Republican proposes grocery tax but says hands off mining
Assembly Minority Leader Pete Goicoechea floated what passes for an inspired idea in northeastern Nevada when he recently suggested taxing food to help offset the state's gargantuan budget woes.
"I believe that we should have had a 2 percent sales tax on food on the ballot this fall," the Republican told Sam Shad's "Nevada Newsmakers" audience.
Although some people believe such a tax would take a change in the state constitution, a process requiring voter approval in consecutive general elections followed by a vote of the Legislature, Goicoechea believes one thumbs-up from the taxpayers would be enough to create the tax, which could raise $250 million a year.
Either way, it won't be available when the Legislature meets in 2011.
Goicoechea is generally a thoughtful, pragmatic conservative, but a grocery tax is a terrible idea that would hit the poor and working class at the worst possible time. Astoundingly, Goicoechea's actually been given credit by some for having the "courage" to speak out about the likely need for taxes when others -- namely gubernatorial hopefuls Brian Sandoval and Rory Reid -- have refused to acknowledge the state will probably need revenue enhancement to balance the next budget.
That's like giving the first kid to jump off the roof credit because he filed a flight plan.
In his defense, the White Pine County rancher said Tuesday, "I wasn't proposing a tax, only saying we should pose the question to the voters. As we move through this budget cycle and cut programs, some essential services will be cut. I'm saying, the bottom line is voters need to be aware of a revenue source that they completely control. They are the ones who can put it on. They can take it off."
Hard-core fiscal conservatives are less than enthused. Conservative political activist Chuck Muth writes this week in an e-mail: "That would be bad enough if a tax-happy Democrat had proposed it ... but why in the world would the Republican LEADER in the state assembly propose something so insanely preposterous right smack dab in the middle of this Great Recession?"
Even after taking a machete to Muth's hyperbole, you're left with a genuine head-scratching moment. Why would a man who represents Eureka County and constituents from Pershing, White Pine, Churchill, Humboldt, Lander, Lyon and Washoe counties, suggest something as onerous as a grocery tax?
Surely by coincidence, in rural Nevada Goicoechea's political groceries are delivered with the approval of Nevada's mining industry, which is riding record-high gold prices to unprecedented profits and pays a comparative pittance in taxes. At a time the gaming industry is flat and the construction trade is essentially bankrupt, Big Gold keeps on rolling along.
In Goicoechea Country, "Mining activities account for over 94% of Eureka County's assessed valuation," according to its Comprehensive Annual Financial Report for the fiscal year ending June 30, 2009. "The major gold producers are still producing approximately the same amount of gold as they were five years ago."
Big Gold knows it will be targeted in 2011, perhaps by a legislator who, in a quavering voice, might muster the real courage to suggest taxing mining. That legislator won't be Goicoechea, who at least is candid about it.
"There's no doubt about that," he said. "I represent all or part of eight counties. There's no doubt mining has definitely insulated northeastern Nevada, to a certain extent, from the economic impacts occurring in Northern Nevada and Southern Nevada. The trouble with mining is, it tends to run in cycles."
The trouble with people is, they tend to eat in cycles, preferably every day.
Before Goicoechea again floats a daffy plan to squeeze gold from the sale of bread, milk and eggs, he should look in his own backyard.
John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.
