(Todd Taxpayer Bailey) – If you’ve ever seen, “The Sting”, a great movie that swept the Academy Awards in 1974, you know there is setup on the mark before the “real sting.” Such is the end result of the 2011 Nevada Legislative Session and a “historical” ruling by the Nevada Supreme Court. It resets the political foundation for the 2012 election cycle, which starts on June 7th, right back to the end of the 2009 session.
Many of the same unresolved questions about Nevada’s future will remain, with new questions added in.
To everyone’s credit at the Nevada Legislature (citizens, lawmakers, lobbyists, media), a path was found to avoid the government shutdown that would’ve been the end result of the Supreme Court decision without a compromise. Nevada will make it through another two years without the chaos so often presented as testimony in many committee meetings.
The Supreme Court decision was characterized as “historic in the way Nevada crafts its state budget,” which is true; however, it left many details on the table that create a murky future for policy makers across the state. Did the court’s decision create a $62 million deficit, or a $600 million deficit? Do local governments have a legal case to recover previous diversions, and how far back? The questions may never have answers, perhaps by design.
With no desire to return to the “Summer of 2003,” Governor Sandoval and many Republicans in the Nevada Legislature began to consider lifting the “sunsets” on tax increases from the 2009 Legislative Session. Many, including the Governor, promised their supporters they would not do that. Wisconsin protests in Nevada? Not this year.
The “Historic” Budget Deal of 2011 has many things to vote “Yes” on, starting with the elimination of the Payroll Tax for businesses that have payrolls of less than $62,500 per quarter. Beginning with an e-mail at the start of the 2009 session from LowerNevadaTaxes.com, this is a big win for those who have advocated for the elimination of the Payroll Tax for two years. State spending goes down by $500 million, and some mild reforms to education. Not perfect, not bad.
The “Historic” Budget Deal of 2011 has many things to vote “No” on, starting with the murky future for policy makers on what exactly the Supreme Court said: Is it $62 million deficit, or a $600 million deficit? The legislative vote will contribute to court precedence. AB78 will raise taxes on the smallest of Nevada’s Home based businesses who chose to Incorporate in the State of Nevada, and may decimate the Corporate filing industry in Nevada. There will also be the lingering question of “Trust.”
So where is the “Sting”? The “Historic Budget Deal of 2011” is The Setup for the 2012 political campaign, and the 2013 Nevada Legislative Session, exactly 10 years since 2003, with many of the same players, proxies, and sticky issues. Two rising stars will be center stage in that discussion, SB491 The Gross Margins Receipts Tax and AB569 The VAT Services Tax.
The SB491 Gross Margins Receipts Tax would tax all revenue over $1 million after some deductions, and the AB569 VAT Services Tax would create a pyramid effect by taxing all services at every stage of production and sale. Despite endless testimony from those who would not pay the tax, the money has to come from somewhere, and therefore both SB491 and AB569 would make almost everything more expensive for everyone in the entire State of Nevada. Look for both of these rising stars in a political campaign, ballot questions, and future legislative sessions near you.
It’s assumed that all Democrats in the Nevada Legislature will vote Yes on the “Historic Budget Deal of 2011.” It is the Republicans who must make the most difficult decision of the session, to vote No. So many used the Governor as back stop, and not principles, as their first line of defense. That’s gone, leaving them to defend their positions on two sides. Regardless, these few will be in the minority, which should not be used as an assumption for future events. This debate is wide open, thanks to the Nevada Supreme Court.
Republicans come out of this with much of what they came to the Nevada Legislature for in 2011: some lower taxes, a little less spending, a few reforms. It’s not everything, or even close. In the campaign and session to come, it will be important to focus on the bigger battles, as this one is a draw (attrition). Most of all, Republicans must develop contingencies for anything, as that didn’t seem to be available after the Supreme Court decision was rendered, as everyone in the state has seen.
The number of Yes or No votes, while important, is secondary to realizing this is The Setup for the 2012 election. There is an opportunity for Republicans to gain seats in the next election, otherwise SB491 and AB569 would already be signed into law.
The last line at the press conference to announce the deal came from Governor Sandoval, at the urging of a reporter when he said, “The structure of our tax system bears review.”
Will Republicans take this opportunity? Sometimes when standing so close to something so important for so long, it’s easy to miss what’s really going on, just like in the movie, “The Sting.” The Setup for the 2012 election cycle comes out of the “Historic Budget Deal of 2011,” and begins on June 7, 2011, an almost repeat of where state politics was in 2009.
Despite the best efforts of so many, my, how history repeats itself.
(Todd Taxpayer Bailey is publisher of The Capitol Chronicle.)
Facebook
Twitter
Pinterest
RSS