(Jim Clark) – Nevada Policy Research Institute (“NPRI”) was founded in Reno in the 1990’s as a private, non-profit, free-market and limited government policy research organization emphasizing education, tax/fiscal and labor issues related to Nevada public policy. I had the honor of serving as its vice chair in the late 1990s in a little donated house on West 2nd Street in Reno.
Since then they have moved to Las Vegas and expanded their board with luminaries that look like a microcosm of Nevada’s most successful businesses. NPRI has published research papers supporting Incline’s Property Tax Revolt and just this week sponsored a forum in Reno featuring Village League to Save Incline Assets President Maryanne Ingemanson on the topic” “What Do You Do When the State Doesn’t Obey its Own Laws”.
NPRI just published a tax policy analysis titled “One Sound State, Once Again”. The research was prompted by the Nevada Legislature’s Interim Finance Committee “finding” $500,000 of incidental money to hire a firm to study “comprehensive tax reform”, in reality intended as a cover for lawmakers wanting to pass tax increases next session.
The piece starts off with the Great Depression of the 1930’s when state and business leaders launched a promotional program called One Sound State, seeking wealthy investors and businesses to move to Nevada because there is “no income tax, no inheritance tax, no sales tax, no tax on intangibles, a balanced budget and a surplus.” By 1939 the surplus had grown so large that the property tax rate was cut by 20%.
Contrast that with the free-spending legislatures of recent years. In 2003 there was a major fight as then Gov. Guinn pushed a gross business receipts tax. That failed but other taxes still got increased resulting in a 31.7% increase in fiscal year 04-05 revenues.. This was easily disposed of by increasing spending by 51.3%. As the current recession began to affect revenues the legislature increased taxes again by 19%. As the economy recovers revenues will balloon even more and . . . you guessed it . . . spending will increase by at least as much as any revenue increase.
The NPRI study is over 30 pages (take a look at www.npri.org) but it concludes by proposing the following revenue neutral legislative changes: (1) eliminate the 2003 business tax increase, (2) eliminate the insurance premium tax, (3) broaden the sales tax base to include services and reduce the state sales tax rate to 3.5%; (4) implement priority-based budgeting instead of starting with last year’s budget, and (5) implementing controls limiting state spending growth to the rate of inflation plus population growth.
In the past the media and Democratic leaders dismissed NPRI proposals as unworthy of comment. Last week Nevada’s prime political pundit, Jon Ralston, writing in the Las Vegas Sun, said: “So why not let NPRI’s legacy . . . be the beginning of a substantive debate on a real, long term solution? If Democratic lawmakers and their leftist allies would at least give credit to NPRI for agreeing to an expanded tax base maybe the discussion will finally go somewhere. Come on, liberals, the right is not always wrong.”
And the Reno Gazette Journal editorialized: “Despite all the talk about the problems caused by Nevada’s tax system there has been little discussion of how it can be improved. (NPRI’s) plan does give policy makers something to talk about. That’s more that anyone else has done so far.”
Serious consideration of conservative fiscal proposals? The age of miracles has begun.
(Jim Clark is President of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee)