Listening to Democratic Gov. Steve Sisolak’s address on Wednesday brings to mind the old saw about round holes and square pegs. He promised a whole sack of new goodies along with expensive gift cards for Big Labor, yet maintained his budget will include no “new taxes.”
In reality, the latter pronouncement is along the lines of Bill Clinton’s famous misdirection, “It depends on what the meaning of the word is is.”
Both the state’s modified business tax and the government services tax tacked on vehicle registrations are scheduled to be reduced on June 30, the last day of the current fiscal year. But any casual observer of government understands that taxes — even those promised to sunset — almost never go away. And as sure as night follows day, Gov. Sisolak proposes both levies be extended into the great beyond. This would provide lawmakers with an additional $138 million to spend over the next two-year budget cycle.
So Gov. Sisolak’s spending blueprint does indeed contain tax increases. The taxes may not be “new,” but they are tax hikes just the same. They will also make Republican lawmakers, particularly in the state Senate, relevant.
The state constitution mandates that tax hikes be approved by two-thirds majorities of the Assembly and Senate. While Democrats have reached that threshold in the Assembly, they’re one vote shy of the magic number in the upper chamber. They’ll need some help from across the aisle to implement the governor’s faux “no new taxes” budget. Grab the popcorn.
Maintaining current revenue streams is an integral part of the Gov. Sisolak’s plan to appease various progressive special interests by expanding the size and scope of state government. There’s $10 million “for the creation and preservation of affordable housing.” A higher minimum wage. An expansion of state mental health services and higher Medicaid reimbursement rates for hospitals. Healthy raises for public school teachers and other government workers. Millions for job training. Even a new “Governor’s Office for New Americans” to help “our newest neighbors … navigate government services,” whatever that means.
Some of these may indeed be worthwhile endeavors. But let’s be honest: They will require tax increases on Nevadans.
And then we have perhaps the most fiscally irresponsible proposal to surface in state history: Gov. Sisolak seeks to allow state workers to collectively bargain. This and repealing the state’s right-to-work law have been at the top of Big Labor’s wish list in Nevada for half a century. But even previous Democratic governors have refused to accede on collective bargaining, understanding it is a recipe for long-term fiscal disaster.
Unlike in the private sector, where competition helps temper union demands, the government holds a monopoly on most services it provides. When government unions pull up to the bargaining table, who represents the taxpayer on the other side? Far too often, the answer is other public-sector employees with little incentive to act responsibly on behalf of those who pay the bills. In other words, nobody. The result is a rapid upward trajectory of wages and benefits that has left many local governments — and even some states — on the verge of bankruptcy.
“Public-sector unions … distort the labor market, weaken public finances and diminish the responsiveness of government and the quality of public services,” Daniel DiSalvo, an assistant professor of political science at City College of New York, writes in the Winter 2019 edition of National Affairs. “Many of the concerns that initially led policymakers to oppose collective bargaining by government employees have, over the years, been vindicated.”
Given the reality in many other states where Democrats have turned over the steering wheel to public-sector unions, Gov. Sisolak’s collective bargaining proposal seems to a cynical and willful attempt to drive the state into the ditch in exchange for political support. If minority Republicans can accomplish only one thing during the coming legislative session, it should be to ensure this awful scheme is dragged behind the barn and shot.