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May 4, 2015

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J. Patrick Coolican:

Horsford taking tax fight to local level

J. Patrick Coolican

J. Patrick Coolican

Steven Horsford

Steven Horsford

I walked into Senate Majority Leader Steven Horsford’s office in Carson City feeling pessimistic. A business lobbyist had just told me that most newly elected Republicans are ideologues committed to allowing taxes passed in 2009 to lapse and then to cutting schools, universities and social services — sometimes drastically so — to balance the budget.

Democrats have offered no plan of their own. More than 40 days into the 120-day session, they seemed to be replaying their 2009 strategy, decrying budget cuts while pretending they don’t need to raise taxes until the final month of the session. That’s when a few elder statesmen and women will emerge from a conference room and announce the latest triage dirty Band-Aid of cuts and tax increases to get the state through the next two years.

Except, this year, unlike 2009, many of those elder statesmen and women are gone, and there aren’t Republican votes for a budget deal.

The downbeat assessment from the lobbyist on whether Nevada will recover: Tourism, sure. But we’re dismantling key quality-of-life services. “Would you send your kid to college in this state after this?” he said.

Another veteran business lobbyist said he’d never seen anything quite like it, a toxic mix of Republican ideological intransigence and rampant Democratic political careerism.

Most Republicans have taken “the pledge,” a promise not to vote for a tax increase under any circumstances, enforced with priestly judgment by conservative activist Chuck Muth. Meanwhile, Democrats — including, presumably, Horsford and his Assembly counterpart John Oceguera — are eyeing one and potentially two open congressional seats, which can only serve to get in the way of the people’s business.

Bad vibes all around.

But after 30 minutes with Horsford, during which he did nearly all the talking, I came away thinking that at the moment, he’s probably being underestimated.

“I’m not playing,” he said sharply.

His first task, he said, was to gather information on the governor’s budget and determine how it would affect senators’ districts.

Now, in a series of one-on-one meetings, he’s showing them the effect, especially on rural community college campuses, rural mental health clinics and nursing care facilities.

Horsford has been criticized for not trying to schmooze Republican members; remember, he needs his own caucus, which isn’t yet solid, as well as three Republicans to override an expected Republican veto by Gov. Brian Sandoval.

His response: Friendly poker games and cocktails aren’t going to sway anyone, especially given how ideological the Republican caucus is and how loyal they are to Sandoval.

His guide, he said, isn’t famous U.S. Senate schmoozer Lyndon Johnson, but Tip O’Neill, whose famous line is “All politics is local.” He’s hoping senators will care more about what is happening in their districts and the social, economic, educational — and, yes, political — repercussions of the cuts than what Muth thinks.

This makes some sense, but I also detect a certain frustration with the entire process, and we’re only 40 days in. Relationships matter, and I’m not sure why he can’t be both LBJ and Tip.

In general, both he and Oceguera, whom I spoke to earlier in the week, seem intent on signaling a different narrative than “Democrats need Republican votes.” Now, it’s also, “Democrats are in the majority. You don’t have the votes either.”

Horsford said that on a parallel track, he’s been trying to show the problems in the governor’s revenue assumptions, with help from his liberal lieutenant, Sen. Sheila Leslie, D-Reno.

Together they’ve noted the tax department’s failure to audit gold mining companies’ generous tax deductions and raised questions about Sandoval’s attempt to borrow against future insurance taxes and take money from school bond funds.

Thursday, Leslie began hearings on the failure of our tax system, which studies have shown to be unstable and too reliant on tourism and development. Our high sales tax is regressive — meaning harder on working and middle class Nevadans than the rich — while the payroll tax is a tax on jobs.

Horsford’s concern isn’t just staving off the worst cuts in education. He also wants to reform the tax code. Merely continuing tax increases passed in 2009 isn’t good enough even if it raises enough revenue.

