Does Nevada Need A Tax Increase
By: Doug Busselman, Executive Vice President
In less than a week, Nevada Governor Jim Gibbons will present his state-of-of-the-state address. Expectations going into that speech are that there will be recognition of the significant challenges facing Nevada, but he will stop short of proposing tax increases to cover the levels of spending that some would like to see being spent.
Based on the criticism that Governor Gibbons has already faced on his stance of “No New Taxes”, we’re anticipating the war-whoops and tax tom-toms to continue to sound (see this example) www.lasvegassun.com/news/2009/jan/09/teacher-salaries-gibbons-cross-hairs with a very likely outcome of the legislative branch passing a budget that is much higher than the Governor will propose and the taxes to go along with the increased spending.
The legislative process is determined by a very simple process…if there are more green buttons pushed when lawmakers vote – the proposal is passed. Red lights might mean “No”, but if there aren’t more red lights than green lights – the proposal being voted on advances.
Granted, for tax or fee measures the number of green lights have to total 28 in the Nevada Assembly (2/3 majority) and 14 in the Nevada Senate. In the event that Governor Gibbons determines that using his veto pen is an appropriate action, the same number (2/3 majority) of votes will over-ride the Governor’s veto.
One party (often considered to be the group most likely to favor tax increases to meet higher levels of spending from Nevada’s checkbook) has control of the state’s Assembly. The same party holds the majority in the Nevada Senate, although not with enough votes to deal with the 2/3 vote requirements.
Although party-line votes are not uncommon when it comes to tax increases and budget authorizations, it should not be assumed that members of the minority party of either the Nevada Senate or Assembly wouldn’t also be pressing green buttons in favor of a tax increase. Likewise, it might be possible that a member of the majority party (at least in the Senate) might press the red button to vote against a tax increase. (Frankly, we don’t believe that there would be any members of the majority party, in the Nevada Assembly, pressing a button that was a different color than their leadership would have them press.)
This brings us to the bottom-line that the 2009 Nevada Legislature can and probably will pass tax hikes, fee increases and possibly install new taxes that currently don’t exist. They will do so because they can and they are very much of the opinion that such an action is the correct course to take.
Does Nevada Need A Tax Increase?
We don’t believe that a tax increase is necessary. We believe that increases in taxes will only fund more state spending, which is not needed either.
Although we understand the reality of what will play itself out over the next few months, that isn’t to say that we will be sitting quietly, watching without comment, the people pressing the buttons in the Nevada Legislative Building. Those who wish to increase spending to fund whatever program or project that they believe necessary, should be held accountable for the choice they make. Equally, those who vote to not increase spending should be held responsible as well…whatever your perspective might be in regard to the spending increase.
We’ve attempted and will continue to try and present the information that we come across which shows that our state’s budget “crisis” is actually not an end-of-the-world situation. Based on what we’re seeing, it’s actually just a leveling off of revenue (not even a decline).
The problem is that the revenue coming in wasn’t what the legislators who approved the last biennium budget wanted to spend -- and the legislators who will be coming to Carson City after February 2nd want to spend more than what wasn’t available to spend in the current budget.
In less than a week, Nevada Governor Jim Gibbons will present his state-of-of-the-state address. Expectations going into that speech are that there will be recognition of the significant challenges facing Nevada, but he will stop short of proposing tax increases to cover the levels of spending that some would like to see being spent.
Based on the criticism that Governor Gibbons has already faced on his stance of “No New Taxes”, we’re anticipating the war-whoops and tax tom-toms to continue to sound (see this example) www.lasvegassun.com/news/2009/jan/09/teacher-salaries-gibbons-cross-hairs with a very likely outcome of the legislative branch passing a budget that is much higher than the Governor will propose and the taxes to go along with the increased spending.
The legislative process is determined by a very simple process…if there are more green buttons pushed when lawmakers vote – the proposal is passed. Red lights might mean “No”, but if there aren’t more red lights than green lights – the proposal being voted on advances.
Granted, for tax or fee measures the number of green lights have to total 28 in the Nevada Assembly (2/3 majority) and 14 in the Nevada Senate. In the event that Governor Gibbons determines that using his veto pen is an appropriate action, the same number (2/3 majority) of votes will over-ride the Governor’s veto.
One party (often considered to be the group most likely to favor tax increases to meet higher levels of spending from Nevada’s checkbook) has control of the state’s Assembly. The same party holds the majority in the Nevada Senate, although not with enough votes to deal with the 2/3 vote requirements.
Although party-line votes are not uncommon when it comes to tax increases and budget authorizations, it should not be assumed that members of the minority party of either the Nevada Senate or Assembly wouldn’t also be pressing green buttons in favor of a tax increase. Likewise, it might be possible that a member of the majority party (at least in the Senate) might press the red button to vote against a tax increase. (Frankly, we don’t believe that there would be any members of the majority party, in the Nevada Assembly, pressing a button that was a different color than their leadership would have them press.)
This brings us to the bottom-line that the 2009 Nevada Legislature can and probably will pass tax hikes, fee increases and possibly install new taxes that currently don’t exist. They will do so because they can and they are very much of the opinion that such an action is the correct course to take.
Does Nevada Need A Tax Increase?
We don’t believe that a tax increase is necessary. We believe that increases in taxes will only fund more state spending, which is not needed either.
Although we understand the reality of what will play itself out over the next few months, that isn’t to say that we will be sitting quietly, watching without comment, the people pressing the buttons in the Nevada Legislative Building. Those who wish to increase spending to fund whatever program or project that they believe necessary, should be held accountable for the choice they make. Equally, those who vote to not increase spending should be held responsible as well…whatever your perspective might be in regard to the spending increase.
We’ve attempted and will continue to try and present the information that we come across which shows that our state’s budget “crisis” is actually not an end-of-the-world situation. Based on what we’re seeing, it’s actually just a leveling off of revenue (not even a decline).
The problem is that the revenue coming in wasn’t what the legislators who approved the last biennium budget wanted to spend -- and the legislators who will be coming to Carson City after February 2nd want to spend more than what wasn’t available to spend in the current budget.
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