Editorial: Feel-good politics that don’t work

Saturday, Aug. 23, 2003 | 1:44 a.m.

Republican state Assemblyman Ron Knecht often said during the past legislative session that Nevada was in danger of becoming "East California" if taxes were raised. But the Legislature did increase taxes on businesses -- and the sky didn't fall. That shouldn't be too surprising because it was the first time since 1991 that any statewide taxes were raised, and even the modest amount raised keeps Nevada well below what businesses pay in California, belying Knecht's upside-down view of our state's actual tax burden.

Ironically, Knecht was right about the potential for Nevada to become East California, but it has nothing to do with taxes. It has everything to do with those individuals and groups on the political fringes who support his and some other Republicans' anti-tax, anti-government, anti-everything philosophy. They want to undermine representative democracy in Nevada through the initiative petition process, just as special interest groups have done in California where initiatives clutter the ballot. The most recent example of the initiative process gone mad is the success of Republican multimillionaire congressman Dan Issa, who spent at least $1.6 million of his own money to help get enough signatures to force a recall election of Gov. Gray Davis. No one has accused the governor of corruption; Republicans simply want to undo the results of an election that they lost just 10 months ago.

In Nevada a far-right group calling itself Citizens for Sound Government -- talk about double-speak -- has considered trying to recall six state Supreme Court justices who set aside a constitutional requirement requiring a two-thirds vote by the Legislature to raise taxes. While that effort may be petering out, the same group is considering a ballot question that would prohibit public employees from serving in the Legislature and banning campaign contributions from casinos. Another group, Nevadans for Tax Restraint, wants an initiative that would repeal the 2003 Legislature's tax hike -- even though it received two-thirds approval from both houses of the Legislature.

Proposition 13, the 1978 initiative that limited property tax increases in California and made it more difficult to raise taxes, has been referred to as the "third rail" of California politics. While it might seem untouchable, it also has contributed to California's current budget crisis, as it forced the state to rely too heavily on other sources of revenue, such as the income tax, that plunged when the dot-com bubble burst in Northern California. Even billionaire investor Warren Buffett, who has signed on as an economic adviser to gubernatorial candidate Arnold Schwarzenegger, said recently that the state's property taxes are unfair and actually need to be higher. Schwarzenegger says he doesn't agree, but Buffett makes a convincing case when he notes that he pays $14,401 annually in taxes on his $500,000 home in Omaha, Neb., yet pays only $2,264 in tax es on a $4 million home he owns in Laguna Beach, Calif.

We really don't even need to look to California to know how destructive initiatives can be. The two-thirds majority requirement to raise taxes in Nevada was the result of a ballot question. The net effect of that mandate allowed a minority of state lawmakers this year to dictate the details of the final tax package. The local chambers of commerce and other business groups figured out they could exploit the power of the one-third minority to block any attempt to adequately raise taxes on them. So instead of a broad-based tax that made big out-of-state corporations pay their fair share, we still have a tax system that -- outside of the taxes on the gaming industry -- focuses heavily on consumers and barely touches big businesses.

What the seemingly feel-good initiatives do is tie the hands of our elected representatives, so that they can't carry out the will of the people. If we don't turn this around, Nevada will turn into an East California, a state that protects big businesses while refusing to ensure a quality education for children and provide necessary government services.