President of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee. He can be reached at tahoesbjc@aol.com.
