A taxing problem

Wednesday, April 7, 2010 | 2:01 a.m.

A group of business leaders, government officials and scholars gathered Monday at UNLV to discuss Nevada’s future. Bruce Katz of the Brookings Institution, which has been studying the Mountain West, brought the group together to talk about how Nevada could position itself for the “new economy.”

As Joe Schoenmann reported in Tuesday’s Las Vegas Sun, Katz talked about increasing exports, innovating and developing industries and services here. Katz and his Brookings colleagues have outlined a positive vision for Nevada that could pay great dividends for the state and help stabilize the economy. However, Nevada currently cannot achieve it. The state doesn’t have many of the basic building blocks to bring businesses here and help them thrive.

During the meeting, MGM Mirage CEO Jim Murren told the crowd he sees the economy improving, but he said the state needs to improve education, health care, sustainability and infrastructure. To attract other businesses and diversify the economy, Nevada will need to improve those areas.

That’s not a secret. For years, governors and state lawmakers have clearly seen the problem — education and vital government services don’t have the necessary funding and, as a result, don’t perform well compared with other states. The state’s antiquated tax system needs to be overhauled and made more equitable. Yet little has changed.

Currently, politicians say they can’t do much about it because of the poor economy, but they didn’t do much when the economy was booming, either. As Murren noted: “2007 was a pretty damn good year, and we did nothing to address these issues. Shame on us.”

Indeed. Many political leaders have been cowed by the vocal anti-government crowd, which vociferously opposes anyone who would raise taxes to improve the state. Republican candidates, for example, face a litmus test on taxes, and they seem to revel in proving themselves. Brian Sandoval, a former federal judge who is a leading GOP candidate for governor, recently told a radio show there was no situation in which he would consider raising taxes.

As David McGrath Schwartz reported in Tuesday’s Sun, his opponents, Gov. Jim Gibbons and former North Las Vegas Mayor Mike Montandon, rushed out statements reaffirming their anti-tax bona fides. Gibbons and Montandon have said the state has a “spending problem.”

The state’s leading budget analysts and experts disagree. They say Nevada’s government has a revenue problem: There simply isn’t enough money to maintain a basic level of services. Gibbons won’t admit that, but he knows it. He has had to dance around his infamous no-new-taxes pledge to bring in more revenue to the state just to stave off the harshest of budget cuts.

The bottom line is that if this political rhetoric continues to be state policy, the “new economy” will bypass Nevada and flourish in states that take education and other necessary services seriously.