Trying to do right goes so wrong

Joe Schoenmann and J. Patrick Coolican

Saturday, May 5, 2007 | 6:58 a.m.

As Nevada Gov. Jim Gibbons famously said last fall: "Gosh, I learned an important lesson, never to offer a helping hand to anybody ever again."

That's what a number of actors in state government must be thinking now, its governor and legislators and three separate state agencies, all trying to use tax breaks to get Nevada companies to build environmentally friendly buildings without busting the state budget.

Nevada lawmakers surely get tired of seeing the Silver State at the bottom of every national scale pertaining to health, education, cultural or social viability. Regular citizens might ignore the statistics, but lawmakers face them with almost every bill they're asked to analyze.

Imagine, then, the pride with which legislators approved a measure in 2005 that promised to help business while encouraging the use of "green" technologies and building practices, doing things such as designing buildings closer to bus lines or with parking lots with space enough to allow rain to seep into the ground instead of running off into a storm drain.

Nevada's law, giving businesses a sales tax break if they bought materials in a three-month window in 2005, and property tax breaks of 35 percent to 50 percent for up to 10 years was seen as radical by even the U.S. Green Building Council, a nonprofit group that has pushed for more than a decade for more environmentally friendly construction.

When Assembly Bill 3 came up in a special session of the 2005 Legislature, it passed the Senate and Assembly unanimously. Little was written or broadcast about it - until last week.

There were problems that never came to light until state agencies began to codify what lawmakers had done. What does a company have to do to earn the tax breaks? What if the tax breaks become so great they begin to take money away from education, prisons or highways?

Another problem: The rules seemed unclear, if not absent. Or some businesses wanted a tax break that they perhaps didn't deserve. How can the state turn away a company that wants to do good by the environment, but maybe was late with its application, or sent it to the wrong agency?

On the other hand, wouldn't MGM Mirage, Las Vegas Sands and other big companies build energy-efficient buildings without a tax incentive?

As the Associated Press reported Friday, the state Tax Commission, one of three state agencies charged with creating regulations for the tax breaks, struggled over a decision in June about who should get a sales tax exemption, even though the deadline had long passed. Why was it doing so? A question - one of many that have arisen this week - unanswered.

A clarifying moment came this week, when a Clark County School District financial chief told the Sun that the green tax breaks could cost the district $700 million to $900 million over 10 years. Faced with a shortfall, of course, the state is obligated to replenish lost school funds. But that means more money to find, or more cuts to make, for the state.

In the Senate, turmoil mussed the pointedly nondramatic air of the Senate floor. Sen. Randolph Townsend, a veteran Republican from Reno, urged everyone to take a deep breath and approve a measure he introduced to freeze the program for now. He wanted to give state analysts time to get a better idea of how much the breaks will really cost the state in tax revenue.

When the Assembly approved the same measure the next day, it seemed the furor had died away for the moment.

Gibbons, for his part, was dealt a great opportunity: a chance to lead, to solve a problem he didn't create because the law passed before his tenure began.

Then the governor spoke. At the end of a media tour of a state prison, he held a brief news conference. Asked about Townsend's bill to halt the tax program for study, the governor issued a veto threat.

He did so apparently without telling his Republican allies in the Assembly and Senate, who had all voted for the Townsend bill. Or if he had told them, they ignored him, revealing a dearth of gubernatorial clout.

The gnashing of teeth and pulling of hair began all over again.