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Closing the Tax Hike Loophole

Hoping to limit the damage state legislators seem to do every time they meet, Nevada’s voters passed a constitutional amendment a few years ago limiting legislative sessions to 120 days every two years. Alas, it took legislators in the Assembly less than thirty days this year to approve the third largest tax hike in the state’s history.

Perhaps it’s time to limit sessions to two days every 120 years.

The real issue here, though, is a loophole in the state’s tax restraint law that voters passed back in the 1990s which requires a 2/3-super majority vote of the Legislature to pass any tax hikes. Unfortunately, the law doesn’t apply to ballot initiatives. So the teachers union – always on the prowl for ways to line their members’ pockets with higher pay no matter how rotten a job they might be doing – threatened to gather enough signatures to put an initiative on the ballot last year which would have raised taxes on the gaming industry.

The revenue from the tax hike would have been earmarked for higher teacher salaries with no accountability. Go figure.

The thought of their own ox being gored so spooked three Strip gaming companies that instead of fighting the tax hike, they caved in to the extortion threat and teamed up with the union on a scheme to “tax the guy behind the tree.” Thus was born a room tax hike on the state’s tourists who had no say in the matter whatsoever.

To get legislators to pass the proposed tourist rip-off, the union persuaded three counties to put a non-binding, non-specific advisory question – in reality, a taxpayer-funded public opinion poll – on the room tax hike on the ballot last November. And it passed in two of the three counties. However, it only barely got a 2/3 super-majority vote in one of those two counties.

No matter how many times Gov. Jim Gibbons and other fork-tongued politicians say this specific tax hike currently before the Legislature was approved by the people, it wasn’t. No way. No how. Period. And I’ll debate him/them on this issue in a public forum anywhere, any time. Governor?

Anyway, allowing for only a simple majority to pass ballot initiative tax hikes is a loophole that moneyed special interests such as Big Gaming and Big Labor can drive one of Paul Enos’ (the trucking industry’s lobbyist) semi’s through. And it’s a loophole that Assemblyman Ed Goedhart (R-Amargosa Valley) wants to close.

Goedhart has introduced a resolution (AJR 2) which would send to the voters next year an amendment to the Constitution to require the same 2/3 super-majority vote to raise taxes through a ballot initiative that is currently required to raise taxes through the Legislature. The bill’s language is the same language as a ballot initiative that more than 100,000 Nevada voters signed last year before being tossed by the courts over a technicality.

And who led the legal fight to kill this citizen initiative to make it harder to raise taxes via the initiative process? Why, the teachers union. Go figure.

Alas, Dracula probably has a better chance of seeing the light of day than the “Goedhart Tax Restraint Initiative” during this legislative session. But while the Democrat majority in the
Assembly can bury the Goedhart bill, they shouldn’t. Not if “the will of the people” means anything to them – which they claimed it did in urging support for the teachers union’s tax hike.

Clearly the people of Nevada wanted an opportunity to vote on the proposal to close the tax hike loophole, as evidenced by the 100,000-plus signatures on the initiative petition last summer. Unless the Democrats are major league hypocrites, they’ll pass the Goedhart resolution and send the measure to the 2010 ballot so the “the will of the people” can be known.

Oh, um. Never mind.