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April 25, 2015

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Jon Ralston:

Teachers press forward as Chicken Little Caucus prepares to cluck

Twenty-two years after the teachers union first attempted to fundamentally change the state’s tax structure with a corporate income tax, the Nevada State Education Association is at it again with a new initiative.

It is the wrong way to enact tax policy, a desperate, perhaps quixotic attempt to make an end run around the Legislature, an unfortunate surrender to the notion that the Gang of 63 is hopeless when it comes to such policies. And, yet, I have one word for what the teachers are doing: Bravo.

After years of watching the Chicken Little Caucus scare the public about the consequences and prod the legislative jellyfishes to inaction, after listening to the mindless bleating about the damage from myopic Republicans and then, the final straw, seeing the prevaricating gaggle of Democrats in 2011 pretend they didn’t have a tax plan and then unveil one stillborn at the eleventh hour, I’m done waiting.

There is no other way to broaden the tax base and ensure Nevada’s future than through the initiative process. Make no mistake: I despise that process, a repudiation of the republic form of government, a last resort that has become an opportunist’s weapon. But I have lost my faith in the Gang of 63, especially with Gov. Sunny – Brian Sandoval — is all about reform and economic development and opposing all new taxes, except the ones he won’t let the sun go down on.

In 1990, the teachers got it done and then relented. Persuaded by Gov. Bob Miller, whose aides privately were negotiating for a business tax during his campaign, the teachers withdrew their support in favor of a stopgap measure called the Business Activity Tax. And now, here we go again.

Today, a consortium led by the indomitable teachers will file a 2 percent margin tax only on larger outfits that make more than $1 million a year and could potentially raise a billion dollars earmarked for lower education.

This has become a choice between the lesser of two evils: Faith in an inert, spineless group (yes, I know there are exceptions) versus hope for a special interest and its ability to persuade an electorate that cares about education but is susceptible to the Chicken Little Caucus’ clucking.

And they have not yet begun to cluck. The Nevada Policy Research Institute will start reminding everyone that the Texas margin tax, which is the model for the 2011 Democratic plan and the teachers initiative, is a disaster – you know, the one Gov. Rick Perry proposed. Americans for Prosperity will declare this is the end of prosperity as we know it, sure to destroy the business environment in Nevada. And the Las Vegas Chamber of Commerce, which has sold out its small business members in past tax fights, will go to the mat to protect its larger members who pay almost nothing in taxes.

On the other side will be the teachers, who surely will qualify the initiative by November, just as they did in 1990, and then wait for the Gang of 63 to either enact it (what are those pigs I see flying?) or punt it to the ballot, perhaps with one or more competing initiatives.

And whither the gaming industry? The casinos have engaged before but this time many in the industry might rather be in Macau. I still think some companies might peel off and back the teachers, although the wild card is Gondolier Numero Uno Sheldon Adelson, who has the money to perhaps crush this on his own.

But the arguments against broadening the base have always been evanescent and now they have all been debunked. If the lack of a business tax were an incentive to move here, Apple would have its headquarters in downtown Las Vegas, not a shell office in Reno. If this would force existing businesses to lay off employees or raise prices, let’s check their margins and see how much they charge in other states.

It’s time, folks, no matter what the Chicken Little Caucus says. It may not be the best vehicle, the teachers union may not be the best messenger. But it’s time.

Back in 1990, Miller had the best of intentions but, as so many governors before him, those were squashed in the legislative Cuisinart (do those even exist anymore?). And this time, the business folks can’t count on a governor to back the teachers off, so they will have to fight this in Carson City and on the ballot or … make a deal.

I hate to surrender to the notion that the Legislature is irreparably broken, that it or the governor will never confront a chronically underfunded education system, that the initiative process is the only way to move forward.

But I do. Like the teachers union, I accept the paradox: I raise the white flag and prepare to charge ahead.

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  1. An educator wanting what's best for students? A teacher fighting for survival on the mean streets of cuts? Educating a populace to produce a stronger future for Nevada? MADNESS! Madness I say!! I spoke with a math teacher recently about all the cuts and there was no hiding the disheartening effects of the past 5 years on this teachers face. This same teacher successfully left our great state for far more gainful employment in Maryland. Who can blame a highly trained math teacher from leaving Nevada? We now offer little incentive for a competitive teacher to stay with cuts, wage freezes, higher class sizes, pay more for benefits, pay more for retirement, no plans for wage increases, and top it off with "thanks for understanding". There is no love of learning if the students are hungry, and this includes teachers. If the grass is greener in Maryland, anyone would go as well. It is a small wonder somebody is requesting for an increase in the tax base by using whatever means available, all in the name of education. How dare teachers grasp for something, anything!

