Randi's Rants

Randi Thompson
Nevada NewsMakers Political Analyst
Nevada NewsMakers Blogs

In a rather surreal hearing during the Special Session last month, Senators from both sides of the aisle berated business and gaming lobbyists for saying “no” to new taxes.  

 

The dialogue reminded me of the contentious 2003 session that pitted business against gaming over the proposed gross receipts tax. This time, gaming lobbyists sat next to business lobbyists taking the same verbal abuse, refusing to contribute more money during the worst recession in Nevada since the Depression.  

 

Senator Horsford (D- LV) wanted gaming to pay an additional $32 million to cover the cost of the state gaming board. When gaming pushed back, saying it couldn’t afford the increases because of record losses in the last year and the increase on payroll and room taxes that were passed in 2009, the senator essentially mocked the industry.

“Look, $30 million is three $10 million high rollers,” he said. “To the average person who is really struggling to make basic decisions about how to keep their families together, the idea that the entire gaming industry can’t pay” rings hollow.

Senator Schneider (D-LV) who is term limited, continued the whipping. “We have kept the lowest gaming tax in the world here. We have changed laws. We have allowed them to make lots of money. ... And they have built markets around the world on Nevada dollars we let them take out.”

Next, it was business lobbyists who were taken to task for not willing to pay more in taxes. Representatives from the chamber, retail, manufacturing and trucking were called the “Group of No” and were told that their argument that more taxes would mean more businesses closing up shop and fleeing the state “a bunch of bull.”

(Guess those senators haven’t looked at the number of bankruptcy filings in Nevada recently.)

 

Senators said they bring the business lobbyists before the committee of commerce, tax and transportation in 2011 for a “Come to Jesus” meeting.

Senator Townsend, (R-Reno) who was a longtime friend of big business, was even tougher on the business and banking lobbyist.

 

 “No, is not a plan,” said Townsend. “You need to be at the table and explain how your industry can help us get to where we want this state to go. If business doesn’t offer ideas on how to solve the crisis “you are absolutely wasting our time.”

What was most frustrating for the business lobbyists was the legislators’ inability to recognize that the budget they passed in 2009, which was $700 million more than the Governor’s recommendation, was the reason for this special session.   Had they followed the advice of the state’s budget office and Economic Forum, the state would not have been $800 million in debt.  (I know hind sight is 20-20.)

 

Yet with over $2 billion in tax increases since 2003, the business community is tapped out. But the legislators and public employee unions just don’t see that.  

Another point of contention for this session was that casinos and the business community called for reforms to collective bargaining, which is severely hurting city and county budgets and costing the taxpayers millions in generous over time pay, retirement benefits, and health care.   The issue brought out a phalanx of public employee unions who shot down any reforms. But the issue will come up again as the unfunded liabilities for public employees’ retirement and health benefits continue to grow.

 

 

Most of assembly democratic candidates in the 10 open seats are public employees. Most of their republican opponents are business owners and private sector employees. This is setting up a clear choice for voters between tax “users” and tax “payers.”  

 

But history often repeats itself, so these candidates should look at the 2006 election to gage how voters will likely act this year.

 

After the huge tax increase of 2003, and the spending spree of 2005, voters chose to elect a true fiscal conservative for Governor in 2006 who promised to draw the line on spending and tax increases.  

 

After the 2009 session, where significant taxes and fees were increased despite Governor Gibbon’s vetoes, it’s likely that voters will be even more serious about electing legislators this year who will also promise to hold the line on spending.

 

 

It’s likely the legislature will extend the sales and payroll tax increases that were approved in 2009 but are scheduled to sunset in 2011.   And with a looming $3 billion deficit, expect more tax increases to be proposed. 

 

The special session in February showed us that cutting government is not an easy thing for our legislature to do. So unless there is a change in party control of the Senate, and unless the GOP can gain one seat in the Assembly to halt the current 2/3rds majority, we are looking at tax increases, folks. And the tax most favored by gaming and the Democrats is gross receipts. We also expect to see a proposal to tax services such as auto repairs, dry cleaners, lawyers, etc.

 

The state’s budget has grown to the point that it can not be sustained without significant tax increases. The 2011 Legislature has no choice but to make dramatic cuts to the state’s budget. And we voters have no choice but to elect legislators who will make those cuts. 

 

2011 is also a “redistricting” session.    The lines for legislative districts will be redrawn next year, based on the census.   Whoever is in power will control those lines and determine the fate of legislative elections for the next 10 years.