Sandoval: Margins tax would be a ‘fatal blow’ to Nevada economy

Republican Gov. Brian Sandoval on Tuesday said Nevada voters shouldn’t be fooled by the name of a proposed “Education Initiative,” saying proponents are trying to sell a new tax that would deliver “the fatal blow” to many Nevada businesses and halt the state’s economic recovery.

“We’re going to need everybody’s help to defeat one of the worst tax proposals Nevada has seen for many, many years,” Sandoval told more than 300 lawmakers and business leaders at the Nevada Taxpayer Association’s 92nd annual luncheon, which took place at The Orleans hotel-casino.

Sandoval, the association and most Nevada businesses oppose the proposed 2 percent margins tax, which will be Question 3 on the Nov. 4 ballot. The initiative is backed by the Nevada Education Association teachers’ union.

The governor noted he was “preaching to the choir” but said he needs help to persuade voters to reject the tax. At least 22 of the state’s 63 lawmakers were in the audience, almost enough to hold “a special session,” Sandoval joked.

The union proposed the measure after the 2013 Legislature failed to approve any new taxes for education, although there is no guarantee that margins tax revenue would be spent on education. That is up to the Legislature and the governor, who must agree on future state budgets during the next session in 2015.

Sandoval, a former federal judge, used lawyerly language to slam proponents for using education to market the tax.

“All things being equal, we prefer to keep more of our earnings,” Sandoval said. “That fact makes new taxes a tough sell. As such, the proponents of new taxes, like any good marketer, ignore what’s unpopular about the product. Instead, they point to the alleged benefits of the tax, rarely mentioning the costs.”

The governor said that tactic “switches the burden of proof” to opponents.

“They force the opponents to make the case and prove why the tax would be harmful or unnecessary,” said Sandoval, who has issued previous warnings about the proposal. “Speaking out against new benefits is not popular. Hard truths rarely are. … Tax revenues, as we all know, have to come from somewhere, and someone will have to pay.”

Sandoval said he recently visited a 40-year-old “mom and pop” company with 148 employees whose owners said that if the margins tax passes, they will be forced out of business.

“They told me if the margins tax were approved, that would be the fatal blow to their business,” he said, adding workers who have been with the company since its start would lose their jobs. “The margins tax would be the fatal blow to many businesses, and that is something that I just cannot accept.”

He said Nevada has added 60,000 jobs since he took office in 2011, but the state lost some 170,000 jobs overall during the recession and has “a long way to go” to recover. The margins tax could block that, he said.

“Nevada’s economy is still fragile, and nothing is certain” despite 36 straight months of job growth, he said. “The margins tax, if approved, will jeopardize Nevada’s recovery.”

Applied Analysis recently estimated the proposed 2 percent tax on businesses making at least $1 million in annual revenue could raise $650 million to $750 million annually. But critics note that even unprofitable companies would have to pay the tax based on revenues alone.

If approved, Nevada’s business taxes would be among the five highest in the nation, the research firm found. That and other factors make it difficult for those who back efforts to increase education spending to give full-throated support to the initiative, including many Democratic lawmakers and leaders.

“Spending is so much more enjoyable when you ignore where the money comes from,” Sandoval said.

“But we must try to resist the easy temptation to forget the burdens of taxation, even when that burden may fall on someone else.”

Joyce Haldeman, the assistant superintendent and chief lobbyist of the Clark County School District, was in the audience for Sandoval’s speech but declined comment afterward.

Sandoval, who will be on the ballot in November, has long campaigned on a no-new-taxes message. Conservatives have criticized him for extending a package of taxes, including a levy on on payrolls, that were supposed to sunset. But he argued he has eliminated the payroll tax for 74 percent of Nevada businesses.

So far, Sandoval faces no serious Republican or Democratic opposition for re-election to a second four-year term.

Contact reporter Laura Myers at or 702-387-2919. Follow her on Twitter @lmyerslvrj.

