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January 31, 2015

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Sandoval quells conservative outrage over reversal on tax pledge

Brian Sandoval

Brian Sandoval

Chuck Muth

Chuck Muth

Gov. Brian Sandoval’s initial decision to reverse himself on a promise not to extend the 2009 tax increases prompted conservative outrage. But in the days following his pronouncement that the expiring taxes were on the table, he has reined in his critics by dialing back his original pronouncements, reaching out to vocal conservatives and working closely with Republicans in the Legislature.

Last week, Sandoval appeared to break the quintessential political promise, a surprise from a governor who had shown no signs of backing off his vow to steer a no-new-taxes budget through the Legislature.

That vow, Sandoval made clear time and again, included allowing the 2009 sales, payroll and business license tax increases to expire as scheduled July 1.

Several conservatives immediately vented their frustration after Sandoval’s advisers said the governor was willing to extend the tax increases because of a Nevada Supreme Court ruling that has blown a hole in his budget.

“It is quite disappointing to see that after more than 100 days of Gov. Sandoval consistently advocating for the interest of the Nevada taxpayers during this legislative session, he reportedly is ready to precipitously abandon his promise not to raise taxes,” wrote Steven Miller of the Nevada Policy Research Institute.

Conservative operative Chuck Muth, keeper of the anti-tax pledge and adviser to several conservative state Republican senators, was a little more blunt.

“Once you lose the trust of the people who put their full faith in you, who stuck their necks way out for you, who believed in you, you can never get it back,” Muth wrote. “Make a promise, keep a promise.”

But since Thursday’s court decision, Sandoval has persuaded Muth to retract his harsher statements and allow the administration some breathing room to come up with a plan.

The issue is whether the state could take $62 million in user fees from Clark County’s Clean Water Coalition. But Sandoval, a former federal judge, is concerned the opinion — that picking and choosing among local government funds to loot for the state general fund — could have a broader effect. The court concluded such pillaging must be uniform for counties and local governments to be constitutional.

So although the ruling dealt only with the coalition’s levy on Clark County sewer customers, it could apply to all of the county and local government dollars Sandoval had wanted to take to finance state government — an amount totaling $656 million.

Republican lawmakers, even those who have signed pledges not to raise taxes, have largely avoided criticizing the governor. And although a number of conservatives interviewed by the Las Vegas Sun admitted they are uneasy about how Sandoval will respond to the Nevada Supreme Court decision, they are holding their fire.

“It’s a little bit premature because we don’t know what he’s going to do,” Muth said after he spoke with Sandoval. “We don’t know whether he’ll take some of the sunsets or all of them. Whether he’ll take a narrow view or a broad view (of how big the budget hole is) and frankly, what he gets in return out of concessions from the Democrats.”

The Sandoval administration bought time with Keystone Corp., an anti-tax business group that had been one of the loudest voices opposing bargaining the expiring tax for reforms on things such as prevailing wage, education, construction defects and collective bargaining.

“There is great concern among Keystone members in the last 48 hours, but no one has seen a plan and we’re willing to withhold judgment,” said Robert Uithoven, a conservative consultant who is affiliated with Keystone.

The group had lambasted Assembly Republicans and the Las Vegas Chamber of Commerce for trying to negotiate policy reforms in exchange for tax increases.

Now, however, Uithoven said Sandoval can make a compelling argument for lifting the sunsets if he can put a price tag on some of those reforms — allowing conservatives to compare, for instance, how much limiting collective bargaining for local government employees could save taxpayers versus how much lifting the sunsets would generate in new revenue.

“Of course there will be some people on the right who are not happy,” Uithoven said. “But he has a lot of time to get his message out on why he is doing this.”

Tray Abney, government relations director of the Reno-Sparks Chamber of Commerce and tax increase opponent, said Sandoval might be the target of attacks from the right if he extends some of the expiring taxes.

“Yes, it makes it a little more politically difficult for him, but he’s more than capable of explaining to the state and the voters the need for it,” Abney said.

The Sandoval administration quickly dialed back its original statement that the governor would simply lift the sunsets to plug the $656 million hole created if the state can no longer take local government funds.

On Friday, Sandovav adviser Dale Erquiaga said the governor will only consider lifting portions of the sunsets to generate just enough revenue to offset cuts he thinks are unacceptable. He also said lifting any sunsets must be accompanied by action from the Democrats on Republican policy priorities.

Even the most conservative legislators, who have in the past chastised Republicans who support taxes, stopped short of criticizing Sandoval.

Still, it may be a short-lived detente.

Assemblyman Ed Goedhart, R-Amargosa Valley, admitted to some frustration at the administration’s broad reading of the court decision, putting the budget hole at $656 million. “This is a $65 million hole, not a $600 million hole,” Goedhart said, noting the state treats counties differently in many areas. “For them to take this ruling to say it’s a $650 million hole doesn’t pass the common-sense test.”

Goedhart refused to criticize Sandoval, but cautioned that lifting the sunsets would only deepen mistrust among voters skeptical that politicians ever keep their word. The 2009 tax increase was supposed to be temporary, he noted.

“People never trust the government to have a temporary tax,” Goedhart said. “So this will just feed into some people’s skepticism that the government ever lives up to its promises.”

