12 minute read
News
from March 5, 2015
Lobbyist Carole Vilardo, like a lot of figures at the Nevada Legislature, is biding her time.
Advice trips up board, again
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For the second time in less than a year, the Nevada Attorney General’s office has accused the Washoe County School Board of an open meeting law violation for following the advice of the school board lawyer.
At the Oct. 28 meeting, local resident Karen Dunaway was attempting to criticize the firing of school district police chief Mike Mieras by Superintendent Pedro Martinez when—according to the AG opinion—board counsel Randy Drake interrupted her remarks on the ground that Martinez had not been notified of the topic. Board member Barbara McLaury, who was presiding at the session, also said that Dunaway’s comments were inappropriate.
Board member David Aiazzi disagreed, saying that the notification requirements applied to business before the board, not to the public comment period. But Drake’s reading prevailed, and Dunaway was not permitted to complete her statement.
The attorney general’s opinion read in part, “Ms. Dunaway was not a member of a public body; therefore, the notice provisions of [the open meeting law] did not apply to her. ... Chairperson McLaury’s decision to stop Ms. Dunaway’s comment was an unreasonable restriction on public comment and a violation of Ms. Dunaway’s right to speak on a matter of public concern.” The opinion did not address Drake’s conduct.
According to the Nevada Open Meeting Manual, prepared by the attorney general’s office, “[W]hen members of a public body rely on advice of counsel, they should not be held to know that a violation occurred.”
The latest opinion was prepared by deputy attorney general George Taylor, who in 2013 wrote, “[P]ublic body members may be protected from penalties if the member has sought advice of counsel and acted in accordance with the advice.”
Remembering Jim
The Jim Gibbons era in Nevada history may be difficult to forget, but the Nevada Democratic Party is making sure.
The party’s www.AmericasWorstGovernor.com website is still posted online, four years after Gibbons’ administration became a memory. It has been years since anything new has been added to the site. Nevertheless, there are plenty of oldies but goodies for nostalgia buffs.
Tesla bill starts coming due
Reuters reported that Economic Development Authority of Western Nevada executive Mike Kazmierski recently had “good news to report to the 400 local businesspeople who had gathered to hear him speak at Reno’s Atlantis Casino ballroom in January. During 2014, 34 companies had relocated to the area. Nearly 4,200 jobs were created, bringing unemployment down to 6.4 percent, a big drop from 2011’s high of 14.2 percent.”
What the news service failed to report is that Kazmierski has also called for Nevada’s low income citizens to pick up the tab for the cost of this boom by raising the sales tax—again—for 10 years.
“Our immediate need is four new elementary or middle schools and half of a high school,” Kazmierski wrote in the Reno Gazette-Journal on Feb. 18. “In the next 10 years, we need another 10 schools, and none of this funding is in the school funding proposal being considered by the Legislature! So we are looking at approximately 400 more portable classrooms at a cost in excess of $60 million, and there is no funding in the budget for portable classrooms, either!”
Kazmierski then called for a half-cent hike in the sales tax for 10 years.
Sales taxes impose a heavier burden on low-income residents. Since a 2 cent state sales tax was created in 1955, it has risen to 6.85 percent—one of the highest state rates in the nation—with county sales taxes supplementing that at an average rate of 1.08 percent per county.
Washoe County is still carrying a sales tax hike to pay off the casino industry’s project lowering the railroad tracks through Reno. —Dennis Myers
Phantom
All await Sandoval’s details
Republicans and Democrats both say they are working to make Nevada’s notoriby ously regressive tax system more Dennis Myers fair. But Republicans say that means helping businesses and Democrats say that means helping individuals—and businesses. “Smaller businesses have not gotten as good a deal under our current tax system,” said Senate Republican leader Michael Roberson. “The governor is trying to get people who have skin in the game to come together to make business taxes fairer.”
Gov. Brian Sandoval
Assemblymember Maggie Carlton, a Democratic leader, said, “That’s what we’re going to deal with, is tax fairness. I mean, equity. That’s what we’re talking about. We’ve been talking about policy issues. We’re not working on numbers. We’re not trying to get to a certain number. We’re trying to make sure that the system we have is fair and equitable across the board for all businesses and all citizens of the state.”
Does she think fairness will get traction in the legislative process, for a change? Her new position in the minority made her laugh at the query.
“You’d have to ask the guys in control right now,” she said. “I know my people feel that way. We care about fairness with our constituents.”
Whether fairness—however it is defined—will play any kind of role is far from certain. In most past tax changes in the Nevada Legislature, lawmakers started out talking about fairness and, pressed for time and pressured by lobbyists, settled for trying for stability and predictability in taxation.