News Videos
Report knocks Las Vegas for ozone, but local officials cite improvement
The American Lung Association says Las Vegas has some of the highest ozone levels in the nation, but Clark County air quality officials insist the community is improving when it comes to the smog-causing pollutant. (Michael Quine)
It's Rattlesnake Season
As temperatures start to rise in the Las Vegas area, people are heading outside for various activities. Possibly hiking and maybe with a dog. People and pets aren’t the only creatures coming out of their winter homes – so are snakes. (Mat Luschek/Las Vegas Review-Journal)
NHP Trooper sustains dog bite during rescue
A small dog loose on the freeway bites the hand of an Nevada Highway Patrol Trooper that saved it.
Henderson fails to investigate the drug overdose death of one of its officers
Henderson Police Department's internal affairs did not investigate the 2014 drug overdose death of an officer. (Las Vegas Review-Journal)
NHP trooper and good Samaritans save a life
Nevada Highway Patrol trooper Jacob Fisher and a group of good Samaritans performed lifesaving CPR on a driver suffering a heart attack last month in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Syphilis Awareness Day
Dr. Joe Iser, District Health Officer of the Southern Nevada Health District, discusses the effects and issues with syphilis in the Las Vegas community on April 16, 2019. (Mat Luschek/Las Vegas Review-Journal)
Las Vegas diocese IDs 33 ‘credibly accused’ of sexual abuse
The Catholic Diocese of Las Vegas released a list on Friday of 33 “credibly accused” of sexual abuse who at some point served in the Las Vegas Valley. (Michael Quine/Las Vegas Review-Journal)
CCSD Arbor View meeting
The Clark County School Board hears from the public about racial tensions at Arbor View High School on Thursday, April 11, 2019. (Amelia Park-Harvey/Las Vegas Review-Journal)
Parents of autistic student battle Clark County School District
Joshua and Britten Wahrer, parents of a special education student, are battling the Clark County School District for the right to equip their son with a monitoring device. (Amelia Pak-Harvey/Las Vegas Review-Journal)
New Metro homeless outreach a shift in strategy
Lt. Joe Sobrio discusses the new homeless outreach team for Metro. (Rachel Aston/Las Vegas Review-Journal)
Prayer for Opportunity Scholarships
Las Vegas students and adults hold a prayer meeting about the Opportunity Scholarship program on Thursday, April 4, 2019. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Solar scams on the rise in Nevada
As Nevada’s solar industry has made a resurgence, solar scammers have followed suit.
Clark County schools and the late bus issue
Year after year, late or no-show buses in the Clark County School District draw the ire of parents and students alike. One year the problem even prompted a parent to crack a school bus window in frustration over a late drop-off. (Mat Luschek/Las Vegas Review-Journal)
I-15 southbound congested near Primm Sunday afternoon
Drivers heading toward California on Interstate 15 should expect heavy traffic and a 13-mile backup Sunday afternoon.
Learning lifesaving skills in advance of fire season
Students and firefighters attend a training session at Fire Station 80 in Blue Diamond, Saturday, March 30, 2019. The training session helps volunteer firefighters obtain necessary annual certification to work wild fires.
Car restoration behind prison walls
Inmates share their experiences working for the Southern Desert Correctional Center auto body shop in Indian Springs while learning valuable skills.
Parent remembers Las Vegas boy killed by car
People visit a memorial at the intersection of South Fort Apache Road and West Arby Avenue at at Faiss Park Wednesday, March 27, 2019, where Jonathan Smith, 12, of Las Vegas, died after he was struck while crossing Fort Apache Monday. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Couple left with surprise medical bills after visit to the hospital
Michael Pistiner took his wife, Marta Menendez-Pistiner, to the ER in January after she fainted twice and appeared to be having a seizure. Despite paying $856 monthly for health insurance, the two, self-employed musicians, were stuck with more than $5,700 in hospital and doctor bills after than hour-and-a-half visit. Caroline Brehman/Las Vegas Review-Journal.
Las Vegas police brief the media on fatal crash
Metropolitan Police Department Capt. Nick Farese addresses the media about a car accident at South Fort Apache Road and West Arby Avenue that left one minor dead and one hospitalized on Monday, March 25, 2019. (Mike Shoro/Las Vegas Review-Journal)
Former Arbor View parent talks about racial issues at the school
Lawanna Calhoun, a former Arbor View parent, talks about the state of the school. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Jim Foley talks about 30 years of living HIV-positive
Jim Foley, who was diagnosed as HIV positive 30 years ago, talks at his home in Las Vegas on Wednesday, March 13, 2019. (Chase Stevens/Las Vegas Review-Journal)
Traffic Slows to a Crawl on I-15S Near Primm
Traffic slowed to a crawl around 2:30p Sunday, on I-15S near Primm, Nevada.
Homeless residents speak about safety
The homeless residents living at the corner of Owens Ave. and Main St. reflect on how they feel about their safety after two homeless men died, one was hit crossing the street and another was beat to death by another homeless man. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
CCSD Superintendent address alleged racially motivated threats at Arbor View
CCSD Superintendent Dr. Jesus F. Jara gives update on alleged racially motivated threats against Arbor View High School, and says such threats will not be tolerated. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Super Bloom Near Lake Elsinore, California
Crowds packed the hills near Lake Elsinore on Saturday to capture a rare selfie amidst the super bloom of poppies turning the landscape purple. The super bloom was caused by the larger rainfall this year. (Todd Prince/Las Vegas Review-Journal)
Fiery accident in Las Vegas
A three-car accident on Spring Mountain Road around 6:30 pm on Monday night
A bipartisan coalition holds simultaneous rallies to promote criminal justice
A bipartisan coalition holds simultaneous rallies to promote criminal justice. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Stardust implosion anniversary
Twelve years ago today, the Stardust Resort and Casino was imploded. (Mat Luschek/Review-Journal)
Lawsuits filed against security contractors at Nevada National Security Site
Two lawsuits were filed today against the current and former government security contractors for the Nevada National Security Site, one on behalf of Jennifer Glover who alleges sexual discrimination and assault and the other on behalf of Gus Redding who alleges retaliation after he gave statements supporting Glover’s claims. (Rachel Aston/Las Vegas Review-Journal)
New housing option helps Las Vegas moms keep kids while kicking drugs
WestCare Nevada Women and Children’s Campus in Las Vegas has added a new transitional housing wing for women who have completed the inpatient treatment at the behavioral health nonprofit to help them as they go through outpatient treatment, shore up their finances and prepare to secure long-term housing. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Home Front Page Footer Listing