That which we call a fee by any other name would smell

Really.

One of the recommendations from the Spending and Government Efficiency (SAGE) Commission is that a definition of fee be placed into law. If such a definition had been in place, it would have blocked a few of the “solutions” the Legislature approved to balance the state’s budget for this year and next.

Here’s the SAGE Commission’s definition of a fee: a charge made to recover the cost of operating the program or providing the service, including indirect cost (overhead). A fee shall not be used for any purpose other than the actual direct and indirect cost of the program or service being provided to the end user.

In other words, a tax can go into the general fund and be used for any purpose. A fee has a much more specific use. If that definition had been the law, two of the fees approved — a mining fee and an increase on foreclosure fees — would have been verboten or would have been called what they actually are: tax increases.

The mining claims fees are one-time only (supposedly) and will raise an estimated $25 million for the state’s general fund.

The mining industry volunteered to pay that.

Wisely, legislators dropped the idea of raising another $25 million by having the mining industry prepay taxes, something it has already done for a year.

“They dropped the prepayment. It was a philosophical decision. It was just moving today’s problem to tomorrow,” said Tim Crowley, president of the Nevada Mining Association.

The net proceeds taxes paid March 1 came in at an estimated $58 million, but that would have gone into state coffers anyway.

When all was done, the mining industry voluntarily came up with an estimated $25 million in new money to help balance the state’s budget, not the $100 million that was first touted. That’s not enough to stop the Progressive Leadership Alliance of Nevada’s initiative to squeeze more money out of the industry.

The fee increase on foreclosure notices went from $50 to $200, at the urging of Assembly Speaker Barbara Buckley, D-Las Vegas. The $50 covers court costs and is a legitimate fee. The additional $150 goes straight to the general fund. It’s a tax masquerading as a fee. Foreclosure fees are expected to raise $13.8 million. Lenders are not supposed to pass the fee-tax on to the customer, but it’s pretty easy for other costs to be padded so the consumer is paying a hidden tax.

The M Resort is taking this fee distinction seriously. It just asked for the return of about $700,000 in fees paid to the Clean Water Coalition that instead were seized by the Legislature to balance the budget. The resort’s attorney, Chris Kaempfer, said the $700,000 the resort paid was for a specific purpose and, if it wasn’t being used for that purpose, M Resort wants the money back. The attorney contends it’s not right, it’s not fair and, in his opinion, it’s not legal to extract fees from M Resort for one purpose and then change the purpose.

If it ends up in court and M Resort wins, ramifications to the budget fix could be in the millions and could force another special session.

A fee shouldn’t be a tax in disguise. If governors and legislators want to tax Nevadans, it should be done directly, not in a deceitful way. The six-day special session was done in a hurry, with numbers and estimates of revenues and cost savings thrown out with abandon.

The 2011 session needs to be more honest about its actions than this special session and past regular sessions have been. Start by defining a fee.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.