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July 5, 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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