stop making cents How t he sales tax became a monster by Dennis Myers
anet—not her real name—used to do her laundry at a laundromat on Rock Boulevard on Thursday evenings. She was a single mother of two, alone after separating from a husband with a serious drug problem. She chose that evening each week when there are few customers because the owner turned the coin slide on the washers so that it cost 25 cents less a load. Since she normally did three loads, it saved her 75 cents a week. She used that 75 cents carefully. It came to $39 a year. I once mentioned Janet’s care with her dollars and cents to U.S. Sen. Harry Reid. He said, “Wow”—and talked about how she would benefit from the earned income tax credit. Reid, a millionaire when he arrived in Congress in 1983, was still capable of being awed by the difficulties low-income people face. When the laundromat shut down, Janet found that other laundromats not only did not have that special Thursday night deal but their usual prices were higher, too. I thought of her when I heard that the sales tax increase of 0.54 percent in ballot Question WC-1 will cost an average family of four making $75,000 a year “only” $81 a year. How many school lunches or pairs of children’s shoes would Janet have been able to pay for with half that amount? The committee of businesspeople and other establishment figures who again selected the sales tax as the vehicle for a November 2016 ballot measure seeking more school money were not as impressed as Reid by the problems facing lowincome Nevadans. Committee Chair Shaun Carey told interviewer Sam Shad the sales tax “is not as regressive as the label that people often apply. It does not apply to food unless you are in a restaurant. The greatest cost to a person is actually when they buy clothes.” “We can do it at a price everyone can afford,” said Reno Sparks Chamber of Commerce CEO Len Stevens earlier this year.
J
Student volunteers for Save our Schools hand out leaflets at a “school overcrowding” meeting. PHOTO/DENNIS MYERS
That was not the sentiment in Nevada for most of its history. For the first nine decades of state history, the state avoided the sales tax like leprosy. By the 1940s, it was political suicide to support one. Then, in mid-1940s, the “boys” came marching home, and the business community leapt to exploit it. Service in World War II was the duration of the war plus six months. If that was designed to allow for a gradual release of soldiers and sailors back into civilian life so that societal infrastructure could handle the jolt. It didn’t work. All those wartime songs about the girls they left behind were prophetic. The arrivals home hit communities, states and the federal government with a wallop, particularly when they started producing children. The baby boom was born—and born was the correct term. There was a 57 percent jump in the Nevada birthrate in the first five months of 1947. By 1953, the impact on schools was near-emergency. Parents were banging on the doors of the capitol in Carson City demanding tax hikes. Businesspeople didn’t want to be taxed for obvious reasons. Labor didn’t want the sales tax because it screwed workers. But there was a split in the labor front—leaders of the state’s teachers were pushing for a sales tax. They were doing their teacher members—whose average salary was less than $3,250— no favors, but it didn’t matter in 1953 because a governor’s veto stopped any tax hikes. That threat was removed after the 1954
Where is the scrutiny of the ballot measure by journalists?
election, and the 1955 Nevada Legislature imposed the state’s first sales tax—two percent.
Save our SchoolS Labor wasn’t giving up. The state AFL-CIO turned to the referendum, which allows members of the public who gather enough signatures to put a state law on the ballot for a vote of approval. So in 1956 the public got a direct vote on whether to retain the new tax. School forces went into action, forming a group called Save our Schools to conduct a campaign in support of the tax. They were not underfunded. With the incentive of a looming business tax if the sales tax failed, the state’s businesses ponied up dough—and so did the casinos, who knew their low taxes made them an inviting target. It wasn’t even close—the sales tax was retained with a smashing 69 percent of the vote. But there was a side effect of that election which got little attention at the time. Under Nevada’s referendum law, a statute that is approved by a vote of the public cannot then be amended
Sto p m a k in g cen tS
continued on page 14
09.22.16
|
RN&R
|
13
