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October 30, 2014

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Legislature 2013:

When student brainstorming hits the wall of reality at the Legislature

Few times in the history of Nevada have its people ever lauded its Legislature for rapid, courageous progress.

More often, people complain about inaction in the face of persistently poor high school graduation, unemployment, suicide and crime rates. They ask: Why in the world don’t politicians just fix the state’s problems?

It turns out that it’s harder than it looks.

Mark Bird, a College of Southern Nevada sociology professor, recently taught a class in which he and his students sought to do more than complain. They brainstormed 35 solutions to “enhance the state.”

“There are so many solutions out there,” Bird said. “Some of these seem to be so commonsensical to get revenue, but the state hasn’t pursued them. Some of these, they haven’t consciously sat down and thought about it.”

But those 35 ways to pay for everything you think the state should be funding don’t necessarily pass muster when examined. Instead, the list illustrates just how difficult it is to pass tax reform measures in this state.

“If it’s cheap or politically easy, it’s already been done,” said David Goldwater, a lobbyist and former member of the Assembly.

Classrooms may encourage critical thinking, but legislatures juggle policy, politics and personalities while keeping one eye on the next election cycle.

“In the real world, we must deal with nuance, and unfortunately, many of these suggestions are black and white,” said Paul Enos, CEO and lobbyist for Nevada Trucking Association.

Many of the proposals are plainly disallowed under the state constitution. Some would encounter a fierce lobbying effort. Others would have detrimental unintended consequences. Still others ask the state government to do things that Congress or local governments must do.

In an ironic twist, many of the students’ ideas would levy fees or increase taxes on the poor and middle class, an economic class likely encompassing most students.

Studies totalling hundreds of pages have quantified Nevada’s woes over the years, and fixes may be easy to brainstorm in the classroom or over dinner table conversation, but they’re hard to implement.

Here’s a look at what the students proposed:

Ideas the Legislature is considering this year:

In some cases, the students are spot on. The people in the People’s House have put forward a number of the ideas the students thought of. But most of the bills already are dead.

Legalize, regulate and tax marijuana. The bill couldn’t muster enough votes to get out of committee, leaving its chief lobbyist, Steven Frye, contemplating making it a “zombie bill.”

Add a $1-per-gallon tax for gasoline. Legislators don’t want a double-digit increase, but there’s a bill adding a 2-cent tax increase every year for 10 years. It’s still alive.

Tax concerts and other large casino special events. Nevada already has a “live entertainment tax,” but Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, wants to expand the tax. This idea has legs.

Create a corporate income tax. Assemblywoman Peggy Pierce, D-Las Vegas, sponsored a bill to create one. It died.

Greater taxes on guns, alcohol, cigarettes and adult entertainment. Sen. Mark Manendo, D-Las Vegas, tried to get his colleagues to consider an areola-viewing surcharge. Assembly Majority Leader William Horne, D-Las Vegas, tried to increase taxes on guns and ammunition. Both bills died.

Significantly increase taxes on mining companies. Legislators who would like to do that are trying by first removing the mining industry’s tax provisions in the state constitution.

Create new taxes on all oil and gas fracking development. This hasn’t been proposed yet, although Sen. Tick Segerblom, D-Las Vegas, has a bill that would encourage regulation of hydraulic fracturing, or “fracking.”

Wrong level of government:

Many of the ideas proposed by students that might get support aren’t actually the state’s responsibility. It can’t do some of the things that federal and local governments can.

Create a tax on items bought on the Internet. State legislators want to do this, but it’s now a job for Congress. The state has already done its part by reaching some agreements that would allow it to collect Internet sales taxes when Congress takes action.

Have a slight tuition increase for out-of-state students. The state’s elected Board of Regents does this.

Greater fines on traffic violations. Many traffic violations are local government issues.

Greater fines for city, county and state fees. City and county governments set their own fees. The Legislature does occasionally review and revise state-level fees.

