Thursday, May 2, 2013

Writing on the Wall

Yesterday, Governor Brian Sandoval (R-Denial) received some good news. The Nevada Economic Forum projected $5.85 billion in revenue for the next biennium. Add in the nearly $600 million that Governor Sandoval wants to squeeze out of the Sunset Taxes (again), and the "GovRec" budget is about $44 million under the new projection.

So this is good news... Right?

“It shows we are not recovered,” Sen. James Settelmeyer, R-Minden, said. “We are not doing great.”

“Its peanuts, really,” said Ira Hansen, R-Sparks, referring to the $44 million more that Wednesday’s projections produced. [...]

“The only way we are going to get more for education is to raise revenue,” said Sen. Debbie Smith, D-Sparks, and the chairwoman of the Senate Finance Committee. “It is clear that our current situation is not going to do it.

“The speculation and comments that we have heard, that we will grow our way out (of the recession) so we can better fund education really doesn’t appear to be the case,” Smith said. “So we have to take a hard look about where we are.”

Democrats were expected to propose a new tax package that could include removal of many loopholes in the Live Entertainment tax and tweaking the Modified Business Tax.

“We were kind of treading water until we saw what happened today,” said Smith, speaking of the Forum. “We wanted to see what the extra revenue looked like.”

While they won't publicly admit it, it's starting to look like legislators are realizing that Nevada is indeed in great trouble. The state may soon be slapped with a law suit over inadequate public education funding. In addition, the state is already mired in hot water over the burgeoning mental health patient dumping scandal. Long story short: We're in deep s**t, and $44 million isn't nearly enough to fix decades of chronic underfunding of our public infrastructure.

Yet while the State of Nevada is still struggling, The Strip increasingly looks like Easy Street. Just today, MGM Resorts posted its first overall net profit since 2008. And Wynn Resorts continues to post strong earnings while looking for expansion opportunities.

Yet yesterday, Steve Wynn actually tried to cry poor in Carson City. No, really. See this.

So of course, Wynn won't allow for any gaming tax hike. But of course, that was never really being considered. I guess he's just so paranoid concerned about it that he wants to prematurely kill it by having legislators consider mining tax reform instead. At least on this, his wish is being granted today.

Feeling increasingly cornered, mining industry lobbyists are lashing out in Carson City today. They're decrying "economic populism". And they're claiming SJR 15 will destroy the world if enacted. And of course, reality continues to chime in and suggest otherwise.

Mining industry lobbyists have been working for a long time to quell any possibility of mining tax reform. But when even other parts of the previously united business lobby are breaking away and pointing fingers at mining, we have to notice that writing on the wall. And of course, when Nevada has its back against the wall in struggling to keep up with glaring needs, that writing on the wall becomes even clearer.

Something has to give. Something must change. The state needs more revenue. And the mining industry can certainly afford to pay its fair share.

Of course, this is still far from over. Mining lobbyists continue to fight like help to stop any & all mining tax reform. And the IP 1 "Mod Squad" clusterf**k threatens to complicate what should be a clear cut issue.

Yet with that being said, there's now an opening. The writing on the wall clearly points to it. Will legislators finally take it?

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