KNAPPSTER George Knapp is a longtime reporter and anchor for KLAS Channel 8.

Thursday, January 23, 2003
Copyright © Las Vegas Mercury

Knappster: What kind of Nevada do we really want?

By George Knapp

CARSON CITY--Knives, machetes and meat cleavers are already being sharpened within the ranks of Nevada's fiscal conservatives and rabid anti-tax forces in response to Gov. Kenny Guinn's State of the State address. The billion-dollar revenue package unveiled by the governor this week must look like a big, juicy tenderloin to legislative tightwads who derive philosophical, if not personal, pleasure from slicing, dicing and carving up bloated budget items, especially those involving bleeding-heart social programs.

The general feeling up here is that only a Republican governor could have pulled off a proposal like the one Guinn uncorked. A Democrat may have had the moxie to give it a try, but likely would have been chopped into tiny pieces, castigated as the rantings of yet another tax-and-spend liberal. Guinn brings to the table solid credentials as a pro-business numbers cruncher, a budget wonk who cut and cut and cut during his first term. The Skinflint Lobby will have a much tougher time trying to pin Guinn with the dreaded "tax and spend" label than they would with, say, a Democrat. (The Reno Gazette-Journal compared Guinn's gambit to Richard Nixon's visit to China, saying that only an anti-commie Republican could have pulled that one off.)

I had a chance to speak with Sen. Ann O'Connell following the State of the State speech. O'Connell is perhaps the most fiscally conservative member of the Legislature, but is widely respected by members of both parties because of the consistency of her positions and the honesty of her research. O'Connell thinks Guinn's proposed business taxes will destroy Nevada's reputation as a low-tax, business-friendly environment. Certainly she is right to an extent. A billion-dollar tax increase will alter our image, but does it really matter?

For as long as I've lived in Nevada, state and local politicians have been blabbing about "economic diversification," about attracting new business, about lessening our dependence on gaming and tourism. Somehow, we have never quite managed to evolve into a second Silicon Valley. Sure ,weve attracted an occasional warehouse operation or marshmallow factory or other low-tech, labor-intensive business, but gaming and tourism are more dominant than ever, and economic diversification is nothing more than a pipe dream.

Our low tax rates have failed to alter the economic landscape. They have allowed those companies that are here to cruise along with relatively meager contributions to the community around them. Big business, in particular, has had it pretty sweet in Nevada for a long time, and for a long time the consequences have been easy to se for those who cared enough to take a look.

We've all seen the parade of news items over the years. Nevada ranks last or close to last in almost every measure of social well-being. Our dropout rate, teen pregnancy rate, suicide rate and per-pupil spending rates are all at the bottom of the barrel. We keep growing and growing like a bat out of hell but our leaders keep managing to dodge the obvious--more people require more services, and more services require more spending. Simple as that.

It is absolutely scandalous that a state as prosperous as ours does not provide textbooks to all students in our public schools. It is appalling that our teachers must dig into their own pockets to provide the most basic supplies for their overcrowded classrooms. It is ridiculous for us to suggest that we could ever be another Silicon Valley when students in our schools must stand in line to get a few meager minutes of time on a computer.

Maybe it's true that our low tax rates will help to atract a few new companies to our state. After all, California's economic situation is probably worse than our own. But ask yourself this question--what kind of company would relocate to Nevada solely because of our tax rates, knowing full well that the labor pool here is poorly educated and exhibits far higher degrees of social and personal problems than almost any other in the country? In all likelihood, such a company would be one that doesn't require an educated work force--in other words, a company that offers low-paying, dead-end jobs. Whoopee, we can't get enough of those. (I would wager that even if all of Guinn's business taxes become law, Nevada still would maintain significant tax advantages over California.)

Critics of government spending are fond of reminding us that merely throwing money at a problem won't guarantee its solution. That's true. More money, for example, won't guarantee an excellent education system. But it's certainly true that an absence of money will guarantee a crummy one. How, for example, do you teach computer literacy without computers?

Try to think of a single thing in Nevada that is better today than it was 20 years ago. Sure our taxes are low, but what about our air, our water, our roads and traffic, our schools, our medical care? Please. We continue to grow, but for every new arrival, our quality of life continues to slip because we've been unwilling to spend the money to keep up with all the new residents. There is only one way to change this pattern--and it isn't through illusory budget cuts. Budget cuts will not erase the vast per-pupil spending disadvantage faced by our schools.

Guinn's proposed spending plan will likely take some hard hits during the coming months. There will be cuts and changes, probably some big ones. But at least someone has finally stepped up to the plate to state the obvious. I don't think most of us want to live in a state that is friendly to business but unfriendly to people.