Why the Governor’s Tax-Hike Panel Failed

The Governor’s Task Force on Tax Policy has completed the specific tasks it was directed to do.

So why, then, did the panel fail to accomplish the most fundamental purpose for which it was formed?

Panel member Brian Greenspun candidly acknowledged that purpose this summer. “The reason there is a task force,” he wrote, “is so that both the governor and our legislators can take the easy way out of raising taxes by blaming their much-needed actions next year on a panel of respected private citizens.” 

Greenspun may have been speaking out of school, but what he said was self-evident. After all, this is only the latest Governor’s Task Force to Pretend to Be Objective While Really Not. Bogus “citizen panels” to “recommend” tax hikes are an old ploy in Nevada politics. The last hike on business—the 1991 employee head tax—was concocted exactly this way. Assembly Ways & Means Chairman Marvin Sedway even admitted as much several times in 1987 before the state senate. He said the “blue ribbon” committee he was then proposing—eventually titled “The Governor’s Commission to Study the Fiscal Affairs of State and Local Governments in Nevada,” and fronted by one Kenny Guinn—“was intended to be used as a lobbying arm to support tax increases.”

This gets to one of the reasons why the current tax panel has failed to get the governor and lawmakers off the hook, per Greenspun’s recipe: The device is now so creakingly ancient and transparent that it fools no one.

Evidence that Nevada voters are yawning at the charade surfaced in a statewide survey this August. Though voters have been hearing about an alleged “structural deficit” for four years, a solid 59 percent still don’t believe that higher taxes plowed into state schools, higher ed, social services and prisons would be worthwhile. They‘re right.

But even if the basic idea behind the panel hadn’t been so unoriginal and long-in-the-tooth, there were many other reasons why the task force would finally lack credibility.

First, it was in a deadly bind from the beginning. Its authorizing legislation—Assembly Concurrent Resolution 1—was less than honest in critical respects:

To push the agenda of the National Education Association, the resolution asserted Nevada’s problem is a “structural deficit”—when it is not. (A detailed analysis of the question is available on the www.npri.org web site.)

To protect profligate spending going to powerful special interests, the authors of ACR-1 did just as Marvin Sedway had done 14 years earlier and blocked any review of state spending programs. An open and honest approach to fiscal problems involving the entire statewide community would never have done that.

This intentionally muddied moral context in which the task force started out has naturally continued to contaminate all of its proceedings. Panel members, to even accept appointment to the task force, had to first be “easy” with the prescribed agenda of ignoring half the relevant subject matter—namely, chronic state over-spending. They also had to be either already committed to imposing a bigger tax burden on their fellow citizens or reliably listless enough to be herded in that direction.

The fruit of this tree was predictable, but its actual toxicity in practice was still startling. In essence, task force appointees nonchalantly endorsed dropping a nuclear bomb on the future of the Nevada economy. They did so by blithely recommending perhaps the most destructive scheme of government predation known to man, a gross receipts tax (GRT) on every business in the state.

In their defense, panel members have pled that they were “only following orders”—that ACR-1 directed them to find a more “stable” taxation scheme and that GRTs are reputed to have more stability. But “stable government revenues” is only political doubletalk for government that preys on citizens all the time—taking no note of periods of economic distress. Panel apologists are in effect saying that, because ACR-1 was dictated by economic ignorami, task force members bore no moral responsibility for their report.

Worst of all, the centerpiece tax the panel is recommending is an-almost perfect recipe for deeper corruption in Nevada government—an engraved invitation for the rich and powerful to wangle special deals for themselves. Indeed, even before the task force had written its report, it had again crumpled before the bullying of the Nevada Resort Association point man, Mike Sloan, and agreed to exempt casinos from paying the full weight of the tax.

It was the final nail in the coffin for the panel’s credibility.

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