Among his list of tax reform ideas intended to make the tax system broader and more stable and fair:

• Expand the sales tax to services, which make up a significant portion of economic activity but go untaxed. The rate could be dropped to make the effect less regressive.

• Adopt the Texas franchise tax, which is a modified gross receipts tax on business and that allows for some deductions; or the Ohio commercial activity tax, which is a more pure gross receipts tax on business. Veterans of the 2003 tax fight, which went well into the summer and provided no permanent fix, are no doubt groaning. (Nevada is one of a few states in the country without some kind of corporate income or gross receipts tax.)

• Grab more money from local government while giving those entities more autonomy over their own taxes and spending.

Horsford insists the debate will happen this session, and this key question finally settled.

“I’m not looking to put a Band-Aid on it. Business and the private sector cannot have a tax discussion every two years. It creates too much uncertainty.”

He’s about to get pilloried from all sides because in addition to increasing taxes, he’ll be cutting spending and offering to compromise with Republicans on reforms that will outrage public employees.

Horsford said one of his goals has been to carry the debate “outside the building.”

“The building” is the ominous term many use for the Legislature and evokes a hive of swarming lobbyists pushing special-interest agendas.

So that’s why Horsford welcomed more than 1,000 mostly college students to the capital this week, hoping voters will pressure legislators to preserve education and other services.

I’m skeptical he can pull it off, if a bit more optimistic than when I walked into his office.

Coolican’s column appears on Tuesdays and Fridays.

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  1. The Republicans will allow the tax increases to lapse, just like they allowed Obama's PAYROLL TAX CUT TO LAPSE. I will end up saving around $1,400.00 on last years taxes. That bill was passed last March. The Republicans in congress tried to kill it, but when Scott Brown voted with the Democrats, (to cut taxes for business people) he was called a traitor. Where were Brian Sandoval and Chuck Muth back then? Did Chuck Muth consider Scott Brown a traitor for voting to cut taxes for small business people like me, and for big corporations like the MGM? Then last December when Obama wanted to extend the payroll tax cut, the two-faced Republicans killed it. That will cost me a lot of money.

    Brian Sandoval has no credibility when it comes to doing what's best for Nevada. Sandoval wants to be like Tim Pawlenty. Pawlenty wants to be president, but he did such a lousy job as governor of Minnesota, that they elected a LIBERAL DEMOCRAT to replace him. He said no to taxes, but left Minnesota with a 5 billion dollar budget deficit. Sandoval is even worse.

    There is a new definition for the word gullible. The word gullible is now defined, as a person who believes anything that Brian Sandoval says.

  2. This legislative session is analogous to a college term paper. This is typically assigned at the beginning of the semester and no on takes it seriously until the week before it is due (including the all-nigher before turning it in).
    In the mean time no reason to worry and plenty of time to schmooze with the lobbyists and special interests.

    BTW--this is exactly what the Dems said they would do in January. Sit back and let the Republicans take the heat.

    For those who say the governor has no credibility. I would note that he ran on the no tax increases platform and was elected in good part on this promise by a majority of voters. He is keeping this promise. To run on a no tax platform and then turn around and raise taxes would destroy his credibility.

  3. To Turrialba: once more, you defend Governor Sandoval's burn-it-all for "no new taxes" budget on the basis of character, NOT considering the permanent damage it will do to Nevada's infrastructure in education, state services, and the overall negative impact it is guaranteed to have on our state's general econony.

    What this budget will destory will never be rebuilt again in our lifetimes.

    Once more, I ask you to read Nobel laureate Paul Krugman's column in today's NYTimes, detailing the economic disaster that has happened in European countries that have followed both your and that wrong-headed ideologue Chuck Muth's formula: (3/25/11) "Portugal's government has just fallen in a dispute over austerity proposals. Irish bond yields have topped 10 percent for the first time. And the British government has just marked its economic forecast down and its deficit forecast up. What do these events have in common? They're all evidence that slashing spending in the face of high unemployment is a mistake."

