It’s becoming an old chestnut, this myth that Nevada governments are starving for revenue because the state has a flawed, unstable tax structure.
University system Chancellor Jim Rogers has been driving the bandwagon for a year now. Legislative liberals have been on board since summer. MGM Mirage Chairman Terry Lanni squeezed between the uppity pundits a couple of months back.
Now Las Vegas Mayor Oscar Goodman has joined the circus parade In his annual State of the City address, given Tuesday at the Las Vegas Springs Preserve, Mayor Goodman called for an overhaul of Nevada’s tax system.
Growing budget deficits at all levels of government — including Mayor Goodman’s — are a result of overreliance on sales, gaming and property taxes, the myth goes. And if only state lawmakers would create a new revenue stream here, a new tax there, the public sector would be better equipped to handle the market-based volatility that occasionally slows Nevada’s economy.
“We have to have the courage to declare what kind of society we want,” Mayor Goodman said in his speech.
He announced that he’s directing city staff to form a bipartisan panel to present ideas on how to repair the state’s tax code. Those recommendations would be part of an open dialogue that could eventually include state lawmakers, who set tax policy.
Only five years ago, a state panel with an identical mission wrapped up months of work by recommending several new taxes and several increases in existing ones. Curiously, the panel didn’t recommend any cuts in existing taxes to offset the increases proposed in the “restructuring.”
When the 2003 Legislature finally finished its business, the result of the “overhaul” of Nevada’s revenue structure was the biggest tax increase in state history.
So here we go again, with the city’s committee launching a quixotic quest to reinvent the wheel.
Because the mission is all about “overhauling” our taxes, we’d like to provide this panel with some focus. Members can complete their task by identifying the one state that has a tax structure Nevada should copy. Just name the one state whose tax structure adequately protects it from funding fluctuations amid a sputtering economy, the one state that never has to tighten its belt and trim budgets, the one state that has eternal revenue stability.
Is it California, with some of the highest personal and corporate income tax rates in the country and a punitive regulatory climate that assesses fees on every kind of business transaction? Nope. California is facing a $14 billion budget deficit over the next 18 months.
Is it New Jersey, which collects gaming taxes from Atlantic City casinos, imposes personal and corporate income taxes and the death tax, has toll roads and levies some of the highest property taxes in the nation? Nope. New Jersey is facing a budget hole of $3 billion.
What about fast-growing states with increasingly diverse, “stable” economies? Say, Texas and Arizona? Texas could be facing revenue shortfalls of between $3 billion and $12 billion in the years ahead, and Arizona is looking at $1.8 billion in budget cuts.
Lawmakers in about half the 50 states — including Nevada — are confronting budget deficits.
The truth is, and has always been, that no government budget can continue to grow when the economy isn’t. When home values tank coast to coast, consumer spending slows. If people aren’t spending, they aren’t paying some taxes.
So it’s time to call the myth of Nevada’s “unstable” tax structure what it is: code for “record tax increases.” For goodness sakes, state and local government spending has tripled — tripled! — in barely 15 years under Nevada’s supposedly unstable tax structure. If that isn’t a model of predictability for the other 49 states, what is?
Mr. Rogers, Mr. Goodman, other state Democrats and a handful of Republicans just want more of your money. If they were really in favor of a “fixed,” “restructured,” “stable” or “overhauled” tax structure, they’d be calling for cuts in gaming, sales and property taxes to offset any new taxes they hoped to impose.