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September 21, 2014

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Sandoval’s resolve on taxes to be tested by Lake Mead issue

Image

Steve Marcus

An access shaft is shown during construction of the the Southern Nevada Water Authority’s “third straw” at Lake Mead Tuesday, May 10, 2011. The $700 million project will ensure the steady flow of water to the Las Vegas Valley.

Third Straw Construction

A rig of explosives is lifted by a crane during construction of the the Southern Nevada Water Authority's Launch slideshow »
Brian Sandoval

Brian Sandoval

Ed Goedhart

Ed Goedhart

CARSON CITY — Gov. Brian Sandoval has said extending a tax set to expire is the same as a tax increase. That position could soon be tested by the mother of all “juiced” Nevada issues — water.

Senate Bill 432 would lift a sunset on a quarter-cent sales tax passed by voters in 1998 to pay for water and sewage infrastructure, including the “third straw” into Lake Mead.

As the bill works its way through the Legislature, Sandoval faces a tough choice — appease the collective power of Nevada’s establishment or keep his promise not to raise taxes.

Shoring up the Las Vegas Valley’s drinking water supply is an issue that typically has known no partisan boundaries in this desert state. Elected officials have shown great deference to the Southern Nevada Water Authority when it comes to policies it says are necessary to keep water flowing to taps.

The authority is advocating for the bill with the combined might of the Las Vegas Chamber of Commerce, Nevada Resort Association, union-affiliated and nonunion construction trade groups, and the state’s largest labor union. All those groups signed a letter of support.

Despite that formidable list, the bill passed the state Senate 14-7, barely reaching the two-thirds majority necessary for a tax or fee increase.

The bill is pending in the Assembly, where anti-tax Republicans are signaling that they consider it to be a tax increase.

The authority and other advocates are framing it as anything but.

Still, the fact that it requires a two-thirds majority for passage seems to decide it.

“I look at it as a tax increase,” said Assemblyman Ed Goedhart, R-Amargosa Valley, a vocal tax opponent. “If you’re lifting the sunset on the quarter percent (tax) for the (Southern Nevada Water Authority), you’re doing the same thing as lifting the sunset on taxes passed last session.”

Those sunset provisions have become a line in the sand drawn by Sandoval and Republican lawmakers.

Approving the water infrastructure tax while opposing extension of taxes passed last regular session would be inconsistent, Goedhart said.

Sandoval has won plaudits from conservatives for sticking with his campaign pledge not to raise taxes and not to extend levies passed by lawmakers in 2009 to help fund the budget. He has said extending a tax is the same as a tax increase.

Democrats, who want to raise $1.2 billion to reduce the spending cuts called for in Sandoval’s budget, are increasingly frustrated that Republican lawmakers are following Sandoval’s lead, and appear unwilling to negotiate.

They have tried to pressure Republicans to support them by highlighting cuts in K-12 schools, higher education and social services.

Groups such as the Chamber of Commerce and gaming have expressed concern about cuts in education, but have been careful not to directly criticize Sandoval.

But the future of water is another matter, one that affects the ability of Las Vegas to flourish.

SB432, which has gone almost unnoticed beyond the walls of the Legislature, represents a new test of Sandoval’s resolve.

Voters approved the quarter-cent tax with 72 percent of the vote. The tax was supposed to expire once it raised $2.3 billion, or in 2025, whichever came first.

The tax has raised $823 million. The sunset needs to be lifted to complete the third intake into Lake Mead without raising water rates, authority officials said.

The authority will issue about $400 million in bonds next year to pay for the project over 40 years, and lifting the sunset would allow it to get cheaper financing.

Water “rates are going to go up substantially if we don’t have this (tax) as a revenue stream,” said Phil Speight, the authority’s deputy general manager, who estimated 30 percent of the tax is being paid by tourists.

Authority spokesman JC Davis said water rates could increase about $60 a year if the bill doesn’t pass.

Business groups have twice lobbied Sandoval about the bill, but remain uncertain what he will do if and when the Assembly passes the bill, according to sources.

A source close to the administration said Sandoval is evaluating his options.

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  1. If 1/4 percent makes the difference between failing and succeeding for any business, they will soon or have already failed.

  2. When the "Bush TAX CUTS" were set to expire, (and were allowed to continue on, into perpetuity, likely) the NeoNuts argued that NOT allowing them to continue constituted "THE LARGEST TAX INCREASE IN THE HISTORY OF THE WORLD!!!"

    I love TeaNut logic.
    Those guys are so darn FUNNY!

