Las Vegas Sun

October 23, 2017

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Running on empty

Gov. Gibbons fails to recognize Nevada needs a broader-based tax revenue stream

Gov. Jim Gibbons, a frequent target of criticism from university system Chancellor Jim Rogers for opposing new taxes, wrote Rogers on Tuesday that “the state needs to live with the revenue it receives from our current tax sources, which would be adequate to meet our needs if we managed our finances more responsibly.”

The problem with this statement is that it implies Nevada has an adequate tax revenue stream to begin with. Nothing could be further from the truth.

For too long, Nevada has implemented a Band-Aid system that relies heavily on sales and gaming taxes, creating an imbalanced revenue stream in which large retailers and other nongaming businesses have been off the hook. Yet these companies and their employees also use government services such as schools, roads and public safety.

What Gibbons fails to recognize is that Nevada has not maximized its revenue stream, not by a long shot. Past attempts to pass reasonable broad-based business taxes simply have been rejected out of hand because many Republican state lawmakers don’t want to step on any toes.

One former Republican politician who does make sense is ex-Gov. Kenny Guinn, who told Las Vegas Sun reporter David McGrath Schwartz for a story that appeared Thursday Nevada must do more than simply discuss ways to cut the state budget. Nevada must develop a long-term plan that addresses both the budget crisis and ways to rebuild services that have been cut, said Guinn, who presided over the state’s tax increase in 2003.

No long-term plan will succeed, though, unless Gibbons comes to the realization that Nevada’s tax revenue system is broken and must be repaired. Because the governor will not budge from his “no new taxes” mantra, we can forget about any long-term plan coming out of this administration.

Gibbons’ only strategy, which he plans to propose to the Nevada Legislature next year, is to place a harder cap on state spending. By ignoring potential long-term revenue options, the governor has demonstrated that he is not the fiscal leader Nevada needs to move forward.

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