The Sign on the Senate Doors

By Steven Miller
  • Monday, August 18, 2003

One of the most interesting news reports that never made it out of the 2003 Legislative sessions would have been the story of the sign that several state senators posted on their office doors.

“Ask Me About Gaming’s Plan for Nevada,” it said. And it reportedly drove Nevada Resort Association lobbyists crazy.

State Senator Ann O’Connell put the ad hoc poster on her door, she told NPRI, and was joined by senators Terry Care, Barbara Cegavske, Mike McGinness, Sandra Tiffany and Maurice Washington.

The reason for the sign was the common conclusion that the senators had reached regarding the heavy new tax regime for which Nevada Resort Association (NRA) lobbyists—including, of course, the Guinn administration—were twisting arms and making threats.

That conclusion? That the real goal of the new tax structure sought was not to address any genuine shortfall in state revenues, but instead to guarantee the resort association itself of permanent political control over the Silver State for years to come.

It was, interestingly, the same conclusion that many independent fiscal analysts and economists had also reached. 

One such well-known economist was Dr. Robert Schmidt, of the Demographic Solutions consulting firm. Schmidt was the principle author of separate tax analyses published in 2003 for the Nevada Association of Industrial and Office Properties and for the Northern Nevada business group, Citizens for Prosperity & Responsibility.

After examining closely the spending and tax recommendations of the NRA-dominated Governor’s Task Force on Tax Policy, then those of the Guinn Administration itself, he could come to no other conclusion, he told colleagues.

Massive evidence from other areas also supports the senators.

First, the centerpiece of both plans was a gross receipts tax—the single-most hated business tax in America wherever it has been tried. The GRT is thus a tax virtually optimized to drive existing non-gaming businesses out of Nevada—while keeping out-of-state businesses from moving in.

Second, it was revealed this July that the GRT had been the object of special research by the NRA’s point man on the tax task force, Mandalay Bay executive Mike Sloan. To gather information about the tax, Sloan, it turned out, had traveled personally to Washington state and conferred with officials there.

However, during the months last year in which he dominated the tax task force with vociferous advocacy of the GRT, Sloan conveniently failed to mention to his colleagues the powerful, bipartisan consensus in Washington state—that the GRT should be abandoned at the first opportunity!

What’s behind that Washington state consensus? The reality that the GRT is so destructive to business competitiveness that it drives businesses from the state! (Washington State’s own study:

Third, there is the long history of the Nevada Resort Association’s very public and ever-more-frantic anxiety about the diversification of the Nevada economy—in other words, about the rise of alternative business leaders inclined to challenge the resort association’s political dominance, plus many new voters happy to back such a challenge.

Exhibits A and B, in this regard, are the NRA’s bogus 1991 and 1998 reports, both titled “The Fiscal Impact of Population Growth in Nevada,” and both presented to Nevada lawmakers. Each report was done for the NRA by the corrupt, now infamous and now-defunct Arthur Andersen accounting firm—and each has been devastatingly refuted.

A fourth continent of evidence that objectives behind the NRA tax-increase agenda were political, not fiscal, involves the targeting of Nevada banks. Senator O’Connell says that in her first meeting with Kenny Guinn, soon after his initial 1998 election, “the first thing he talked about was how banks were getting off scot-free.”

Not only was the allegation entirely false, but Guinn had just been elected on a pledge of no new taxes—with an economy that was booming!

O’Connell also notes that the NRA’s insistence on some kind of major tax on banks was second in intensity only to its vehement push for a GRT. The reason, she believes, is the key role that banks play in diversification of Nevada’s economy—providing loans that assist non-gaming businesses to start up and to expand.

It was that role, she believes, that put banks on the NRA’s enemies list—and keeps them there today.

The banks, however, aren’t alone. The resort association agenda remains the same—making Nevada a less business-friendly environment, with ever-higher taxes on non-gaming businesses. That means that every Nevada citizen, indirectly, is also on the NRA’s Enemies List.

Now, that’s some “Plan for Nevada.”

Steven B. Miller is policy director for the Nevada Policy Research Institute

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