Jon Ralston on why Nevada’s weak politicians are the real culprits behind the controversial gaming tax initiative

By Jon Ralston

Sunday, Oct. 14, 2007 | 1:30 a.m.

The incipient efforts to raise the gaming tax represent an inevitable consequence of the industry's imperative to export its product and the casino corps' drive to achieve political hegemony at home.

But the potential for multiple gaming tax initiatives has less to do with the gamers' behavior than it does with a depressing failure of political leadership. The elected elite's regular submission to the gaming industry's oligarchical control is about to present a greater of two evils as politicians will be rendered even less relevant by an initiative process that is once again being used out of frustration and disgust with a paralyzed, even prostrate government.

The only commonality between trying to harness the initiative process to raise taxes and going to the Legislature to do so is that policy considerations often are secondary (at best). I am not sure which is better: The Gang of 63 and its biennial Band-Aid approach or the teachers and their capricious 9.75 percent rate on an industry they targeted because of polls.

Is this any way to run a state?

The answer is that too many people who see clogged roads, underfunded schools and haphazard health care think that no one is running the state - except, perhaps, the lords of the Strip. This is a caricature based on reality - just look to the recent green-building fiasco, where casino companies making billions of dollars here and elsewhere are looking for hundreds of millions in tax breaks from the state that will, if granted, hurt schools, roads and hea-lth care.

None of this would be possible without lawmakers, state and local, enacting laws that benefit the gamers, even if they are obvious overreaches to enact tax breaks, nullify jury verdicts or stifle competition. Legislators, whether they are in Carson City or on Grand Central Parkway, should be creating a friendly economic environment for the casinos. But they continue to act - and vote - as if they want to be much more than friends.

I have neither the time nor the space nor the inclination to make the policy case against a 45 percent increase on the gross gaming tax except to say that increasing a dependence on the state's main revenue source is fraught with peril. I'll let the gamers handle the brilliant arguments about how it will stifle investment here as they continue to invest elsewhere - that's a surefire selling point.

The real issue is that when politicians realized the likely impact of the valley's growth, they should have been forward-thinking enough to prepare for it. That is, they should have at least 15 and maybe 20 years ago passed something akin to Gov. Kenny Guinn's gross receipts tax. Regular but slight increases in the gross gaming tax, triggered by state and local needs, should have been coupled with a broad-based business tax that increased with the casino levy.

How does anyone out there credibly argue that businesses, including out-of-state corporations that make money off mining, development, banking and retailing (to name a few), should not be paying more along with the gamers to offset infrastructure improvements?

By not doing anything substantive or long-term during this time, the political class has allowed all of this pressure to build inside the body politic , and voters are ready to explode. Hence, the teachers - and rabble-rouser Kermitt Waters , whose taxing proposal would do much more - are tapping into something real and perhaps unstoppable.

Outside of Guinn, who tried to plot a long-term course and relieve some of the pressure, most politicians have turned their backs - or perhaps the more physiologically correct metaphor is laid down. So now, thanks to those who run government, we are faced with a runaway initiative process, where policy will not be vetted through the crucible of the Legislature but though the even more unreliable prism of a public inflamed by populist rhetoric.

Anyone ever consider doing what the Founding Fathers had in mind, which was not direct democracy through initiative but holding elected officials accountable? To wit:

If you are in office and you don't think education needs more money, then say that. If you think the teachers' initiative or the Waters plan make sense to help education, don't stay silent. If you think education needs more money but think there is a better way, speak up.

If you have nothing to say or have only mealy mouthed rhetoric to offer, as I am afraid too many of these timorous folks will, then I have some simple advice: Get out.