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| Friday, November 30, 2007 |
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Nevada's leaders have long history of taking wrong tack on taxesUnderstanding the debate about Nevada's revenue shortfall leading to budget cuts of up to 8 percent requires an understanding of history. Not just Gov. Jim Gibbons's history of hating government and wanting to hurt people less fortunate than himself, but the evolution of Nevada's tax policies. Teachers have started a petition drive for an initiative to raise the gaming tax 3 percentage points. They feel gaming doesn't pay its fair share. Gaming officials argue not that they shouldn't pay taxes, but that others should, too. The problem for gaming is that some casinos pay enough and some don't. When MGM Mirage, Sheldon Adelson's Las Vegas Sands Corp. and others build multibillion-dollar complexes outside of Las Vegas -- not to mention building here -- and Harrah's agrees to a $17 billion-plus buyout, they can't argue they would suffer financially from higher taxes and expect everyone to sympathize. Little joints off the Strip and smaller casinos downtown? Maybe.
Nevada was downright proud of its lack of state funding and services. In the 1930s, advertising itself as "One Sound State," it used its lack of an income or estate tax to attract wealthy residents trying to hold onto their money. Its population was fewer than 100,000 at the time with correspondingly fewer services. The state steered clear of gaming until 1945. Then, lawmakers enacted the first gaming revenue tax -- 1 percent -- and authorized the Nevada Tax Commission to investigate and license would-be casino operators. Why then? Organized crime figures were moving in, and investigating them properly was beyond local governments. Another issue was Nevada's mushrooming population during and after World War II. Schools were bursting at the seams. Indeed, the state was drowning in its prosperity. Sound familiar? Nevada responded by trying to avoid increasing taxes and services, and the problems worsened. Where Nevada needed major surgery, our leaders applied Band-Aids. In the late 1970s came the next step in the history of government disservice to Nevada. In 1978, Californians passed Proposition 13, which cut property taxes and increased sales taxes -- a horribly regressive, short-sighted way to run a government. Nevadans launched a similar initiative, Question 6. To block it, Republican Gov. Robert List teamed with a conservative Democratic Legislature to keep the state from becoming hog-tied. Unfortunately, it's now hog-tied to a regressive system running mainly on biennial sales and gaming tax projections -- a crime in such a fast-growing state. Thanks to another initiative Gibbons foolishly proposed and Nevadans foolishly approved, it takes two-thirds of the Legislature to change it. Gov. Kenny Guinn sought a broad-based business tax but failed for various reasons -- some his own, some due to others. Then he caved to the wishes of right-wing Republicans, hoping to force eventual cuts in state services by giving back a surplus to Nevadans, who would have benefited more from keeping it in the rainy-day fund. So, Las Vegas will add up to 40,000 hotel rooms and gaming revenue topped $1 billion in September, but Nevada may cut 8 percent from its budget. Some smaller casinos could go under with higher taxes, but banks and other businesses -- including, yes, some casinos -- don't pay their fair share and sometimes even cry poor-mouth. Meanwhile, rather than running on revenue projections, Nevada needs a consistent tax base, voted on by a Legislature meeting more than every two years, and then only for four months. If you think government is the problem and cutting state spending is the solution, you have it backward: You are the problem. Michael Green is a history professor at the College of Southern Nevada and has written extensively about Southern Nevada. He is co-author of "Las Vegas: A Centennial History." |
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