Las Vegas Sun

March 28, 2024

SUN EDITORIAL:

Nevada at a crossroads

Upcoming 2011 Legislature will be a defining moment for this state’s future

Lawmakers, during a special session of the Nevada Legislature, worked over the weekend to close a nearly $1 billion shortfall in the state government budget. Balancing the budget, in the wake of the Great Recession, never was going to be easy. Admittedly, the governor and state legislators faced an unprecedented task in terms of the scope of the shortfall.

Nonetheless, the budget crisis showed, yet again, that the state’s tax structure — which relies too heavily on the gaming and mining industries — is broken. Separately, the crisis put on display, yet again, that too many of this state’s politicians are looking for the easiest way out — and always with an eye on the upcoming election.

Gov. Jim Gibbons certainly hasn’t been much help. His long political career has centered on his “no new taxes” bromide, which also has been used as a cudgel to scare political opponents into submission. It often has worked, cowing other politicians into falsely believing that the public won’t see raising revenue smartly as an investment in our future.

We’re not suggesting that this was the time to raise taxes, but if the state had truly broadened its tax base and increased the amount of the state’s revenue when the state’s economy was roaring as far back as the mid-1990s, then today’s shortfall wouldn’t have been nearly as traumatic. Of course, part of the problem has been that too many in the private sector — particularly corporations with headquarters outside of Nevada — have previously fought reasonable increases in taxes.

When times have been good, these big out-of-state corporations doing business in this state argue that Nevada can’t raise taxes because it would kill the goose that laid the golden egg. Conversely, when times are bad, they make the case that they can’t pay more because it would harm an economic recovery. In their selfish view, there never can be a time that taxes can be raised. That means while they soak up the profits here — and send that money back home where they usually pay considerably higher taxes — our schools, parks and social services suffer. Where is the economic justice in that?

In contrast, the gaming industry has stepped up to the plate in the past and agreed with legislative proposals to increase their taxes. During this special session of the Legislature, there were proposals out there that would have increased the fees (taxes by any other name) that would have been levied on gaming and mining. (The mining industry was in the crosshairs of some interest groups and lawmakers because the price of gold has skyrocketed during the recession.)

In terms of fairness and sound economics, rather than try to heap so much of the tax burden on specific industries, it makes more sense — from an economic perspective and in fairness — to spread the taxation burden across the board. That is one of the lessons that lawmakers — and whomever is our next governor after this year’s elections — must take from this economic crisis. Another lesson at both the state and local government level is that the generous benefits public employees receive must be brought more in line with the modest benefits seen in the private sector.

It is incumbent on any official who claims to be a leader to actually lead, to take the risks necessary, explain them properly to the voters, and then trust them to recognize leadership when it hits them in the face instead of over the head. The 2011 Legislature can’t keep kicking the can down the road, hoping that some future lawmakers will make the tough choices. It’s time to make an investment in our future and broaden the sources of revenue the state receives. Otherwise, Nevada will continue to fall further behind other states when it comes to providing a decent education and quality of life. That is a perilous situation Nevada can’t afford.

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