Do-Right, Will Rogers & the silence of the cows
Expanded from the 1-19-2003 Daily Sparks
Monday night, Gov. Dudley Do-Right will utter his third state of the state address. After four years of waiting, studying and procrastinating, will he finally spell out the new taxes he wants or will he pull a Will Rogers?
During World War I, the great Oklahoma cowboy humorist announced to the media that he had solved the problem of German submarines which were sinking ships wholesale.
"Just boil the ocean," Rogers said with a straight face. "Make it so hot for them down there, they'll have to surface where our side can pick 'em off."
This naturally begged the question of just how he proposed to heat the Atlantic.
"That's a detail matter," Rogers wryly stated, "I'm a policy maker."
Down in the backrooms of Carson City, the betting line is 50/50 that Gov. Kenny Guinn will take the policy maker's way out. He's already endorsed increases in booze and cigarette taxes because the state is drowning in an ocean of red ink. Those won't come close to filling a budget gap which seems to change daily. A couple of years ago, Guinn forecast a $1 billion deficit by 2010. Now, it's $700 million in the next two years alone.
Most of it can't be blamed on Osama bin Laden. Expert warnings about the failings of our tax system have been around for more than 40 years. Smart corporations long ago insulated themselves against future hikes.
Chafing under the onslaught of the late Assemblyman Marvin Sedway, D-Las Vegas, the mining industry wangled a costly special election for itself in 1989. The teachers union and other suckers in organized labor supported the new mining tax as a way to help education. (Have you ever noticed how just about every politician supports education but somehow ends up handing a drowning man a drink of water?)
A JIM DAY CARTOON
& SACRED COWS
Teachers walked precincts and the industry bought ads talking about how it would save the small mom and pop miner.
Bull. Or, more rightly, a golden calf. It was really a glorified insurance policy to keep Nevada's foreign-owned (largely British and Arab) gold mines pretty much tax free. A net proceeds tax is the equivalent of Hollywood accounting where if there's ever a net profit to pay taxes on, you need to fire your accountants and hire Arthur Andersen.
Because the tax was imposed at the polls, it can only be changed at the polls. Mining is thus exempt from this year's tax hike fever. But that doesn't stop its front group from running ads about how benevolent these foreign pirates are.
State of Nevada study blames chronic fiscal problems on wholesale creation of low-wage casino jobs.
More corporate welfare horror stories: NevadaLabor.com White Paper on Nevada's unfair and regressive tax structure. 1-20-2003 Web Extra
Gambling industry offers only token taxes and cosmetic participation
1-20-2003 Web Extra
State of the State: Next to Nothing
Las Vegas CityLife 1-30-2003
Humongous property tax hike glossed over by Gov. Dudley Do-Right
Sparks Tribune 1-26-2003
The need for zero-based taxing
Sparks Tribune 12-13-98
Logrolling, air raids and dirty deeds done dirt cheap
Sparks Tribune 2-2-2003
Legislative Opening Day Web Special: Dudley Do-Right, Joe Neal, living room elephants & chopped liver
2-3-2003 Web Extra
Corporate Nevada has been masterful at controlling the parameters of the tax debate. The public has been presented with two choices from two major business categories, the gambling industry and non-gambling businesses.
Curiously, neither side wants to raise Nevada's gross gaming tax, the lowest in the world. (Go to "token taxes" at right.) No less than the ultra-conservative Nevada Policy Research Institute recently accused the gaming industry of welshing on the original deal which allowed the vice to be legalized in 1931.
Silver State casinos pay about $600 million a year in grossgaming taxes. That may seem like a lot of money, but not if looked at in terms of a $9 billion industry. They use their enormous profits to compete against themselves by investing in California Native-American casinos.
Worse yet, the gambling industry gets back about a third of its gross gaming tax in the form of corporate welfare rebates and subsidies. The Bellagio in Las Vegas benefits from the infamous Steve Wynn art tax subsidy. Wynn's latest announced behemoth will also take advantage of thatinfamous piece of rape and pillage, but it's small potatoes compared to other forms of gamblers' swill.
Convention and visitors authorities and downtown redevelopment agencies drain taxes sorely needed to support growing communities and divert them to casino promotion. Over the past 25 years, the Reno and Sparks downtown redevelopment districts have shunted the better part of $200 million away from the community for a negligible return, unless you count Syufy's tax-subsidized monopoly on movie theaters.
Las Vegas declared its downtown a city park in order to shunt more funds to the aging casino center. In fiscal year 2002, Clark and Washoe County room taxes brought in over $263 million. Gomorrah South blew 53 percent of theirs on its convention authority, an entity which uses tax dollars to do what the casinos should be doing for themselves.
Reno and Sparks were worse, much worse, blowing 90 percent on corporate welfare and spending only 10 percent on local programs like parks and recreation (the original intent of the 1955 law establishing the room tax).
The 2003 legislative session is a stacked deck. Lawmakers will have neither the time, the research nor the courage to implement zero-based taxing, something I've advocated for years. True tax reform means that every source of revenue goes on the table and all previously earmarked funds become fair game, including airport authority and regional transportation money.
The tobacco-fueled Millennium Scholarship Program furthers a laudable goal, but for each $10,000 scholarship Gov. Dudley Do-Right hands out, the university system must match it with another $30,000, an unfunded mandate but great re-election PR.
No cows should remain sacred while the fat cats laugh all the way to the bank.
Nevada's silence of the cows must end.
Be well. Raise hell.
Copyright © 2003 Andrew Barbano
Andrew Barbano is a 34-year Nevadan, a member Communications Workers of America Local 9413 and editor of NevadaLabor.com and JoeNeal.org. He hosts Deciding Factors on several Nevada television stations. Barbwire by Barbano has originated in the Daily Sparks (Nev.)Tribune since 1988.
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