Sunday, Oct. 7, 2007 | 7:20 a.m.
Lawmakers tried to close a gaping loophole in state law this year that gave huge tax breaks to developers who built environmentally friendly projects. The loophole threatened to gut an estimated $1 billion from state and local governments over the next decade.
As reported Thursday in the Las Vegas Sun by Joe Schoenmann and David McGrath Schwartz, the original tax break, passed in 2005, would have given, for example, MGM Mirage $3 in tax relief for every $1 spent on green construction in the massive CityCenter.
The 2007 Legislature clearly wanted to curtail the mammoth tax breaks and tightened restrictions governing them before the session ended in June. The Gibbons administration has proposed a regulation to purportedly implement the law, but it counters what the Legislature did. The proposal would expand the tax breaks, instead of limiting them.
As first reported last week by Sun columnist Jon Ralston in his daily e-mail newsletter, Gibbons' energy adviser, Hatice Gecol, has been inserting into the regulation, nearly word-for-word, proposals offered by lobbyists paid to make sure the healthy tax break remains.
The Gibbons administration has found a sympathetic ear in the Nevada Tax Commission, which has a history of siding with major corporations and recently expressed its approval of the regulation.
The next step for the proposed regulation is the Legislative Commission, which meets at the end of month. The commission will, hopefully, see how wrong this regulation is and reject it.
State and local governments, including the Clark County School District, will suffer from the green tax breaks no matter if this regulation passes. The only question is the size of the cuts, which come at time when governments can least afford them.
The School District, struggling to keep up with explosive growth, is expecting an $82 million cut over the first four years under the new law, and that would increase if the Gibbons administration's regulation passes. For local governments in Clark County, the total would be at least $128 million over the first four years.
The Gibbons administration is merely using this regulation as a backdoor tax cut to curry favor with casinos and developers. Such a move will only further chip away at schools and services, such as police and fire, eroding our quality of life.
This regulation is unconscionable, especially because the Gibbons administration is brazenly defying the Legislature's intent. The governor should show some of his much ballyhooed leadership and pull the proposal to rework it to meet the intent of the law. He and his staff are supposed to uphold the law, not subvert it.
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