  2. To create a little perspective, which I'm sure will be ignored, let's take a look at the latest figures, 2011, for the "Total Percentage of Taxes Paid" based on yearly income in the state of Nevada.
    (Cited from the Institute of Taxation & Economic Policy, far more reputable than NPRI!)

    Yearly Income : Taxation Level
    Less than $21k : 8.9%
    $21k-$34k : 7%
    $34k-$53k : 6.4%
    $53k-$86k : 5.7%
    $86k-$166k : 4.5%
    $166k-$574k : 3.2%
    $574k or more : 1.6% (Top 1% of Nevadans)

    Ok, let the rhetoric laden platitudes and vitriolic article trolling begin! Get those keyboard fingers waggling like your life depends on it... which, unless you're a millionaire, it doesn't....

  3. So sadly I must agree with Jon Ralston - the Nevada Legislature is dysfunctional and the Governor is a near-monarch!

    Too few parents are politically astute and involved - and there are way too many people without children (or they've educated their grown children already or elsewhere) that simply don't give a damn - sad, Sad, SAD!

    I loathe the ballot initiatives because they are so often fielded confusingly and subject to the mob mentality of the uneducated masses! How ironic and sad we would turn to the worst, last resort effort, to fund the most important issue in Nevada - it is ALL ABOUT EDUCATION!

  4. So far, I have to agree with all the above Commenters and Jon Ralston. This is not the best way to go about addressing a century's old, antiquated tax structure, but it is doing something!!!

    In a state so blessed with a WEALTH in natural resources, as the mining industry has discovered and exploited, and Nevada being a great world destination for tourists, the People in the State of Nevada have suffered for decades with a woefully and inadequately funded infrastructure during explosive growth times. SHAME SHAME SHAME

    Time for someone, anyone, to step up to the plate, and fix this mess. It has become obvious that the PEOPLE of Nevada cannot trust nor assume their representatives, the Nevada LAWMAKERS, will bring about any meaningful and effective change for the good of them.

    Blessings and Peace,

  5. It is time to restructure PERS in this state. We don't need more "initiatives" tossed to a knee jerk electorate. Two major cities in California (San Diego and San Jose) have seen the light and voted overwhelmingly to curtail a retirement system that has BANKRUPTED their cities. It is only a microcosm of the entire state of California, which for all practical purposes,is BANKRUPT. Private sector workers have finally noticed that their so called "retirement" plans are controlled by the wolves running the stock market. Now, it's time for Public Sector employees to share in the "largess", and join the ranks of the folks who can NEVER RETIRE. Personally, I am sick of the school district coming to the people with their hat in their hand EVERY YEAR. I am not in favor of raising my taxes to support some other family's kids education. CUT PERS BENEFITS NOW!

  6. I feel there should be a Public Service Announement or a PR campaign to increase the public's awareness of the committee meetings during the Interim. I certainly hope the public is viewing the meetings on the internet at home & sending in public comment. At many of the meetings I have attended, I am the sole public commenter present. People don't realize that it only takes a small group of dedicated individuals to show up & offer comment that can & will effect change. I only know this because in April 2010 I was one of 80 citizens state wide that helped fight off the REAL ID at the DMV. It recently passed, however, they must not know that 6 seconds in a microwave fries the RF chips in the ID. (Video on YouTube).
    Nevada intends to spend tens of millions on REAL ID-what an oversight! Mine's going in the microwave!

  7. " restructure PERS "
    Funny you should mention that. I was sitting in a Chamber of Commerce meeting about a year ago and they were talking about how to massively reduce the cost of teachers. One, and only one, gentleman stood up and asked if messing with their PERS was a good idea when we pay them so little in every other aspect. The room went silent. Then the chair said "none of that matters, they are overpaid," by which he meant didn't care. It didn't matter that he was a millionaire or that teachers and the middle class would lose.

  8. Mr. Frehner,

    First off you are not using current data, those numbers where published in 2009 for the 2007 tax year.

    Lets take "your" numbers further into dollars.

    Less than $21k : $1246.00
    $21k-$34k : $1911.00
    $34k-$53k : $2745.00
    $53k-$86k : $3865.00
    $86k-$166k : $5256.00
    $166k-$574k : $8605.00
    $574k or more : $37890 (Top 1% of Nevadans)

    So the Top 1% have to pay $36,000 more per year to live in this state then the bottom group. Why? Just because they have learned to earn more money?

    If the low income people pay $1 for a loaf of bread should the top 1% have to pay $24 for that same loaf of bread?