    This asinine, illogical CLINGING to anti-tax DOGMA by B.S. and his Soldiers of Stupidity is leading Nevader to the brink...we are staring into the abyss, TEETERING, and all we can muster is a wheezing, whispered, "no taxus, no taxus!" from our fearless, feckless leader.

  3. For all of you who voted for Gov. BS and now find your job going away or your paycheck reduced -- be careful what you wish for when you vote.

    I keep combing BS's statements for some insight, and the guy sounds like some college freshman who has read three books written by conservative economists and now actually thinks he knows what he is talking about.

    Another disgrace in the Governor's mansion -- surprise, surprise.

  4. That milk and hay, etc. from Armagosa Valley makes it's way to the Las Vegas Area. You hurt the economy here, you hurt your own area's economy as well, Mr. Republihick.

  5. We might not even need a "third straw" anymore. I don't know if anyone has noticed but alot of people have moved away. There are many vacant houses and the demand for water is no doubt lower than last year. Next thing you know they will have gotten the tax they want then will raise the rate anyways saying lost revinue do to water conservation. Where is nevada waters competion that you would have in a conservative free market system that would drive prices lower not higher?

  6. "Authority spokesman JC Davis said water rates could increase about $60 a year if the bill doesn't pass."

    You mean the people that actually use the water would have to foot the cost to deliver it? Blasphemous!

  7. "Commonsense" lacks it. Where is the source of "competitive" water? From the earliest days of civilization in the Nile, in Mesopotamia, in the Indus -- it has been about organizing on a large scale to supply water. The Colorado River system is just another example.

    The alternative water supply would be desalinization plants in the Gulf of California, and canals, reservoirs, and pumping stations between those plants and Las Vegas. That also would require governmental organization, to get Mexico to cooperate, and to build and maintain it.

  8. Let it sunset. We are getting 30 more ft. of Lake Mead. No new tax is needed. FIRE all public employees, re-hire at national average. End their Cadilac pensions AND THEN we can afford to hire teachers, cops, fire etc. BECAUSE that would save BILLIONS yearly in Nevada.

  9. bin Laden's prime objective behind 9/11 attack was to create panic in order to destabilize the economy which also kills tax revenue to cause massive National Debt. His two most powerful allies in fulfilling these goals were George W. Bush and the American Banking & Financial systems.

    Even in Death, bin Laden continue to succeed in his goals without any further attacks on America. He and his allies have caused more financial damage in this country then any other person or Army, including Adolf Hitler.

    His best ally in Nevada is none other then Brian Sandoval and ironically, a "Christian", whatever that means. Sandoval's faith and actions are paralleling bin Laden's plans almost identically.

    Nevada continues to experience the greatest wishes of OBL by destroying education, eliminating medical care and demonizing the Government, and the Republicans walk in lock step with their leader, bin Sandoval.

  10. House Republicans have just UNANIMOUSLY voted to reject a measure cutting taxpayer subsidies to Big Oil. Taxpayers funded about $37 billion in subsidies to the Oil companies...that's about $187 paid by each licensed driver that went to improve their profit margin.

    "No New Taxes"? bin Sandoval & Company don't mind taxing the public for oil company subsidies; they don't mind allowing Executives to raise the price of gasoline until it becomes destructive, but they are willing to destroy education to "HELP THE TAXPAYER"!!! by saving them 1/4% on taxes.

    Big money for the top, a wrecking crew for the public, "working hard for prosperity". These Conservatives are systematically insane.

  11. This issue bothers me on several fronts. As a person who is a resident in both Southern and Northern Nevada, I am very concerned about my investment in housing/shelter. Water supply is essential. The fact that Southern Nevada went about UNSUSTAINABLE LARGE SCALE BUILDING and now faces keeping up with water demand, tells me of the greed and or short-sightedness of PLANNERS,COMMISSIONERS, AND POLITICIANS, and any involved with this unsustainable growth model. Shame Shame Shame Shame Shame on YOU!

    The PUBLIC elected and TRUSTED YOU, and YOU FAILED THEM AND SHOULD BE PERSONALLY LIABLE!!!!!!

    Now what? Reap what you sow?

    It is time to limit growth, make due with any and all currently developed plots, recycle them, and NOT take nor clear another piece of Las Vegas, Henderson, or North Las Vegas until every plot has sustainable energy and a sustainable water supply.

    How hard can that be?

    Greed knows no political distinctions. Neither does ignorance or stupidity.

    Unsustainable growth has back-fired and left a mess. Many made their fast money and left town, seeing the handwriting on the wall.

    Here we are. Now what?