Friday, March 8, 2013

Mining for Clarity

This has been one exciting week in Carson City. After a month of stalemate on tax reform, Senate Minority Leader Michael Roberson (R-Henderson) came forward with his mining tax proposal. All of a sudden, a Republican offered a new tax plan, targeted perhaps the worst example of corporate welfare in Nevada, and revived something that many assumed (myself included) was dead in Carson City.

Yet even today, challenges remain. Remember that Roberson proposed his mining tax as an alternative to The Education Initiative. Yet while Republican legislators are united in opposition to that, they're divided on Roberson's alternative tax. This division was on display on KNPR this morning when Senator Pete Goicoechea (R-Eureka) proclaimed his opposition to both tax plans on "State of Nevada".

When confronted with the question of how to balance the budget and properly fund public education without either tax, Goicoechea had no real answer. That's the challenge for him, Sandoval, and other Republicans. That's probably a reason why Roberson and the rest of who Ralston calls "The Dirty Half-dozen" broke ranks with fellow Republicans. They realized this was a prime opportunity to take a more populist tack, show actual support for public education, and fight The Education Initiative in a more politically palatable way.

But again, this has managed to divide Republicans. And to complicate matters further, there's no clear path to Roberson's IP 1 alternative reaching the 2014 ballot. Ralston is still trying to wrap his head around that!

I'm no lawyer, but there doesn't seem to be any mention of a veto and an override, and this is a special case in the Constitution, unlike other bill passages. On the other hand, the word "approval" could be construed to mean "in the ordinary approval of a measure," which would mean to disapprove it Sandoval would have to veto it.

So I am, ahem, supremely confident it....could go either way. (I welcome legal opinions in the comments or via email.)

Roberson seems confident the alternative tax bill would be deemed vetoed and lawmakers could override. He has verbal confirmation from legislative attorneys.

That is, it is "the same language that is used for any bill," he told me. "The word 'veto' is not in the Constitution in connection with approval by the governor for any legislation."

And he's right. The word "veto" does not appear in the Constitution when it refers to the governor approving bills. But as strong a case as that may be, "approval" also has been construed in practice to mean the governor either signs it or he...vetoes it.

Article 19 of the Nevada Constitution only states that any alternative to an initiative petition must be approved by the Governor. Yet Governor Brian Sandoval opposes both IP 1 itself and Roberson's alternative. So what happens if/when Sandoval vetoes Roberson's mining tax? And that assumes Roberson's mining tax can achieve the 2/3 supermajority necessary for passage (and override of Sandoval's veto).

That's another major challenge. The mining industry has already been waging an expensive war just to derail SJR 15, the constitutional amendment to remove the 5% mining tax and all the loopholes (that make the effective tax rate far under 5%) from the Nevada Constitution. What will mining lobbyists do in the coming days to fight this new development? We all know that's coming.

And then, there's The Education Initiative itself. Will it have competition on next year's general election ballot? Will all the renewed focus on tax reform compel the Legislature to craft some sort of alternative? Will all the renewed tax reform talk actually help drive the message home for The Education Initiative?

Right now, the fiscal picture in Carson City is looking quite unclear. However, the renewed energy for progressive tax reform is looking crystal clear. What also is looking clear is the opening progressives now have for tax reform thanks to a divided Republican Party. So what will ultimately make it through that opening? We shall see.

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