Columnist Jon Ralston: Don’t they see need for taxes?

Friday, Nov. 15, 2002 | 5:37 a.m.

Jon Ralston hosts the public affairs program Face to Face on Las Vegas ONE and also publishes the Ralston Report. Ralston can be reached at ralston@vegas.com or (702) 870-7997.

THE BLINDING cowardice of elected officials never ceases to amaze. Try to avert your eyes as legislators scurry for cover now that their charade on taxes is fully illuminated.

After erecting a tax panel as a buffer so they could do what they do best, which is avoid positions on important issues, the Gang of 63 now seems ready to duck recommendations of its own creation.

Like a bunch of Frankensteins, they are disavowing what has become a monster because the panel actually did a thorough, unassailable job and showed what everyone has long known, this time in numbing detail: The state must have more money, and a lot of it -- nearly $5 billion in the next eight years, just to keep services at current levels.

When Guy Hobbs, the panel chairman and as conservative a budget man as there is, said the experience taught him that there was a verifiable need, there can be no dispute. Hobbs, unlike other panelists, had no agenda, represented no special interest. And he and other technical mavens, especially Jeremy Aguero, showed just how thin the tax base is.

His timing may be akin to a bad lounge comedian, but Gov. Kenny Guinn appears to be the only one willing to stand up and be counted on the central question facing the state: How to fund government so that Nevada can move out of Third World territory in how it pays for education and other essential services.

Guinn's "I have a mandate to raise taxes" message right after an election in which the Legislature became demonstrably more conservative should have been followed by one of those ba-dum-bum riffs for bad jokes. If Guinn had used his campaign to educate the public on the need for dramatic action instead of airing ads about what a great guy he is, what a wonderful family he has and how crickets chirp as he works into the night, the governor might not be in the mess he is now.

Most folks don't understand why more taxes are on the table, much less hundreds of millions of dollars. They don't realize that a $300 million-plus hole must be closed just to balance the budget, which will drain the Rainy Day Fund and, if conservatives have their way, see the end of many programs, too.

The tax panel did yeoman's work in analyzing the problem and finding solutions, including a gross receipts tax, which has sent so many business folk into orbit. (I should disclose that my boss, Brian Greenspun, served on the panel, but I have been advocating for a broad-based business tax long before I went to work for him.)

But a public that thinks gaming should pay for everything and has no clue that banks, retailers and development companies pay a pittance will not take kindly to the panel's recommendations. Nor will the targets. As they object to the gross receipts tax, which will exempt 80 percent of small business but hit the big guys, ask the bankers and developers this: If gross receipts is OK for casinos, why shouldn't other businesses pay one, too?

For lawmakers to be expressing doubts about gross receipts -- or the thirst for new revenue -- is shocking considering they all voted for a resolution last session that explicitly said there is a need. In case they have forgotten, it read in part that the task force "shall develop one or more definitive proposals to carry out the state's need to provide additional revenue for state programs, to stabilize the tax base and to reduce the long-term structural deficit of the state budget."

If the central task, recognized long before their elections by the Gang of 63, was to come up with a plan to stabilize and broaden the tax base, the panel's gross receipts tax does the trick. And any lawmaker who was there during Session '01 who doesn't want to buy into the gross receipts, let's hear his plans.

That's the irony of Guinn's mandate proclamation. You have the governor and the most powerful man in the Legislature, Senate Majority Leader Bill Raggio, saying there is a need for more revenue. You also have the state's most potent special interest, gaming, pushing the gross receipts plan. And yet it is in jeopardy. How many agendas supported by the governor, Sir Bill and gaming have not passed? Is a new day dawning that, ironically, will be a dark one?

The governor, as much as he wants, can't make the Legislature just disappear, which spells potential disaster. That's because you have an Assembly GOP leader, Lynn Hettrick, saying he is against the gross receipts tax and he has 18 other Republicans (11 of them newcomers) in his caucus. And Raggio will be driven bonkers by a more conservative and more unpredictable crew that includes three southern freshmen from the Assembly who are likely to fall into the Ann "Let's cut first" O'Connell wing of the party. All they need are eight senators to block a two-thirds vote and the anti-tax caucus can scuttle everything.

Only the governor can change that. He has amassed the political capital and he wants to do something. Now it's just a matter of staying power and some arm-twisting of his own party folk and obstreperous special interests who will do anything to continue the free ride that craven lawmakers have allowed them to enjoy forever.

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