Obtain more federal land, then sell the land. The vast majority of land in Nevada is federal, and the federal government says most of its land sales are in Nevada. Most of the sales don’t happen through the state Legislature, though.

Reduce sports funding for all K-16 schools by 20 percent. The state’s primary and higher education systems have sustained cuts; any specific cut to sports would be a local decision.

Done, done and done:

As lobbyist and former legislator David Goldwater said, if it’s cheap or easy, it’s already been done:

Better promote tourism. Nevada just spent a lot of money on a new slogan: “A world within. A state apart.” It’s an effort to promote tourism.

Have inmates work for food, housing and medical expenses. The state does this already.

Apply for more federal grants. The state is working on this, too, passing a bill in 2011 to establish a “grants procurement” office.

Switch all state employees to a 36-hour workweek. The Legislature has already implemented furloughs to save money on salaries.

Reduce travel and bonuses for government employees. Employees don’t get bonuses. Agencies have reduced travel during the recession.

Add to the hotel room tax. The Legislature passed a room-tax hike in 2009, and lobbyists say another tax hike could make Las Vegas less competitive in the lucrative convention industry.

More incentives for volunteering to assist state agencies. The Governor’s Commission on Service already exists.

Dramatically reduce state work done by out-of-state companies. The Legislature tried to achieve this in 2011 via a bill that gave bidder preference to local companies.

Problematic ideas:

Bird had intended for his students to brainstorm ideas as a critical thinking exercise. But many of the ideas have some problems:

Tax gaming an additional 10 percent. The most powerful lobbyists at the Legislature are gaming lobbyists. There are dozens of them. A 10 percent tax increase proposal would likely be stillborn.

Tax all Nevada companies and individuals with foreign bank accounts. Most lobbyists familiar with tax policy had a simple question: How?

Luxury tax for items over $1,000. “This could be a fridge, a stove,” said Carole Vilardo, executive director for the Nevada Taxpayers’ Association. “I don’t know that you would consider those luxuries.”

Reduce lawmaker pay by 10 percent. Sure, say lobbyists. Cut that $8,777.40 salary by 10 percent and multiply it by 62, the number of legislators in Nevada. You get a whopping savings of $54,419.88. Nevada already pays its lawmakers less than most states.

Triple the fee for a marriage license for out-of-state couples. “That would sure put me out of business,” said George Flint, the lobbyist for many of the state’s legal brothels and wedding chapels. He suggested his perennial idea of taxing brothels instead.

A new tax on fast food. Several lobbyists who navigate tax issues at the Legislature asked: “What is fast?” “When you get into the details, how do you distinguish what fast food is?” Vilardo said. A bill to do this has already died this session.

Develop one toll road in both the north and the south. Sure, this could raise revenue, but it’s another perennial idea that never seems to go anywhere.

Unconstitutional ideas:

Many of the students’ ideas could encounter immediate legal problems.

“Maybe the law needs to be changed,” Bird said.

That could be done, of course, but it would take years to accomplish. A constitutional amendment requires either two votes of the people, or the Legislature must pass it twice and then voters ratify the amendment.

Develop a state lottery. The state constitution is pretty explicit here. It says: “No lottery may be authorized by this state.”

Have an income tax for those making over $500,000. The state constitution says: “No income tax shall be levied upon the wages or personal income of natural persons.”

Have an inheritance tax. The state constitution says: “No inheritance tax shall ever be levied.”

Enact a tax on all TV political ads. The First Amendment of the U.S. Constitution says: “Congress shall make no law ... abridging the freedom of speech.”

Change state law to allow for 10 percent deficit spending. It’s not a matter of law. The state constitution requires a balanced budget.

Lower the two-thirds majority required for a tax increase. The state constitution requires the two-thirds majority.

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  1. Why were the students not brainstorming budget CUTS?

    Eliminate waste, fraud and abuse and there is already plenty of tax revenue.