You can tell the powers that be are concerned about The Education Initiative because the level of rhetoric against it is rising.
The initiative, proposed by the Nevada State Education Association, would impose a 2 percent margins tax on Nevada businesses earning more than $1 million and direct the proceeds to the state’s schools.
But to listen to business and political leaders, it’s as if “World War Z,” “2012,” “Armageddon” and “The Day After Tomorrow” were all happening at once.
MGM Resorts International CEO Jim Murren showed up on “Ralston Reports with Jon Ralston” last week, saying the tax was too high, that it may not end up funding schools and that it would cost his company “tens of millions.” But those criticisms came even as Murren acknowledged Nevada’s education system is failing to build a community that can attract workers, especially those involved in high-tech industries. And Murren admitted Nevada schools need more money.
“And I promise that I’m going to try to raise revenue for education,” Murren said. “This particular margins tax, supported by a union to support education, which we’re not even sure will go to education, will unduly burden my company. We might have to cut our 401(k), there might be other things we have to do,” Murren said.
Telling MGM employees not to vote for it would have been even less subtle, but the message was clear anyway.
It’s true that Nevada casinos have suffered in the recession; although revenue is up in the Silver State, casino companies just reported their fifth straight annual net loss, according to the Review-Journal’s Howard Stutz. And Murren is correct that, while the money from The Education Initiative would be deposited in the state’s schools account, only public outrage would prevent lawmakers from taking it out, or reducing the amount of money they’d normally devote to education.
But Murren’s promise — sincere though it may be — is no guarantee that schools will get more money without The Education Initiative. Casinos have supported new taxes before, from a gross receipts levy (in 2003) to a smaller margins tax (in 2011), but none have become law. And if voters reject The Education Initiative, chances are already-timid lawmakers would interpret the result as public opposition to business taxes in general.
Then there’s state Sen. Mark Hutchison, a Republican candidate for lieutenant governor, who went down to Laughlin to campaign and spoke out against the tax, according to the Laughlin Times.
The Education Initiative “is the biggest threat to our economic recovery you can possibly imagine. It’s the biggest threat to business in Nevada in my lifetime,” said Hutchison, a business litigation attorney. “You can’t overstate how bad it’s going to be in the state of Nevada.”
Obviously, you can: According to statistics compiled by analyst Jeremy Aguero, nearly 87 percent of businesses in Nevada will pay nothing under The Education Initiative, although the 13 percent that will pay comprise the largest companies and the most business activity.
Hutchison predicted businesses would flee Nevada for “Idaho or Wyoming” if The Education Initiative became law. In Idaho, at least, they’d have to pay a business tax, just as they would in all but four states currently.
So what’s Hutchison’s plan for education? He addressed that, too: “The first thing I would ask — and I’ve asked several times — is how much is enough?” he said, adding later, “Before I would agree or support any kind of tax increase I would want to know first, ‘Why isn’t what we have currently enough, and secondly are we using our money we currently have in the system efficiently and effectively?’”
A fair enough question. How about at least funding our schools to the national average? We might try that.
The real biggest threat to our economic recovery is the lack of a strong, diversified economy. And we’re not going to change that — no matter how we try — without first fixing schools. In that sense, education is the only economic development plan that will ever really work. But it will take money, and The Education Initiative represents the first real chance Nevada has had in years to raise that money. If we listen to the doom-and-gloom rhetoric now, and miss that chance, we’ll almost certainly get more of the same.
And how’s that working out for us?
Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or email@example.com.