AB376 will show if Sandoval is serious about his no-new-tax promise; Updated

Victor Joecks

After Gov. Brian Sandoval broke his no-new-tax pledge and brokered a deal to raise taxes by $620 million in the next two years, it’s logical to wonder how fiscally conservative the governor is.

AB376 will give Nevadans an insight into the question. AB376, passed literally during the last minutes of the session, would allow the owners of the Reno Aces to charge additional taxes for their own benefit and add a $2 room tax to downtown hotels.

Proposals that will allow the Reno Aces to add a surcharge for parking, concessions and tickets passed in the last 2 minutes of the session that ended on its scheduled deadline of 1 a.m. Tuesday.

Also passing at the wire was a plan to charge a $2 room tax at downtown resorts to fund the renovation of the downtown National Bowl Stadium, Reno Events Center, Ballroom and Livestock Events Center. …

The proposal to refurbish the bowling stadium is tied to critical tourism negotiations, city leaders said. At stake may be a 20-year commitment from the United States Bowling Congress to come to Reno each year for annual tournaments.

This bill has many of the same problems as SB501, which would have allowed Clark County to use tax dollars to subsidize a sports arena. I’ve previously described the problems with government-subsidized sports pork here.

The question is now this: “What will Gov. Sandoval do?”

AB376 clearly contains a tax increase. Here’s some of the language from the bill.

An ordinance enacted pursuant to subsection 1 must impose a surcharge of $2 on the per night charge for the rental of a room in a hotel in the district that holds a nonrestricted gaming license.

Sandoval has previously opposed new taxes, with one glaring exception.

Is that exception a true exception or will that exception become the rule? Watching what Sandoval does with AB376 will give taxpayers a clear answer.

Update: I should clarify that AB376 is not a direct tax increase. It would enable the city of Reno, in the case of the Aces’ tax increase, and the Washoe County commissioners, in the case of the hotel room tax increase, to raise taxes after a two-thirds vote of the respective local government bodies. (H/T to Ray Hagar for pointing this out to me directly.)

The point still stands, however – if Sandoval is serious about no new taxes as a policy (whether he prevents taxes from being raised directly or prevents enabling elected officials in Reno and Washoe County to raise them), he will veto this bill.

Other problems with the bill include the fact that giving tax dollars away to private business owners is neither the role of government nor an effective economic policy.