  4. "A business lobbyist had just told me that most newly elected Republicans are ideologues committed to allowing taxes passed in 2009 to lapse and then to cutting schools, universities and social services -- sometimes drastically so -- to balance the budget."

    Yeah, that's why they were elected. Somebody has to try and control waste, fraud and overspending.

    Also, why are republicans called "ideologues".....what are tax and spend liberals?

  5. Professor--I did answer your question regarding Professor Krugman's column at 9.46 AM in the article you asked it initially (I think). I should say I tried to answer it to the best of my ability as it was not an area that I have much learning.

    I realize you asked the question at 7.44 AM, but I did not see it until about the time I answered it. I can't be everywhere. I had some things to do this morning, including writing a comment on Libya. I am a slow writer and seem to be more long-winded than usual (that takes some doing). I think the term "once more" as you apply does not reflect the good faith effort I have made to address this question.

    Now, as for the Governor, I would note that 53% of Nevadans voted for him on November 2. He was quite clear about his intentions at that time regarding tax increases. He proposed a budget in January as he is required to do. The budget reflects that he he has followed through on this seems that he is doing exactly what he was elected to do by a majority of voters.

    During September of 2010, the Chancellor and Regents put forward a budget that would have provided an overall increase for higher education of approximately 3 percent. The dollars included in the Regent's budget also included monies to replace the money provided to higher education through the one time stimulus funding provided by the Feds. in 2009. The Regents were certainly free to proposed such a budget, even though it was mere fiction. I think they said that in the absence of the December projections from the Economic Forum, that a serious budget could not be put developed, even though every other department in the State complied with the Governor's request to agencies to develop budgets that reflected cuts of 10 percent. The Chancellor stated that it was as low as they could go or something. Hardly responsible in my view.

    Additionally, another group of people were elected to our legislature. The last time I checked, this august body had the authority to tax and appropriate funds under a system of checks and balances. If these folks want to raise taxes or appropriate funds in a manner different than the governor proposed in his budget they can do so. That is the reality of the situation. It is on the legislature too.

    Thus far the legislature, the Chancellor and the Regents have been missing in action. I think you ought to put the blame on this crowd. It reflects the true workings of the system. Putting it solely on the governor is simply wrong and one-sided. Look to those who tax and appropriate.

  6. Professor Unger states

    ...once more, you defend Governor Sandoval's burn-it-all for "no new taxes" budget on the basis of character, NOT considering the permanent damage it will do to Nevada's infrastructure in education, state services, and the overall negative impact it is guaranteed to have on our state's general econony (sic).

    What this budget will destory (sic) will never be rebuilt again in our lifetimes.

    Please explain yourself Professor.

    What exactly will be destroyed (what does this term mean in this context)? and

    What negative impacts are guaranteed?

  7. Oh Professor Unger: Have you no response to my answer to your question?

  8. "...most newly elected Republicans are ideologues committed to allowing taxes passed in 2009 to lapse and then to cutting schools, universities and social services -- sometimes drastically so -- to balance the budget."

    What part of there's nothing more to give do the more taxes crowd not understand? Until We force government to understand what the rest of us already know -- you get in big trouble for writing checks on empty accounts -- nothing will change.

    "For decades, we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present. To continue this long trend is to guarantee tremendous social, cultural, political, and economic upheavals. You and I, as individuals, can, by borrowing, live beyond our means, but for only a limited period of time. Why, then, should we think that collectively, as a nation, we are not bound by that same limitation?" --the late President Ronald Reagan, Inaugural address, Jan. 20, 1981

  9. Your questions have been answered in other posts. Just look at the 12 departments and 33 degree programs, so far, that are scheduled for elimination at UNLV under the current budget; and the many departments and programs likewise at UNR; and the tragic reductions in admissions capacity that will affect our Community Colleges. This is what will be destroyed. And what people don't realize is that it takes 20 years to build a department, and at least 5 years to get a program approved, up and admitting students. In other words: the destruction will not only be temporary, but carefully built education infrastructure will be imploded and left in ruins.

