Spoils has two meanings
In December the rumors were flying that the Republican-controlled legislature would throw away their landslide victory by sharing the spoils with the Democrats. Stories that moderate Republicans (RINOs) would share committee chairmanships with Democrats did not materialize, but who better to snatch defeat from the jaws of victory than Republicans?
Turns out the conservatives, not the moderates, have Legislative control. Ira Hansen is no longer Assembly Speaker, but as assistant majority leader he is backing up very conservative Clark County Assemblywoman Michele Fiore. Jim Wheeler and Jill Dickman are other Northern Nevada reform conservatives who have important leadership roles.
On paper, it’s a good team. But you won’t win many victories if the front office is throwing the game, and Gov. Sandoval’s $1.3 billion tax hike proposal is like an opponent’s first inning three-run homer that puts you behind before you even get to bat. Frustrated grassroots conservatives are wondering why elect Republicans if, like former Gov. Kenny Guinn, they want to give Nevada the largest tax hikes in its history?
Gov. Sandoval’s proposed tax hike is a slightly modified version of the margin tax proposal the voters defeated by four to one last November. The business license tax he proposed is also a gross receipts tax, not a net profit tax, and so businesses that lose money could pay taxes. His budget also includes gimmicks like making taxes that were supposed to sunset permanent. (There is nothing more permanent than a temporary government program or tax, as Ronald Reagan used to say.)
Sandoval is also proposing to hike the cigarette tax, that favorite whipping boy of politicians. Like the saying goes: “Don’t tax him, don’t tax me, tax that guy behind the tree.” Cigarette smokers, being mostly lower middle class working stiffs, are the perfect guy behind the tree to hit up for money so the political class can stay in the clover. The government simultaneously wants smokers to pay more tax and at the same time tells them to quit the habit. Hmm. Could the proposed regulation of e-cigarettes be a way to reduce the hit that cigarette taxes would take if vaping continues to grow in popularity?
Speaking of tax conspiracies, the governor proposed giving new powers to local school boards to extend certain taxes without a vote by the people, which suddenly sheds new light on his proposal to have school board members appointed, not elected. Voters have consistently rejected new property taxes for schools and for good reason. The school districts have wasted a lot of money while education has not improved. Nevada’s schools are on the average 22 years old, so they are not crumbling away. Contrary to false reports, heating and air conditioning in the schools are in good shape.
Yes, there are financial challenges for the state. But the answers should lie in structural reform, not huge tax hikes. The Nevada Republican platform emphatically states that Nevada does not have a revenue problem, it has a spending problem. Now the governor wants the largest tax increase in Nevada history. As I predicted, the Republicans will not cut the budget by one dime.
The property tax increase bill also proposes eliminating the prevailing wage mandates for construction contracts. This would save a lot of money. If modest tax increases with tough sunset provisions are coupled with structural reform, they may be tolerable. But it would have to be real reform, not merely the appearance of reform. Gov. Sandoval’s business license tax, however, should be DOA.