Columnist Jon Ralston: An ode to overdue tax reform

Friday, Jan. 10, 2003 | 4:11 a.m.

"Is Nevada ready for a broad-based business tax as the first step toward modernizing an antiquated, patchwork system of state levies?

"Will the people get behind a probable move to assault the business community's bottom lines during the (Legislature)?

"Can the Chamber of Commerce types, who have been quietly marshaling their forces, head off the business tax momentum?"

Those words are as timely today as when I wrote them -- more than 13 years ago!

When I came across this column during a recent housecleaning, the eerie resonance and enduring relevance stopped me cold. Even though I have been writing about the need for a business tax for so long, hearing the same old arguments, seeing the same hoary coalitions, vetting the same ancient proposals, I didn't realize just how frozen in time this state has been waiting for someone -- or some Legislature -- to address a manifest problem.

This is not about a pundit being self-reverential, a soothsayer reveling in his oracular magnificence. This is about realizing how the time truly has arrived -- it actually came 13 years ago and has kept coming -- but could be gone if something doesn't happen in Session '03.

The question isn't how much -- the billion dollars or so Gov. Kenny Guinn wants to put into the budget with a gross receipts tax as the centerpiece, or a smaller figure dictated by legislative Republicans desiring to cut necessities disguised as "enhancements."

The questions are how and when -- how should the tax structure be fundamentally changed to sustain the fastest-growing state in the country, and when will politicians who lust after re-election stop postponing the most important decision this state will make?

Not since Nevada elected to take the path to legalized gambling three-quarters of a century ago will a policy decision so dramatically affect the lives of its inhabitants. Gov. Kenny Guinn and the Gang of 63 must decide in a few short weeks whether they are willing to suffer the slings and arrows of business folks who have made outrageous fortunes here or whether they have the fortitude to take arms against a sea of political and economic troubles and, by opposing, end them.

With apologies to the Bard, this is the chance, especially for Guinn as he prepares to deliver in eight days the most important State of the State in Nevada's history, to show whether they will be -- or not be -- what they were elected to be.

The problem so far has been communication. The cacophony of voices, the governor's numerical peregrinations, and the opportunistic special interests spinning away from their responsibility surely have not caused any public recognition of the problem Guinn now puts at $704 million, just to break even. (And who just wants to break even?)

Listen to this from 13 years ago:

"But the political forces supporting a business tax -- especially the gaming industry, which now is indicating it might be willing to pay part of the load under a new levy -- now know they'll have to mount a massive and expensive media campaign to ensure the public's support."

Again, this is not about prescience; it's about stasis. Gaming is willing to pay even more this time and the ads (through the Culinary) already have started. But something still is rotten in the state of Nevada. Back then, I was optimistic:

"Whether it's Assemblyman Marvin Sedway's 0.5 percent gross business tax or some alternative -- worked out in back-room negotiations sure to ensue in the coming months between all the parties -- the final business tax proposal appears to have a good chance of passage."

Amazing that a gross receipts tax was on the table then, too. There are few new ideas in this nondebate. Alas, Sedway, a brave and visionary leader who was willing to fight for taxes to fill needs he believed were obvious, died before the session. And no one was left to take up the cause.

So what happened? The passage of a tepid employee head tax -- not surprisingly still embraced today by the chamber set as a way to fund the budget. And the gamers, in overreach mode, persuaded the supple Gang of 63 to give them volume discounts, which set back the cause and which were ultimately reversed by the succeeding Legislature.

So here we are, not even back at square one. The state is slipping backward with every succeeding session that refuses to do something, with every succeeding governor who does not decide to do what Guinn must do: Frame the debate, demand action and threaten with political retribution those lawmakers who don't step up.

The difference between today and 13 years ago is one of magnitude -- an imperative has become a crisis. As the governor has said -- and as some conservative Republicans fail to comprehend -- you can't cut your way to prosperity. More importantly, you can't keep taking away putative "enhancements" and be a state where anyone wants to live.

My optimism was not rewarded 13 years ago, my belief that if gaming didn't blink this would happen. Somehow, through it all, through the cowardice of lawmakers, through the tax-avoidance tactics of the business types, through the heavy-handed obviousness of gaming's cause, I remain sanguine that Guinn will not be Hamlet and that he will finally, after all these years, turn this flirtation with tax reform into reality.

It's a consummation devoutly to be wished.