Some modest proposals to help fix the budget

By Jon Ralston

Sunday, Jan. 16, 2011 | 2 a.m.

At least Gov. Brian Sandoval has a plan.

He will formally unveil his budget Jan. 24. But as I told you last week, the contours already are established: No new taxes, push services to the locals, sweep school district capital reserves, pay cuts for state workers, consolidate agencies.

Democratic leaders – Senate Majority Leader Steven Horsford and Assembly Speaker John Oceguera – have been making the case that, as Horsford put it, a cuts-only plan would “dismantle our state.” Oceguera has been appearing before local governments showing how the administration’s $1 billion deficit estimate is low, using Horsford’s $2.7 billion figure and outlining the consequences of the same old kick-the-can-down-the-road approach.

But just as Sandoval has been Gov. Sunny, refusing (so far at least) to really inform the public of the problem’s short- and long-term magnitude, neither Horsford nor Oceguera have been honest about what it will take to bridge the gigantic deficit they are selling: Tax increases.

There must be another way. Actually, there are plenty. And I figure if I throw rocks at Sandoval for his plan and lambaste the Democrats for their muzzles, I should throw out solutions:

• The overall goal: How do you hold education harmless and create a petri dish for economic development and job creation? This is the seminal question facing Nevada. Sandoval knows it. Thoughtful lawmakers (over-under at 10) know it. Many, many business leaders know it. But even if Sandoval is a better salesman than Oscar Goodman, the product he is hawking – Nevada – is harder to get buyers for than downtown Las Vegas ever was. But slashing higher and lower ed only tarnishes the product more and turns potential investors away – as it has for decades. Otherwise, Silicon Valley would be in Summerlin and not the Bay Area.

• Business: How about some shared sacrifice? Sandoval has, as one wag put it, not backed off his no-tax pledge but “doubled down on it.” The governor is fond of asking rhetorically: “Who would pay new taxes?” But he also talks about “shared sacrifice” in fixing the state’s budget problem. Here’s a suggestion: Pass a “Save Our State” tax on every business in the state – there are at least 200,000 – that would be a dollar-a-day levy for the biennium ($730). Do the math: That’s $146 million. ($2 a day and you double that and so on.) It’s a start.

• Mining: It doesn’t work for Nevada: This is not the elephant in the room; this is the mastodon in the Legislative Building. And it’s time the non-taxation policy went the way of the massive mammal. Consider: Barrick bragged that its third-quarter results showed a “record $837 million.” And this: “Barrick’s cash margins continue to benefit from rising gold prices ($1,359 an ounce and counting!) and lower cash costs.” I could go on, but you get the point. The miners can afford to pay more – a lot more – and they are captives. The gold is in them thar hills is in Nevada, so they have no leverage, except for all the lawmakers they can purchase. Retired state Sen. Randolph Townsend said last week on “Face to Face” that mining “is one of the problems” and that “without question” they should be taxed more. It’s difficult to do because of constitutional protections, but can be done. Check that: Should be done.

• NPRI: A tax you can sell? Nevada’s most conservative group says the sales tax base should be expanded. Reduce the overall sales tax rate and apply the tax to businesses who are paying nothing now. It could raise a lot of money.

• Two bad taxes: Can you cut them? The best way to get broad support for any taxes-and-cuts plan is to reduce or erase levies, too. Two of the most reviled – and most illogical – are the Government Services Tax (that’s what you pay to register your car) and the Modified Business Tax (the payroll tax). Cut them, abolish them (in a phased-out way, perhaps). Message: The Gang of 63 cares.

• The NRS 288 conundrum: Can’t we get a collective solution? Despite what the locals say, they could absorb some state services and their salaries are very high. So start the conversation in a serious way about adjusting the collective bargaining statute, without demonizing the unions or the employees.

That’s just a beginning. Gaming, even though it’s hurting, would have to be part of the solution, especially because its Macaulust has not gone unnoticed. So, too, should the Spending and Government Efficiency Commission recommendations not be discarded.

No new taxes and no talking at all are not solutions. But I have hope. Sandoval is a reasonable man. They are all (or some of them) reasonable men.

Until Jan. 24.