Going green

This week, they learned that they’d have about $6.84 billion in general fund revenue to disburse over the next two years, including about $1 billion in new funding.

But that isn’t nearly enough spending money for the 2007 Legislature. Lawmakers were counting on at least $100 million more. So they went looking for a scapegoat — and they found a whole bunch of them in the mirror, staring right back at them.

Two years ago, lawmakers passed sales and property tax breaks for “green” construction projects — those that emphasize energy efficiency and renewable resources — in the name of air quality, energy independence and feel-good environmentalism. Several companies applied for the exemptions, which allow property tax reductions of up to 50 percent for up to 10 years.

Already-approved projects include MGM Mirage’s $7.4 billion CityCenter complex and Boyd Gaming’s $4.4 billion Echelon development. Other Strip projects in line for tax breaks include the Wynn Encore, the Palazzo Resort and the W Hotel.

Lawmakers can’t be sure how much these hotel-casinos will be saving on their tax bills, but they figure it will amount to a lot. School districts and local governments are also complaining that they’ll be short-changed as a result of the law. Assembly Speaker Barbara Buckley, D-Las Vegas, said one analysis shows the tax breaks could cost the Clark County School District up to $900 million in revenue over the next decade — money that would have to be made up by the state general fund.

So lawmakers are moving swiftly to pass a temporary suspension of the law to better examine the long-term fiscal consequences of the tax breaks. Republican Gov. Jim Gibbons has indicated he’ll veto any such bill, which could result in a tax increase for these properties and unjustly punish them for taking advantage of incentives that were dangled before them just two years back. Both the Assembly and the Senate appear to have enough votes to override any veto.

The companies wouldn’t have submitted their “green” construction plans if they weren’t offered the tax breaks. These kinds of expensive enhancements simply don’t pay for themselves over time without generous subsidies.

But now that these companies have participated — squeezing lawmakers’ wish lists in the process — it’s suddenly bad policy?

The fact is, these tax breaks, which died during the 2005 regular session but were miraculously resurrected during a special session, are nothing more than larded-up social engineering. We’re all for lower taxes, but only when they’re assessed in a fair and consistent manner. The tax code should not be used to encourage or discourage specific kinds of behavior.

After all, if going green is too costly for tax collectors, imagine how much it costs the private sector.