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Sandoval calls Chamber out on tax issue

Gov. Brian Sandoval is known for his steady, calm and even-tempered disposition. Even when he’s angry, he comes across as earnest, not exasperated.

But in a statement released by his office today, Sandoval is as angry as I’ve ever seen him.

The source of Sandoval’s irritation: The Las Vegas Metro Chamber of Commerce, and its friends over at the Washington, D.C.-based Tax Foundation. The Tax Foundation today released a report denouncing Senate Bill 252, Sandoval’s expansion of the business-license fee, as the “13 million percent tax.”

The report criticized Sandoval’s tax, saying it’s complicated, not transparent and potentially violates the Constitution and federal law. It’s a far more detailed criticism than the Foundation has made up until now. (The Foundation was hired by the Chamber to study Nevada’s tax structure. It released a book of suggestions in January, the most prominent of which were to implement a sales tax on services and eliminate the small-business-protecting exemptions in the payroll tax.)

For Sandoval, today’s report went too far. This afternoon, the governor released this statement:

“The report issued today by the Las Vegas Metro Chamber of Commerce’s Tax Foundation is utterly irresponsible, intellectually dishonest and built upon erroneous assumptions. I know I am not alone in expressing my disappointment in the Chamber’s judgment especially for an organization that repeatedly claims to want to help move Nevada forward. Moreover, this act sits in direct contradiction to what the Chamber’s leaders have expressed to me on several occasions privately in my office,” said Governor Brian Sandoval. “The only good to come from this stunt is that for those of us who are working in good faith to solve Nevada’s education challenges, it removes all doubt about where the Las Vegas Chamber stands. I believe the Chamber’s leaders have done their membership a terrible disservice and have harmed the credibility of an organization that purports to stand for education,” concluded Sandoval.

For Sandoval, this is the equivalent of a full-scale, LBJ-style, profanity-ridden rant lasting about as long as March madness.

A couple of things: First, of course, the Chamber and the Tax Foundation are separate organizations, and the authors of the Foundation’s critique are not Chamber employees. But Sandoval surely knows this, and is unpersuaded by the attempts of one group to distance itself from the other; for good or ill, the Chamber and the Foundation are joined on this issue. (To be sure, the Chamber — while refusing to endorse the Tax Foundation’s suggestions — has promoted them heavily on TV, in front of editorial boards and at the Legislature.)

Second, Sandoval is clearly frustrated by the Chamber’s legislative strategy, such as it is. The Chamber’s lobbyist, Paul Moradkhan, has repeatedly testified on tax bills, uttering platitudes and cliches but always refusing to take a stand on any particular tax plan, even the one found in the Tax Foundation’s report. For Sandoval, today’s Tax Foundation broadside is the equivalent of the Chamber saying “no” to his tax idea. And it’s difficult to see why the governor doesn’t have a point on that front.

Third, by criticizing the Chamber’s leadership, Sandoval is holding the organization accountable for what many see as an utterly disingenuous approach to policy in the state. Even if the Chamber is unprepared to embrace Sandoval’s tax idea — the way the Las Vegas Global Economic Alliance has, along with a slew of other Nevada businesses — sniping at the governor’s ideas under the prosciutto-thin premise of neutrality is simply unbelievable. They’d have been better off telling the governor no from the start, and to his face.

A request for comment from the Chamber was not immediately returned.

UPDATE: Chamber spokeswoman Cara Clarke told the Associated Press the Tax Foundation acted independently when it wrote its report, and that the Chamber had no editorial control over it. She added that the Chamber will take a position on a tax plan “…in the coming weeks.”

UPDATE: The Chamber has apologized to the governor for the tone of the Tax Foundation report, and indicated the two organizations are no longer working together. The statement, from Clarke:

“The leadership of the Las Vegas Metro Chamber of Commerce apologizes to Governor Sandoval for the tone and tenor of the recent analysis issued by the Tax Foundation. While the Tax Foundation acted independently and the Metro Chamber was provided no editorial control, we recognize, as do others, that the report’s misplaced style and commentary obscures the facts and data underlying the analysis. Please be advised the Metro Chamber is no longer using the services of the Tax Foundation.

“The Metro Chamber has worked hard to foster an honest, direct and thorough conversation about the principles underlying sound tax policy. We are still in the midst of analyzing each of the proposed tax measures to determine impacts on our members and the economy before taking a position. We are focused on and stand for what’s really important: solving Nevada’s education challenges and ensuring there will be adequate funds to do so. We will continue working in good faith with the Governor and give thoughtful analysis to each of the proposed tax funding options. We are committed to moving forward with all key stakeholders to find the right solutions because there is so much at stake for the future of Nevada.”

Yes, you read that right: Despite all the acrimony of the day, the Chamber still has not taken a position on a tax plan!

Meanwhile, my colleague Jon Ralston has a blog revealing that the Chamber commissioned the report, notwithstanding a denial of that fact by a representative of the Tax Foundation. Somebody is lying there, and something tells me it’s not the Chamber. Perhaps that’s another reason why the two groups have parted ways?

UPDATE: Even harsher than Sandoval was state Senate Majority Leader Michael Roberson, R-Henderson. He said this in response to the Tax Foundation’s report:

“I support and agree with the governor’s statement. The Chamber-directed “analysis” is nothing more than a disingenuous hatchet job. It is outrageous. While I have friends who serve on the board of the Chamber, I would be surprised if they were fully aware of the dishonest actions at the staff level of the Chamber. [Chamber President and CEO] Kristin McMillan has been running that organization into the ground for awhile now. That is no secret. Frankly, I’m surprised she’s still in a position of leadership, because she hasn’t shown any.”

I’ve thought since Sandoval’s statement was released that this was the kind of thing that ends careers and results in resignations. Roberson’s remark is a de facto call on McMillan to resign.

UPDATE: I’ve obtained an email sent by McMillan to the Chamber’s board of trustees and government affairs committee members on Thursday night. It essentially reveals the Chamber sent out the Tax Foundation’s report, and only later determined it’s “style and tone” was too nasty. Here’s the text:

Good evening, Trustees and Government Affairs Committee members:

Earlier today, we sent you a copy of the Tax Foundation’s analysis of the Governor’s tax proposal. We received the report at the same time it was issued publicly. Upon review, the report was determined to be unsuitable in its style and tone. In discussions among our government affairs team and board leadership, it was decided that we would end our relationship with the Tax Foundation and issue a statement apologizing to the Governor for the tone and tenor of the Tax Foundation’s report. Below is the statement we issued earlier this evening to the press.

Please let me know if you have any questions.

Actually, there are some questions. First, since we know the Chamber commissioned the report, why did it get a copy only as it was being publicly released? Second, why send it out before anyone had even bothered to look at it? Third, doesn’t sending it to your trustees and government affairs committee imply a certain level of endorsement? Fourth, since the Tax Foundation is clearly not just analyzing the tax policy outlined in the governor’s tax plan, but advocating powerfully and strongly against it, wasn’t the decision to hire that group in the first place a bit questionable? And fifth, doesn’t this give the Chamber a huge black eye, one that’s made worse in that it could so easily have been avoided with a bit of communication and management?

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