Sunday, April 04, 2004
Copyright © Las Vegas Review-Journal

COMMENTARY: Is Nevada ready to grow up?

So long, Las Vegas. I'm leaving town.

After four years here, my family and I are returning to Southern California, where I will join the editorial page staff of The Press-Enterprise in Riverside, writing opinion pieces for right-thinking folks in another growing Western community. I'm looking forward to the move, though I have some mixed feelings about leaving.

One thing I will not miss about Las Vegas is the company town atmosphere, and the disproportionate control a tiny cabal of dealmakers and insiders continues to wield in the political, economic and cultural activities of this region. The kingmakers continue to treat the state as their private sand box, and so long as they hold sway, it will be difficult for the Silver State to develop independent community leaders who can place the long-term interests of all Nevadans ahead of the parochial concerns of a few.

To be sure, much of the country has been governed by an old-boy, insider network at one time or another. But most of these cliques were uprooted years ago: New York's Progressives got rid of Tammany Hall; the civil rights revolution ousted the racist politicians of the Jim Crow South.

Nevada hasn't yet experienced a similar uprising against its political and corporate elite. Perhaps the lingering outrage over the 2003 tax hikes will spur such a grass-roots revolt.

But if Nevada wants to get beyond the back-room deals and nepotism, the old boy network has to go.

After all, it's becoming clear that the establishment has been out of its depth in its attempts to "manage" some of the major issues other states have confronted. Here are two clear failures of leadership that took place during my brief tenure at the Review-Journal:

• The energy crisis. When I arrived in early 2000, the state was poised to introduce competition into the electricity market. That shift should have encouraged the construction of new power plants and enhanced the financial stability of the soon-to-be-former monopoly utilities, Sierra Pacific/Nevada Power.

Then California's bogus "deregulation" imploded. And rather than go forward with a competition model that took years to develop, the political establishment -- including Gov. Kenny Guinn and the legislative leadership -- folded faster than a cheap lawn chair. In retrospect, had the Legislature stayed the course, odds are we'd have more native generating plants, Nevada Power would not be flirting with bankruptcy, and the brief blackout in July 2001 would have never occurred.

• The great tax debate. To this day, no one has justified the magnitude of the tax increase passed by the 2003 Legislature. Under the old tax system, revenues were continuing to expand in excess of the growth in the economy.

But the government's appetite for money is insatiable. And the business establishment (aka the gamers) made a tacit deal with the dev ... er, the teachers union: We gamers won't object to massive tax increases so long as somebody else has to pay them. Hence the call for a gross-receipts tax on non-gaming businesses.

Fortunately, that campaign failed, though a record-setting tax hike still went into effect.

Even so, the gamers' shortsightedness will eventually catch up with them. The education establishment's friends in the Legislature have made sure that vouchers, charter schools or other genuine measures of accountability never get off the ground.

So there's no countervailing market force to ease the demands for higher taxes to pay for increasingly lucrative compensation to those who toil in failing schools.

The gamers have never openly acknowledged that -- even when they pay for legitimate public services -- all taxes are a drain on productive activity. By refusing to take a principled stand against excessive taxation, one day soon the casinos will find themselves in the public employee unions' cross-hairs.

Nevada has always been a company state. The dominant industry has changed from time to time. First, it was mining. Then, railroads. Now, it's gaming ... though the casinos may have to surrender the crown to the public employee unions, as government becomes Nevada's primary "industry."

To avoid that fate, Nevadans will have to become more engaged in local politics. You'll have to become active participants in civic life. You'll have to learn to govern yourselves.

If there's any good news -- from a purely selfish standpoint -- it's that I'll have the luxury of observing these developments from the outside.

Rick Henderson is a Review-Journal editorial writer.