Tuesday, February 28, 2012

Fears of Californication?

Yesterday, prominent Nevada GOP power player, R&R big wig, (and confirmed Sandoval inner circle member) Pete Ernaut complained about the new push to bring tax initiatives to the ballot so Nevada voters can finally do what our Legislature apparently can not do. You tell me if you notice something familiar here.

“It should be warning to everybody because this is something that could very rapidly turn into the next iteration of the California ballot, where we have 10, 12, 13 ballot measures on a number of issues and you wake up one day and really you’ve taken the power away from the Legislature or the governor to make any decisions,” he said.

“And that’s really what they’re struggling with in California more than anything else is you have this entire apparatus in the California state Legislature that essentially has the ability to make decisions on about 5 percent or 6 percent of the entire California budget,” Ernaut said in an interview on the Nevada NewsMakers television show. “If we’re not careful, that’s the way that it will go.”

Now before I explain why I suspect Ernaut said this, I actually want to give him some props for pointing out what I've been saying here for several months. California, here we are!

As we were discussing on Sunday, California currently has three tax initiatives competing for voters' attention and support this year: one by civil rights attorney Molly Munger that seeks to raise income taxes on nearly everyone, one by Governor Jerry Brown (D) that mostly raises income taxes on the wealthy but also keeps in place a sales tax hike affecting everyone, and one by Courage Campaign and the California Federation of Teachers that only raises taxes on the ultra-wealthy earning more than $1,000,000 a year. All three promise to restore investment in public education that's been slashed to death, but all three also face challenges in the duration of the new revenue stream, as well as how much each of them can really pull in.

And of course, we can't forget how California got into this mess in the first place. Starting with the Prop 13 tax restructuring of 1978, followed by the education spending mandates in Prop 98 in 1988, followed by a whole series of special tax policies and spending formulae approved by the voters all through the 1990s and 2000s, California's budget has become an unmanageable fiscal hot mess. And especially because we as people like to "have it all" without ever paying for any of it, California faces chronic budget woes. (It turns out that passing spending mandates without finding the appropriate revenue to fund them causes huge budgetary problems. Surprise?)

However, not all of California's or Nevada's problems can be blamed on "we the people". The reason why Jerry Brown, Courage Campaign, and Molly Munger want to take their respective tax initiatives to the voters is because an intransigent and obstructive G-O-TEA minority in their Legislature refuses to consider any kind of sensible tax reform. And now that sensible Republicans like the late Bill Raggio and Kenny Guinn are distant memories for Republican leadership in our Legislature today, we're now facing the same problems. While I understand, and even sympathize with, Pete Ernaut's concern about "direct democracy run amok", what else are we the people supposed to do when our Legislature can't do its job and pass a workable budget?

And this brings me to the reason I suspect Pete Ernaut is really worried about the proposed tax initiatives: They're aimed at his clients. Ernaut seems to worry about the Legislature losing its authority on the budget now, but he didn't seem to mind Republican legislators giving a big, fat "Gov Wreck" rubber stamp to Brian Sandoval's original slashing of public education before the Nevada Supreme Court forced him to agree to extend the 2009 tax deal. But now that Monte Miller, the Nevada AFL-CIO, and Kermitt Waters are all aiming at Ernaut's top R&R clients, he all of a sudden wants the Legislature to set tax policy. Is that just because he thinks we the people will do what the Legislature hasn't done?

Republican pollster Glen Bolger, who does polling for the Retail Association of Nevada, revealed in his newest survey that Nevadans want the mining industry to pay its fair share.

Mining tax:

As you may know, there is a proposal to increase the state mining tax. I would like to read you
two statements that people are saying about the proposal. After I read each statement, please tell me which one comes closest to your own opinion.

Some people say increasing the state mining tax is a good idea because with the increase in the price of gold and other minerals, the mining industry is undergoing a boom time and should pay a higher tax rate.

... while...

Other people say an increase in the mining tax is a bad idea because at some point the price of gold and other minerals will drop back down to normal levels and a higher tax rate will hurt the industry and cost jobs.

Which statement comes closest to your own opinion?



Now this explains why the mining industry is suing to block Monte Miller's mining tax initiative. Ernaut has probably seen similar private polls showing similar results. The more Nevadans learn about how multinational mining corporations have abused our tax code to pay virtually nothing for profitting off our natural resources, the angrier we get. And if the decision on how much to tax them moves from the Legislature to "we the people", the mining industry will probably have to kiss its sweetheart deal goodbye.

This probably also explains why "big bid'ness" power brokers (like Monte Miller?) fear the AFL-CIO's margin tax on big business. In addition to the mining industry, other big multinational corporations like to set up "on shore tax shelters" here in Nevada to avoid paying taxes. But really, what do we get out of it? After seeing them profit while Nevada families suffer from decaying schools and inadequate transportation infrastructure, Nevada voters may also be ready to finally make the big guys pay their fair share.

So in the end, Pete Ernaut may have a valid point in stating the problems with "ballot box budgeting" and waging electoral campaigns on tax policy. However when the Legislature won't tackle this, someone has to. And when Nevada is in real need of real reform that finally moves our tax code into the 21st century, we can't blame citizen activists for wanting to take matters into their own hands. And since Ernaut's own BFF in the Governor's Mansion encouraged obstruction on tax reform in Carson City last year, he should have realized that he helped bring "Californication" of Nevada policy making here.

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