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  1. Call your legislator today at 1-800-978-2878 and demand that the tax breaks for the foreign mining corporations paid for by taxes from Nevadas working families be ended. Its time that these rich Canadian and European companies pay for the Nevada gold and silver they take! Stop punishing Nevada's working families with job, wage, and benefit cuts while giving foreigners even one dime!

  2. Too bad, so sad!!!

    Who CARES what NPRI thinks?
    Who CARES what "Chuckie" Muth thinks?
    Who CARES What Robert "Chickens" Uithoven & Keystone think?

    "We're OUTRAGED!"
    No, you are OUTRAGEOUS.
    Your man had a BAD PLAN.
    You banked on it.
    That was YOUR BAD.
    Robbing Peter to PAY PAUL is a dishonest Con Man trick.
    Now, somehow, you are "philosophically opposed"...

    The premise of TeaNut Logic that "taxes are EVIL!", even while the average TeaNut WIDELY enjoys the BENEFITS of taxes, is just plain SILLY.
    No, you're cheap.

  3. Not letting these taxes sunset does exactly what big business wants.

    It keeps a stranglehold on small business (which our Dear Governor states out loud that he needs to protect) and allows large and profitable corporations some very generous tax loopholes. It keeps in place the additional sales tax that was put on two years ago. So you know who gets the shaft there.

    So the press you hear from big business that it is not bad thing to NOT let these taxes sunset is about as two faced as they come. They could care less if our kids have go to crowded classrooms or schools lacking maintenance. Their children probably go to private schools.

    Let the small business and the working people pick up the tab while they shelter their tax breaks.

    The Republicants at work, so enjoy it. This Governor is another Jim Gibbons with a better suit and a prettier smile.

  4. "the liberal slant is obvious."

    then read the RJ exclusively --- they've got all the ignorance you're looking for. I suggest Sherm's stuff --- fact free red meat for real people like you.

  5. What good is a few dollars in your pocket when the streets are filled with potholes, when the schools lack the funds to do their job, when the air you breath is dirty, when the 911 call takes too long for lack of staffing, when your home burns down from the delay in response, when you are afraid to go out at night because of the gangs?

    We elect politicians who tell us they can cut taxes but not programs. It has led us to this crisis.

    The total tax burden -- for all federal, state and local taxes -- dropped to 23.6% of income in the first quarter, according to Bureau of Economic Analysis data.

    By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s -- a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year.

    Wake up for Christ's sake and look at objective facts.

    The rich make out like bandits while the rest of us struggle.

  6. So, our Governor is listening and beholden to an uneducated, "conservative" extremist. No wonder this state is in so much trouble. It reminds me of when Nancy Reagan (and presumably her husband) would consult with an astrologist for "educated" advice or the Tzarina of Imperial Russia listening to Rasputin.
    It's time for our leaders to listen to the people and not stink-tanks. Let's have a state-wide referendum on the issue of keeping the sunset taxes alive.

  7. No, the Supreme Court's ruling "couldn't apply to all county and local government dollars". It applies to local taxes and fees adopted for local purposes, which was what the 2010 Special Session of the Legislature tried to hijack.

    Below is what the whole of Article 4, Section 20 of the Nevada Constitution says. None of it says that the state cannot keep the entirety of state sales taxes or any other taxes levied and collected by the state. In fact, it says nothing forbidding the state from recalling to Carson City real estate taxes authorized by the Legislature and collected by the counties and cities. This is a general law (not home rule) state and the counties are mere branches of the state government. To understand Section 20, non-lawyers need to read the first sentences of Section 20, not just the enumerated list beneath it. What Section 20 is talking about is passage of laws which would be in effect in ONLY in certain counties like Clark County or cities like Reno:

    "Section 20. Certain local and special laws prohibited. The legislature shall not pass local or special laws in any of the following enumerated cases--that is to say:

    Regulating the jurisdiction and duties of justices of the peace and of constables, and fixing their compensation;

    For the punishment of crimes and misdemeanors;

    Regulating the practice of courts of justice;

    Providing for changing the venue in civil and criminal cases;

    Granting divorces;

    Changing the names of persons;

    Vacating roads, town plots, streets, alleys, and public squares;

    Summoning and impaneling grand and petit juries, and providing for their compensation;

    Regulating county and township business;

    Regulating the election of county and township officers;

    For the assessment and collection of taxes for state, county, and township purposes;

    Providing for opening and conducting elections of state, county, or township officers, and designating the places of voting;

    Providing for the sale of real estate belonging to minors or other persons laboring under legal disabilities;

    Giving effect to invalid deeds, wills, or other instruments;

    Refunding money paid into the state treasury, or into the treasury of any county;

    Releasing the indebtedness, liability, or obligation of any corporation, association, or person to the state, or to any county, town, or city of this state; but nothing in this section shall be construed to deny or restrict the power of the legislature to establish and regulate the compensation and fees of county officers, to authorize and empower the boards of county commissioners of the various counties of the state to establish and regulate the compensation and fees of township officers in their respective counties, to establish and regulate the rates of freight, passage, toll, and charges of railroads, tollroads, ditch, flume, and tunnel companies incorporated under the laws of this state or doing business therein."