Members of the public tend to have few lobbyists on hand to speak for them. That is not a problem that afflicts the state’s businesses. From A&A Midwest, an auto wrecking firm, to Zuffa LLC, an “ultimate fighting” corporation, with various chambers of commerce and the Nevada Resort Association casino lobby in between, businesses are well represented at the Nevada Legislature—which explains why business taxes are higher on the radar.
Gov. Brian Sandoval’s plan to raise about $440 million in a biennium (two years) with a business license tax will likely get considerable scrutiny, as tax proposals in Nevada always do, for how well the state can project the revenue it brings in and how much it will fluctuate in hard times. But legislators traditionally have far less interest in the fairness of tax plans, and that has been the case here. Sandoval has called it fair. “I do want to emphasize that it is not just about the revenue,” he said. “As we go into this session, reform and accountability are going to be just as important to me as well.” But independent analysis from outside government of his proposal’s equity has not been forthcoming. That’s because, with a fourth of the legislative session past, Sandoval has yet to produce his plan in written form.
Carole Vilardo, lobbyist for the Nevada Taxpayers Association—a business group—and one of the state’s leading tax experts, said on the day Sandoval proposed his plan that she would wait to see it in writing. She is well known for saying that the devil is in the details. But so far, the plan has not been presented in bill form, so Vilardo is still reserving judgment.
“No, I haven’t seen any language,” she said. “I can’t very well give you a reading when we don’t know what’s in it.”
She’s not the only one waiting on the bill. Fiscal analysts, economists, tax experts want the language so they can find out if it lives up to its billing. So far, the governor has been able to spend a month selling the phantom plan and no one has been able to respond in an informed way.
The fact that the governor calls the tax a “fee” has raised suspicions among lawmakers, making them believe that they should withhold commitments for a while. Fees are generally regarded as costs applying to individuals or an identifiable class of individuals—a barber license, say, or a car registration. Sandoval is talking about how broad his tax is while calling it a fee, which by its nature is supposed to be narrowly based. His willingness to play with the language isn’t winning him any votes, particularly among the already wary tax intransigents of his own party.
One legislator who didn’t want to be named said, “All we know is that it’s ‘broad, fair, uncomplicated’”— making quote marks with his fingers, referencing the governor’s mantra over the last month. “That’s not a tax plan.”
Economist Thomas Cargill, who has been scrutinizing Nevada taxation for decades (“It happens,” RN&R, May 23, 2013), wants the language so he can examine a number of factors, including fairness. So far, even the governor’s descriptions have not been encouraging, he said. “In general, it is a poorly designed tax that has many of the same problems as the gross receipts tax because it ignores the different profit margins of various industries.”
Service tax
of extending Nevada’s sales tax to services as well as goods, which would make the sales tax more fair and less regressive.
Economic populist Robert Reich last year wrote that states shielding services from sales taxes are engaged in a giveaway to the financial services industry: “Revenues from state and local taxes are 40 percent of all government revenues, and most come from sales taxes. Yet sales taxes are regressive, taking a bigger chunk out of the incomes of the poor than the rich. In addition, even though the rich spend far more on professional services than do the poor (services of lawyers, accountants, investment advisers, wealth managers, and so on), professional services aren’t subject to any sales tax at all. My view is if they must have a sales tax, state and local governments should also apply it to professional services.”
Though it would involve extending an already existing Nevada tax to services, after Nevada legislative hearings on the proposal, some figures said the concept was too complicated and difficult to apply for the next state budget biennium, both in lawmaking and in implementation by the executive branch.
Naturally, those who might expect to be hit hardest by a Nevada service tax—lawyers, stock brokerages, insurers—are not crazy about the proposal and legislators seem inclined to resort to that tested method for avoiding a decision, a study. No legislator ever went wrong keeping wealthy businesspeople happy. The governor is also supporting a study.
Vilardo says again that the details are important to know, but she said the claims of difficulty in establishing the service tax are incorrect.
“It would not be difficult to put it into place, if in fact you wanted to replace the live entertainment tax and make it the service tax” she said, her voice providing the emphasis. “Live entertainment is a service tax.”
“And there are ways of mitigating the pyramiding,” she added, referring to the way taxes are applied each time a business sells its goods or services as they move through a production chain.
The gambling lobby has been relatively quiet on the tax debate. Casino lobbyists in the past have said they don’t want any more taxes that target their industry but that they can live with taxes that have impact on all or most businesses, casinos included. That willingness contrasts with other business lobbyists who have said they will accept some broad-based business tax but have not, in more than a decade, found one among several proposals offered that they will tolerate. Ω
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