Left Brain/Right Brain: The governor's $300 million tax rebate

James: On Jan. 24, Gov. Kenny Guinn reported that the state of our state is very strong. Strong enough, apparently, that even after funding necessary priorities and rebuilding Nevada's "Rainy Day Fund," he proposes that the people get a DMV registration rebate totaling $300 million. Which, given all the trouble he went to to roll an $833 million tax hike over the public in 2003, seems only fair. If the state had budgeted to take economic slumps--and booms--into account, they wouldn't have had to do that in the first place.

Lisa: Gov. Guinn impresses me as a man who does a lot of good things and generally tries to be fair. In this situation, he gets to choose from more than one possible fair thing to do. I bet his thought process went something like, "Oh goodie, look at all this extra money! Now what would be the fair thing to do with it? Maybe we could use it to bump the state of Nevada up from 48th to 47th in education. No, wait, I know--I'll give the people a DMV registration rebate!" Grateful citizens of the "luxury car" stripe will shout, "Oh goodie, look at the extra $300! That's dinner for two at Spago (not including drinks)" while the "beater" class will exclaim, "Three cheers for the Governor! $53.87 sure puts a dent in last month's power bill!"

James: Well, yeah, as a matter of fact I would be saying that. But I'm less bugged about the fact that taxes were raised as the way they went about raising them. The Nevada Constitution doesn't allow for a tax hike unless approved by two-thirds of the Legislature, an amendment that had to pass two successive ballot questions. In Guinn vs. Legislature, the state Supreme Court basically said that the government could raise taxes whenever they thought they "like, really needed to." In other words, Screw the Law and Screw the People. The state didn't anticipate the budget shortfall in the first place, and it didn't anticipate the big surplus. That tells me these guys couldn't balance a checkbook, let alone their budget, and people like that shouldn't be trusted with more money than necessary.

Lisa: I thought the court was supposed to Interpret the Law and Apply it to the People. Your disparaging comments (I can't resist observing) beg the off-topic question, if these guys couldn't balance a checkbook, let alone a budget, why would you want to put them in charge of their own Social Security savings accounts? But to get back to those DMV rebates, you didn't indicate whether you'd be chiming in with the Spago set or the power bill crowd.

James: More like the power bill crowd. But to clarify: I was saying the people running the state (not just Guinn) couldn't balance a checkbook, not the taxpayers. The difference is that when one person screws up his checkbook (or retirement account), it only screws him. When a government screws up its budget--or the national retirement account--it screws the whole community.

Lisa: Dang! Just as I was about to suggest we continue this discussion over dinner at Spago... Yes, apparently those slumps and booms are hard to predict. Who could have predicted, for instance, that the record surplus accrued by the "tax-and-spend" liberals during the Clinton administration could have been transformed into a record deficit by "fiscally responsible" conservatives in just four years? Maybe it's a good thing Clinton didn't use up that surplus on DMV rebates.

James: Just like nobody predicted an act of war that blew up the World Trade Center and shut down air traffic for almost a week (even though we'd known about Al Qaeda all through the Clinton administration). You'd better believe THAT had an impact on this state's economy. And Clinton did manage to get the deficit down with help from Newt Gingrich, but even then the "surplus" was just a projection. At any rate, he did it by cutting the size of government and spending less on what we couldn't afford. I notice you put "fiscally responsible" in quotes behind "conservatives." Since Guinn is a Republican, would that assessment include him?

Lisa: Until I get a Ph.D. in economics, I can't be sure. I suspect Guinn is genuinely fiscally responsible, which probably accounts for his having had the courage and the commitment to insist that we Nevadans get real about taxes in our state. Hey, here's an idea: That $300 million the governor is proposing to refund is almost equal to the $350 million the United States has pledged as relief for the tsunami victims. What do you say we skip the rebates and double the relief efforts? We could discuss it over a couple of beers at Decatur Drug, and maybe pay our power bills while we're at it.