Columnist Jon Ralston: Court leaves tax headache with Guinn

Wednesday, Feb. 28, 2001 | 9:10 a.m.

Jon Ralston, who publishes the Ralston Report, writes a column for the Sun on Sundays and Wednesdays. Ralston can be reached at 870-7997 or through e-mail at ralston@vegas.com

THEY CAN ALL come out now, all those quivering members of the Gang of 63, who had been cowering in the face of the prospect of actually having to take a stand on the teachers' union's tax initiative for a 4 percent business profits tax.

With it's stunning decision Tuesday declaring the initiative unconstitutional, the state Supreme Court not only removed the tax from consideration, it opened a valve on the body politic. And in so doing, while allowing much hot air to escape from chamber types, the court also placed the pressure back where it has always belonged, on the only person who can and should present a plan to fix the tax structure: Gov. Kenny Guinn.

Oh, the teachers, whose ineptitude in writing what everyone knew was a flawed initiative, and the gamers, who want a business tax as much as they want anything, will declare war and insist they will not surrender. But unless Guinn forces the issue -- as he has tried to do privately while equivocating publicly -- nothing will happen.

The court's ruling surprised almost everyone involved, even though most everyone knew the teachers had botched the writing of the plan.

The gamers, who had tacitly supported the teachers and encouraged friendly briefs to be filed with the court, confidently believed one of two outcomes was assured: Either the court would say the issue was not ripe yet for consideration, as dissenting Justice Bob Rose argued, or that the earmarking clause, which mandated certain amounts be raised and targeted for education, would be stricken. Oh, they were so sure. But the majority of the court didn't go along -- shocking when a judicial body seems bereft of political influences on a high-profile issue.

Imagine how the casino folks must have felt after all the money they've invested in that court over the years. They were crushed because they knew the teachers' tax, while flawed, was the only leverage they had to bring the business folks to the table. The chamber set was positively gleeful late Tuesday. Chairman Bob Forbuss, within minutes of the ruling, insisted the group would now work with the governor and the Gang of 63 to help fix the tax structure -- and do it legally this time. "We all need to get together," Forbuss declared. "And it needs to be this session. We will support something as long as it is comprehensive and fair for everybody."

So the group that has been unrelentingly obstructionist, and has been able to get away with it for years without its members paying much of anything, now will come negotiate in good faith with the pressure off? Hard to believe, although a small contingent of chamberites, ironically enough, had presented a plan Tuesday morning for a 1.5 percent business tax. That plan sounded a lot like one promoted by Guinn a few weeks ago at a private meeting of business and gaming leaders -- and one that the gamers think doesn't go far enough.

The teachers continue to sound bellicose, like the prostrate warrior who keeps on fighting even after his weapons have been stripped and his wounds are manifestly fatal. Another ballot initiative? Get a better writer, guys. Maybe this time one with knowledge of little obstacles like the Nevada Constitution. An all-out assault on business as penurious? I sense the hiring of a consultant to orchestrate a TV campaign.

The gamers are depressed but never down too long. They will decide soon whether to try to press Guinn and the Gang of 63 or go for their own petition drive -- a contingency they had planned for all along. This is one of those cases when the casinos' self-interest happens to coincide with the public interest. But if this looks like a gaming-sponsored tax, it has no chance.

The chamber will be interesting to watch. Forbuss represents the enlightened wing -- those who believe in the funding crisis but thought the teachers were out of line. But the Mesozoic wing may be emboldened by the court to do what they have always done: stonewall.

Which brings us back to where we should be: Guinn. The governor wants a business tax, believes in a business tax but has not been able to bring himself to say so publicly, partly thanks to a muzzle affixed by his political team. He hated the teachers' union tax, too. But now that it is gone, the field is clear and it is his to conquer.

Unless Guinn can do what he does best, bring all the parties together and force action this session, the state's economic future will be left to an electoral crapshoot in November 2002.