No time to waste as tax debate heats up

CARSON CITY

So, just one day before a big bill deadline in the Nevada Legislature, as lawmakers and Gov. Brian Sandoval were crafting a compromise tax proposal behind closed doors, the Assembly Taxation Committee was listening to an idea that has absolutely no chance of gaining support, advocated by a guy who’s got no official role in the budget process.

That seems like a good use of time.

True enough, the two biggest tax plans proposed thus far in Carson City were stalled. Sandoval’s preferred alternative, transforming the state business license fee into a progressive levy based on a business’ gross receipts, passed the Senate but is awaiting a vote in the Taxation Committee. And an alternative plan advanced by Assemblymen Paul Anderson, R-Las Vegas, and Derek Armstrong, R-Henderson, is sitting in the Assembly’s Ways &Means Committee.

But that doesn’t mean we should get desperate.

Still, Taxation Committee Chairman Armstrong dedicated a couple of hours on Thursday to discussing an idea put forward by Controller Ron Knecht, an alternative budget that doesn’t raise taxes but does force local government employees to pay more for their retirement, the equivalent of an 8 percent to 10 percent pay cut.

Unlike the Sandoval or Anderson-Armstrong plans, Knecht’s Balanced Plan for Growth was not a bill, even though he introduced it with Assemblyman Jim Wheeler, R-Minden. It was merely an idea, Knecht’s idea of what Nevada government should look like if he was king of the world.

But he’s not. Instead, he’s in charge of the state’s accounting system, writing the checks and running the audits to make sure the state’s cash flow is running properly. There’s nothing in Knecht’s job description that requires him to weigh in on the budget, or even allows him to do so.

So why did the Taxation Committee hold the legislative equivalent of a Renaissance Fair?

The usual answer to that question is that everyone should be heard on important questions of state finance, especially alternative or minority views unpopular with the majority. And the raise-no-taxes caucus is most certainly the minority view in the legislative building.

The only problem? It doesn’t work. Members of the committee, Republican and Democrat, spent the afternoon poking holes in the Balanced Plan for Growth. And Knecht, apparently taking time off from his official duties, gladly debated each point, occasionally turning to his deputy, former Nevada Policy Research Institute staffer Geoffrey Lawrence. At least it was a fun day!

The only trouble is, the Nevada Legislature isn’t the Rotary Club or a debating society or a college-adjacent bar known for philosophical back-and-forth and cheap wings on weeknights. And since the Balanced Plan for Growth isn’t even a legitimate proposal before the Legislature, since it has no support in a building where most members have already indicated (by votes or by voice) their willingness to fund Sandoval’s budget with an increase in taxes, and since Knecht’s plan attracted support only from fringe characters (welcome back to Carson City, Sharron Angle!), can we get back to reality?

Late Thursday, Sandoval released a statement about the new bipartisan compromise plan, which relies on a combination of the governor’s revenue-tax idea and the Anderson-Armstrong increases in certain fees to fund the recommended $7.4 billion state general fund. The payroll tax and the business license fee would increase under the compromise plan, and a new “commerce tax” would be created on business revenue greater than $3.5 million per year, with half of whatever tax is paid eligible to be a credit against the payroll tax.

The governor’s statement included quotes from all four leaders in the Legislature — Senate Majority Leader Michael Roberson, R-Henderson, and Minority Leader Aaron Ford, D-Las Vegas, as well as Assembly Majority Leader Anderson and Minority Leader Marilyn Kirkpatrick, D-North Las Vegas. None committed to vote for the final product, but the tone was one of progress.

So instead of continuing the status quo and doing without — the animating philosophy of the Knecht approach — the state might have a real shot at a compromise plan that will help Nevada achieve what it needs in terms of education and other state services.

Nobody should have to struggle to make that choice.

Steve Sebelius is a Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or SSebelius@reviewjournal.com.