Put all options on the table

Gov. Jim Gibbons and the Nevada Legislature learned this week that they face an $881.4 million budget deficit. Gibbons will call legislators into special session later this month to figure out how to deal with it.

Of course, the governor is focused solely on budget cuts. He refuses to even consider raising taxes. The legislative leadership appears to have adopted roughly the same approach.

But why would our elected representatives consider only one of the possible remedies to such a serious problem? This strikes me as narrow-minded and irresponsible.

Nevada already has endured major budget cuts. The colleges and universities were hit hard in the last round, and now they’re being asked to make an even deeper cut, 20 percent or more.

And this is happening at a time when most Nevadans realize that education is the key to developing a more stable and enduring economy. In order to diversify the industries doing business in Nevada, we must have a more educated work force. And we can only get that if our institutions of higher learning are strong.

Conversely, if we cut higher education this severely, we are prolonging Nevada’s dependence on the high-risk tourism industry.

Why wouldn’t our political leaders consider options that would preserve our colleges and universities rather than gutting them? At risk of triggering a Tea Party in my front yard, I utter the dreaded words: raising taxes.

Contrary to Jim Gibbons’ line of reasoning, this is not “unthinkable.” In fact, it’s a completely reasonable response to the problem. Oregon, our border state to the north, recently took this unthinkable step. And it was the voters who did it.

Why did they do it? Three main reasons.

First, they didn’t want to further cut budgets for schools and other state services.

To be sure, Oregon voters readily approved the tax increases because they wouldn’t affect most of their own pocketbooks. Taxes were raised on the wealthy and corporations.

The third reason was that Oregon did not already have a high tax burden, and the increases on the ballot were fairly modest.

Now, Washington state is looking at a similar approach. After the Oregon vote, Washington Gov. Chris Gregoire said: “Oregon voters met the challenge of these difficult times and clearly said that schools, health care, public safety and other essential services cannot be forsaken. It is gratifying to see that the public understands the importance of preserving services to the most needy and providing education to the next generation — especially now when those efforts are most needed.”

Is it possible that Nevada could buck convention and consider some modest tax increases to help deal with its deficit?

Well, we know tax ideas are not going to emanate from the governor’s mansion. Gibbons is more of a “Let them eat cake” sort of leader. But I would like to think we have legislators with the common sense and fortitude to consider all the available options.

One option that should get a robust hearing is raising mining taxes. Gold values, in particular, are at record highs, and the big foreign-owned gold mining operations in Northern Nevada are reaping massive profits from the extraction of a public resource. Yet Nevada’s current taxation of mining is absurdly low.

Although increasing the mining tax would require a change to the state constitution, other legitimate methods could be employed more quickly to increase mining’s contribution to the state’s fiscal well-being. The main one is eliminating generous tax breaks enjoyed by the mining conglomerates, which would generate up to $150 million per year.

It’s hard to swallow, but another idea deserving of serious consideration is to increase credit fees for college and university students. It may not seem like it to some students and their parents, who have seen tuition hikes recently, but Nevada’s colleges and universities remain a very good deal. This would be the most direct way for higher education to escape the most egregious effects of budget cuts.

Realistically, even if Nevada were to raise some taxes to deal with the deficit, it’s unlikely they would amount to enough to balance the budget. So budget cuts are going to be part of the equation no matter what.

On the cutting side, the university Board of Regents have to take a hard look at whether they can justify keeping Nevada State College open. The state’s youngest institution of higher learning is also its least vital. Its very conception was suspect, and its contribution to the state system is negligible. The system would be smart to focus on doing the best it can with the two universities and the popular and practical community colleges.

As the Great Recession continues its merciless assault on Nevada, with no end in sight, we have reached the point where partisan strategy must be supplanted by pure survival. That means all options must be on the table, and all parties must participate.

Geoff Schumacher (gschumacher@reviewjournal.com) is the Review-Journal’s director of community publications. His daughter attends the University of Nevada, Reno. His column appears Friday.