Thursday, August 07, 2003
Copyright © Las Vegas Mercury

Editor's Note: Chewing gum and baling wire

I'm slow sometimes. It takes me a little longer than, say, Jon Ralston or Steve Sebelius to digest information and formulate an opinion. It's also a case of rebeling against the insta-punditry that dominates today's political journalism. So, predictably, I'm bringing up the rear in giving my 2 cents on the Nevada Legislature's $836 million tax package.

For starters, that's a lot of money by any measure, but it's a fraction of what we really need to meet the demands of growth, especially in education. And don't give me that Bob Beers/Review-Journal line about how we should, in fact, be cutting the budget and not raising taxes at all. That's a far greater fantasy than any tax-and-spend orgy we liberals could dream up. Vin Suprynowicz may have visions of privatizing every state agency except the National Guard, but I'm not aware of a single conservative legislator who proposed privatizing the public schools or any large state agency during this session--and thus absolving taxpayers of the cost. And, just for the record, none of them proposed slowing or stopping growth.

And so, if we're going to have public schools and Medicaid and prisons and a motor vehicles department and casino regulation, we need to provide funding for them. And when you have the fastest-growing state, it's going to cost you more every year. You don't have to be able to pass the high school math proficiency exam to understand that.

More important, however, is the persistent question of what kind of state we want to have. Beers and his cronies seem perfectly happy providing education funding at a level that places Nevada 46th in the nation. Our student test scores and dropout rates, not surprisingly, reflect this dismal situation, as does our inability to attract quality businesses (stable industries that pay living wages) to the state. Years ago, Nevada was just happy to be here at all, since it was barely able to justify its statehood. The Silver State's raison d'etre was to serve the interests of the mining industry and, later, the casino industry. Today it's different--or should be. We're capable of leaving the Mississippis, Arkansas and Arizonas in our dust--if only we can get over this frontier era every-man-for-himself mentality and build up enough self-esteem to aim for a seat at the adult table. As Andrew Kiraly's cover story this week effectively shows, our schools can and should be doing a lot more than just treading water.

And yet it's not realistic to grab what we need all at once, so $836 million is a decent victory for now, even if the methods behind the much-ballyhooed "largest tax increase in state history" are flawed. If nothing else, Nevadans need to come away from this legislative session recognizing that this issue is not going away. "We'll be in the same place two years from now, and two years after that," Mike Sloan, senior vice president of Mandalay Resort Group, told the R-J.

Sloan isn't merely speculating. Estimates are that the 2005 Legislature will open for business with at least a $200 million deficit, thanks to the pending demise of the estate tax and a decrease in federal funds.

Tax plan miscellany

¥ Assembly Majority Leader Barbara Buckley, arguably one of Nevada's most intelligent and respected lawmakers, must have been a little loopy after the marathon session when she told the R-J, "The taxes we passed will not go to the individual."

Nothing could be further from the truth. The little guy is getting screwed by this tax plan. He'll pay more for cigarettes, liquor and live entertainment. Businesses and utilities faced with the new payroll tax will pass that cost on to consumers. Businesses facing the payroll tax also will be more leery of hiring more people and giving raises. Although the well-off will pay more for liquor, cigarettes and shows too, the taxes are regressive in nature, meaning the poor will have to shell out a greater share of their income for life's indulgences and necessities.

This is nothing new, of course. It's nearly impossible to craft a tax that doesn't trickle down to the average guy in one way or another. What's troubling is that Buckley thinks she can put this kind of positive spin on the tax plan. I sure hope this isn't the line the Democratic Party tries to sell in the next campaign.

¥ Small businesses are getting screwed, too. The governor's gross receipts tax would have exempted most small businesses. The Legislature's payroll tax will be paid regardless of size or profit. "The winners are out-of-state businesses, capital-intensive businesses and big businesses," says Jeremy Aguero, a tax expert who assisted the governor's tax task force in formulating its plan, which was all but ignored by the Legislature.

¥ Despite the $836 million revenue hike, the anti-tax caucus that includes the Assembly's "Mean 15," the Las Vegas Chamber of Commerce and assorted other right-wing groups are feeling pretty good right now. They shouldn't get too confident. They seem to think the majority of voters are on their side, but that depends on how the poll questions are asked, and it won't mean a whole lot come election time. First of all, voters can't forget that the "Mean 15" were prepared to vote for more than $700 million in tax increases. And second, the revenge of the casino industry and its political militia, the Culinary Union, will not be pretty. The chamber is already taking some hits. The behemoth teachers union and local parents can't be too happy either.

So, the tax debate isn't going away. Oh, we'll get a little break--sheer mental exhaustion demands it. But before long we'll be talking about how the 2005 Legislature faces a tough task to balance the ballooning state budget by fixing Nevada's half-assed tax system. Mark your calendar.

--GEOFF SCHUMACHER