Editorial: Gibbons’ tax pledge

Friday, March 9, 2007 | 7:01 a.m.

Go v. Jim Gibbons, taking an extraordinarily expansive view of his no-new-taxes pledge last week, withdrew budget requests that would increase the fees used to regulate health care and other industries.

State agencies had wanted to raise the fees they charge hospitals, nursing homes and restaurants, among other businesses regulated by the state, to pay for more inspectors. The governor, however, wants to stop that.

As reported by Cy Ryan in the Las Vegas Sun, Assemblywoman Sheila Leslie, D-Reno, was outraged, calling the governor's action "fiscally irresponsible." The governor would be putting the Legislature in a bind because without raising fees, lawmakers would have to find $7 million in the general fund to pay for new inspectors.

Gibbons would seem to have been listening to hospital and nursing home officials who complained to an Assembly committee that the fees they pay to the state, which go to fund industry oversight, are among the highest in the nation. Of course what they leave out is that they don't pay the taxes that businesses in some other states do, such as franchise fees or corporate income taxes.

Despite the professed hard-line position taken by Gibbons, he is leaving himself some wiggle room. Josh Hicks, his general counsel, sent a memo to lawmakers and state agencies last week that said requests to increase fees would be reviewed on a case-by-case basis. Hicks said they may be approved if the fees are to be paid by an industry alone, if there is strong reason to increase the fee and if the industry consents to the increase.

Gibbons' predicament of maintaining government services without raising taxes, including fees, demonstrates just how much harder governing is than being on the campaign trail, where making feel-good promises about cutting waste in government and not raising taxes is so easy.

The reality is that money for essential government services, such as health inspectors, has to come from somewhere. Despite claims by some on the far right that the state is flush with money, Nevada is already struggling to provide even basic services after astronomical growth. Businesses pay for licenses and permits, why not pay for regulation? Isn't that similar to a toll road? Toll roads were one of the ideas initially floated as part of Gibbons' effort to avoid raising fees to pay for the road construction needed to avoid gridlock.

Unfortunately, there will be gridlock not only on the highways but also in the review and regulation of hospitals and nursing homes if the Legislature follows Gibbons' foolish pledge and his equally foolish plan to allow industry to decide if it should pay more. It would seem to us that inspecting hospitals and nursing homes should be a priority, and given that the industry seems to be booming in Nevada, we think they can afford to pay a little more.