Battle lines drawn after historic tax hearing

CARSON CITY

State Sen. Michael Roberson, R-Henderson, said at the start of Wednesday’s nine-hour tax hearing that “this is an extraordinary day.”

And he wasn’t wrong: One sitting and three former governors of both parties showing up to ask the Legislature to reform Nevada’s tax structure. Gov. Brian Sandoval, a student of history, said it was the first time four chief executives had testified before a legislative committee in the state’s 150-year history.

Former Gov. Bob List, a Republican, took aim squarely at some members of his own party when he derided “no new taxes” as “a rather arbitrary and stubborn attitude.” Former Gov. and U.S. Sen. Richard Bryan said Nevada had followed the “holy grail” of lower taxes in pursuit of economic development long enough. And former Gov. Bob Miller said this session is the best opportunity the Legislature will ever have to fix the state’s tax structure.

“This Legislature has a rendezvous with destiny,” Bryan declared.

What followed those remarks was equally impressive: Support for Sandoval’s tiered business license fee, based on gross receipts, came from a huge swath of the Nevada business community. The Northern Nevada Development Authority, the Las Vegas Global Economic Alliance and the governor’s own Office of Economic Development all testified in favor of the proposal. Representatives from Switch Communications, IGT, the state and Clark County teachers’ unions, the Nevada Homebuilders Association, the Nevada Subcontractors Association, the Nevada Hospital Association, the Nevada Resort Association, taxicab companies, the Latin and Urban chambers of commerce and the Nevada Mining Association all spoke in support as well.

Yes, it was an obviously coordinated effort, but the groundwork that led to the hearing was an impressive display of politics in and of itself.

In opposition — subtracting those who did their cause no favors by tossing right-wing bromides and discredited economic theories at the assembled lawmakers — were some of Nevada’s big industries. Paul Enos of the Nevada Trucking Association said he preferred using the payroll tax (with no exemptions and a higher rate) to fund new education spending. Matthew Taylor of the Nevada Registered Agent Association said the state has already lost corporate registrations by raising the business license fee from $100 to $200, and would doubtless lose even more with the minimum increase proposed by Sandoval of $200 to $400. And Brian Wachter of the Retail Association of Nevada warned that it would be too complex and increase the cost of retail goods.

And then there was the Las Vegas Metro Chamber of Commerce, which bills itself as the voice of business. The Chamber has said repeatedly that it wants to study the tax. But now that the bill has been publicly released, and after a nine-hour hearing at which it was deconstructed in detail, the Chamber could muster only praise for Sandoval for “his leadership and his courage.” Ah, if only it were contagious. It took a simple question from state Sen. Joe Hardy, R-Boulder City, to elicit the Chamber’s real stance: “Currently, the Metro Chamber is analyzing this bill and is neutral at this time until our analysis is complete,” said Chamber lobbyist Paul Moradkhan.

Contrast that with a former Chamber official, Steve Hill, who now heads the governor’s economic development efforts. He said future economic development efforts depend on improving schools, especially for high-tech jobs. “You can’t take two or three steps on the one side [economic development] and not catch up on the other side [education],” Hill said.

The biggest obstacle to economic development is a poor education system and an untrained workforce, Hill added. Take care of that and you will take care of Nevada’s economic development issues. It’s a point echoed by two of the state’s largest economic development organizations, and a handy reminder: Education is the only economic development program that’s really going to work for Nevada long-term.

The governor gets it. Three of his predecessors get it. Most of the state’s major businesses get it. Even the businesses that disagree with Sandoval’s tax approach appreciate the need and have their own preferred alternatives.

Will the Legislature get it in time to make its rendezvous with destiny?

Steve Sebelius is a Las Vegas Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or ssebelius@reviewjournal.com.