VICTOR JOECKS: Squishy Republicans’ approval of mining tax was terrible policy and political malpractice
Squishy legislative Republicans just pulled off an embarrassing twofer. They helped Democrats pass bad policy that hurts the GOP politically.
The big news at the end of the legislative session was the creation of a new tax on the mining industry. It’s projected to raise $170 million over two years. Because new taxes require a two-thirds vote, the bill needed at least two Republican votes in the Assembly and Senate.
A few policy points worth noting. For one, Nevada didn’t need to raise taxes. In May, the Economic Forum, which creates binding revenue projections, said the state would have $586 million more to spend over the next two years. That’s a significant increase in a two-year budget that was around $9.1 billion before this tax hike. Also, the federal government is sending Nevada billions of dollars in coronavirus relief funds. That’s bad news for inflation and future generations but good news for the state’s coffers.
Finally, you can’t fix Nevada’s broken education system by pouring more money into it. You’ll simply end up paying more people more to do the same thing.
Then there are the political considerations. The Clark County Education Association qualified two initiatives for next year’s ballot. One would increase the sales tax by 1.5 percentage points, pushing Clark County’s sales tax to almost 10 percent. The other would increase the gaming tax.
The union said that it would spend $10 million promoting those initiatives but that it would withdraw them if the Legislature approved the mining tax. Withdrawing an initiative is constitutionally dubious, but it’s unlikely anyone will challenge the union if it does so.
Every Republican should have been thrilled to be running against those initiatives. Gov. Steve Sisolak and Democrat legislators would have had to either upset their base or support massive tax increases as Nevada comes out of an economic downturn.
Here’s how you can tell these initiatives were political losers. The union said they would generate $2.8 billion every two years. The new mining tax will generate 6 percent of that, and the union claimed it got what it wanted. Now, the union says it will spend its money on down-ballot races. An easy prediction: The vast majority of it will go to Democrats.
It would be one thing if moderate Republicans knew the difference between compromise and capitulation. An offer of $50 million in annual, ongoing tax credits for Opportunity Scholarships, Nevada’s only school choice program, would have been worth considering.
Instead, Democrats gave Republicans $4.7 million in one-time tax credits for Opportunity Scholarships and allowed new students to access the program. Democrats gave $15 million to charter schools and gutted a bill that would have created straight-ticket voting.
And that appears to have been it. That’s all it took to get the necessary Republican votes. Pathetic. Bravo to most Republicans for rejecting that package.
Donald Trump wrote “The Art of the Deal.” Squishy legislative Republicans just showed off the art of defeat.
Contact Victor Joecks at vjoecks@reviewjournal.com or 702-383-4698.