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EDITORIAL: Judge slaps down state Democrats over tax scheme

Updated September 23, 2020 - 9:04 pm

Common sense and the law prevailed this week when a Carson City judge saw through efforts by legislative Democrats and the governor to sacrifice the Nevada Constitution for their own political convenience.

On Monday, District Court Judge James Todd Russell ruled that two revenue bills approved during the 2019 Legislature were illegally enacted because they failed to pass with a two-thirds majority in the state Senate.

Under the Gibbons Tax Restraint Initiative — passed overwhelmingly by Nevada voters in 1994 and 1996 — any “bill or joint resolution which creates, generates or increases any public revenue in any form” must be approved by a supermajority in both houses of the Legislature. Otherwise, it may be imposed only through a vote of the people.

The wording is unambiguous. Yet Democrats have long chafed under the restriction — and last year, showing their disdain for taxpayers, decided to ignore it altogether.

In order to help close a budget gap, Gov. Steve Sisolak proposed extending the current rate of the Modified Business Tax, which was set to decline slightly. He also sought to extend a DMV transactional “technology fee.” Together, the bills would raise $100 million over the two-year budget cycle.

Democrats enjoy a two-thirds majority in the Assembly but are one vote shy of that threshold in the upper chamber. Rather than do the heavy lifting of trying to pick up a lone GOP senator, the majority leadership instead commissioned an opinion from the Legislative Counsel Bureau, which provides legal advice to the Legislature, as cover for their scheme. LCB attorneys obliged with the tortured reasoning that extending taxes which are set to expire or decrease does not amount to a tax increase because rates would simply remain the same.

Never mind that the point of the bills was to generate more revenue than would otherwise have been available. Armed with the sanction of the LCB, the Senate passed both measures without two-thirds support. Legislative Republicans sued.

Judge Russell laid bare the fallacy of the Democratic argument. “That was revenue that was there and would have gone away with respect to this particular matter,” he said. “But for the deletion of the tax computation mechanism, these taxes would not have produced. This amount of money wouldn’t even exist.”

He also expressed dismay that the lawsuit was necessary at all. “It bothers me,” he said, that Republican lawmakers “had to bring this action in order to bring this to the attention of the courts and to enforce” a constitutional requirement.

Indeed. Democrats say they’ll appeal to the Nevada Supreme Court. But perhaps they and Gov. Sisolak may also want to ask themselves why they arrogantly believe that they don’t have any obligation to follow constitutional mandates duly enacted by Nevada voters.

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