    "The Sun" has published an excellent article on the potential negative economic effects of cuts to K-12 education; and my estimate of the lost economic benefit just in the short-term of Governor Sandoval's proposed cuts to higher education top $200 million, most of those negative impacts in Clark County.

    Still, none of this narrow focus on short-term dollars-and-cents in one budget cycle takes into account the tragic, long-term damage: limited choices and lost opportunities for Nevada students.

    You have made your position very clear: you are a "no new taxes" Republican who argues "costs" consistently against the proven long-term values of both K-12 and higher education.

    For proof of the long-term value of colleges and universities, please see: Baum and Payea, "The Benefits of Higher Education for Individuals and Society", available in .pdf from The College Board, Princeton, N.J. (

    And for K-12, let's all remind ourselves that on December 10, 1948, the United States Government signed the Universal Declaration of Human Rights, which states in Article 26: "Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit."

    Education is a human right. We must defend this right.

  10. What is wrong with considering the closing of a few departments and degree offerings?

    Professor, you seem to view consolidation and as weakening education. That may not be so. I don't think evaluating the future of a handul of the number of degrees and programs is necessary a bad thing, nor do I believe it will get us in trouble with the UN for violating human rights.

    If education is a human right, then must I subscribe to only your vision of what it is, what it should be or would that be violating a human right? I think not.

    Really Professor, there is are folks that want to get behind UNLV, but UNLV has to move ahead with the times. We live in a society that must manage its resources carefully for the betterment of this society. Higher education is pricing itself out of the market here and elsewhere.

  11. Your misleading rhetoric once again attempts to deceive all who read your posts. It is not "the closing of a few departments and degree offerings" when 47% of state funding is cut in less than four years: this amounts to the dismantling of a fine, continuously improving system of higher education that has been extremely cost-effective compared to universities and colleges in the region. More, that system has been, and potentially still could be, an economic engine that helps to revive the Nevada economy, should its basic infrastructure be saved during this budget cycle.

    Your arguments deliberately misrepresent scale and cost. The truth: you really don't care, not one whit, though you pretend to in your posts that you do; all the better to argue for your myopic "no new taxes" ideology that threatens to dismantle almost every vital public service in our state.

    You have every right to voice and advocate this stance, but please, don't pretend that your reasoning is anything other than a one-note sophistry in service of a radical, right-wing governor who wishes only to give tax breaks to his cronies in big business, freeloading mining companies and welfare cowboys, all at the expense of vital services good, hard-working people in Nevada need, and the price includes taking away choices and opportunities in education for Nevada young people.

    As for the rights of children: the cuts to K-12 proposed by Governor Sandoval, if allowed to stand by the legislature, will very likely lead to law suits that the state is not living up to its constitutional responsibilities. But again, why waste our breath here? We know where you stand, and what you stand for, and what you so gleefully wish only to destroy.

    In other words: all bunk, and very cheap bunk, too.

  12. "General Electric evaded paying U.S. taxes last year on profits of $14.2 billion, which included $5.1 billion from U.S. operations."

    "GE's extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore."

    The same has happened with Mining and Casino industries in Nevada and elsewhere - innovative accounting, deductions and tax shelters, many overseas. The mining industry in Nevada paid less than 1% of their gross receipts in 2009 while going unaudited.

    Brian Sandoval recently stated in an interview that 'Paying zero taxes is a fair share' for mining interests.

    Gambling in Las Vegas is loosing it's prestige. Those who can spend $500-$700 to fly in for three days are dwindling and so are the gross receipts, requiring even more creative accounting.

    Nevada Government isn't spending too much. Rather, the corporations spend their money lobbying for deductions. Deductions mean profits, not increased productivity. They don't even pay rent on mining land anymore.

    The objective of Republicans is to destroy protections for the public and turn the Country into and economic free-for-all like it was before the Great Depression because greed has more power then common sense.