Puppetmasters on the throne

Geoffrey Lawrence

A quintessential value of democratic governance is that voters are able to hold elected officials accountable for their actions by voting to keep them in or remove them from office. This mechanism of democratic accountability allows citizens to respond to the policies imposed by their elected leaders. However, when elected officials begin to delegate their policymaking powers to unelected officials, this mechanism begins to erode and citizens become increasingly disenfranchised in the policymaking process.

That is exactly what is happening right now in Nevada. 

As the 2009 regular legislative session wound down, the Senate passed Senate Concurrent Resolution 37, which called for a comprehensive study of the state's revenue structure. SCR 37 explicitly says that the study is to "review proposals for broad-based business taxes." In addition, the study is to incorporate recommendations for new government spending from a collection of special interests known as the "Nevada Vision Stakeholder Group."

Since the conclusion of the session, the legislature's Interim Finance Committee has been working to implement the components of SCR 37. The IFC selected Moody's Analytics from a pool of eight bidders to complete the tax study at a cost to taxpayers of $253,000. While funds were never appropriated for that purpose by the prescribed constitutional process, the IFC has tapped into its contingency fund to finance the study. Because the fund is designated for specific expenditures such as utility cost overruns, it appears that influential lawmakers — IFC Chair Steven Horsford and Senate Minority Leader Bill Raggio, among others — are using these reserves as a legislative slush fund to purchase their controversial tax study and its associated recommendations.

The IFC has also selected 19 voting members to the "Nevada Vision Stakeholder Group" and charged them with the task of developing quality-of-life goals for Nevadans over the next five, 10 and 20 years. These goals are to be set within the five major areas of state spending — clearly indicating that their recommendations are to constitute a template for a potentially massive growth in the size, power and spending of government.

Nevada Vision Stakeholder Group members have been drawn primarily from public employee unions, elected officials of local governments and firms who contract with the state or receive state money in some way. All of these special-interest groups have a vested interest in seeing state spending grow. The panel has no taxpayer advocates who might seek to limit government growth and mitigate your rising tax burden. Similarly, there's no explicit small-business advocate. Neither the Reno nor Las Vegas chamber of commerce is represented.

Two of the stakeholders represent large gaming interests, while one represents the mining industry. Clearly, high-tax and high-spending lawmakers recognize that, in order to fundamentally change the state tax structure, they will need buy-in from these two industries. Gamers and miners, in turn — from their privileged positions on the panel — will maneuver to ensure that the rising tax burden will not fall on them.

Yet, what voters should find most disheartening about this elaborate ploy for higher taxes is that lawmakers are cynically attempting to off-load their policymaking responsibilities onto unelected special interests — simply so they can evade the taxpayer backlash they know their predatory scheme will produce. These legislators have engineered the process to achieve the results they want, yet the stakeholder group will be used as their political fig leaf. 

When the legislature reconvenes in 2011, lawmakers will undoubtedly claim that there is broad consensus, as reflected by the stakeholders, on the need for higher taxes and unprecedented growth in the size of government. They will claim to have little choice but to enact the recommendations made by the stakeholder group on new spending and the tax increases recommended by Moody's.

It is a farce.

Geoffrey Lawrence is a fiscal policy analyst at the Nevada Policy Research Institute.

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Geoffrey Lawrence

Geoffrey Lawrence

Director of Research

Geoffrey Lawrence is director of research at Nevada Policy.

Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission.  Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association.

From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society.  Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics.  He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation.

Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke.  He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.