Gov. Brian Sandoval has been crying about a paper cut as though it were an amputation.
Ever since Attorney General Adam Laxalt stated that he would run for governor next year and one of his platform positions would be the repeal of the 2015 commerce tax, Sandoval has been lobbying brickbats, even though Laxalt suspended his campaign announcement just hours after the Mandalay Bay shooting massacre that left 58 dead and about 500 injured at an outdoor country music concert.
“Anyone supporting a repeal of the Commerce Tax must explain to Nevada’s children, families and businesses which education initiatives will be cut if it is eliminated,” Sandoval wailed in a statement reported by the website Nevada Independent. “Will they cut gifted and talented programs, end all-day kindergarten, eliminate special education resources, decrease literacy programs that help students read by third grade, cut autism funding, stop career and technical education, and get rid of technology in schools grants? Any discussion of eliminating this revenue source must include answers about where in the budget they will cut.”
The commerce tax is a tax on gross receipts on all businesses grossing more than $4 million a year. It has different tax tables for 27 different industries — ranging from a low of 0.056 percent for mining to a high of 0.362 percent for rail transportation — and there are 67 different tax brackets. It is costing businesses untold millions to comply with all the paperwork needed to enforce and collect the tax and the state must spend millions to enforce tax compliance.
Lawmakers passed the commerce tax at Sandoval’s urging as part of his $1.5 billion tax increase, even though the voters in November 2014 rejected a commerce tax at the ballot box by 79 percent to 21 percent.
In May the Economic Forum, which is tasked with estimating state general fund revenues so lawmakers can dodge blame for overestimating, found the state would rake in $140 million more than anticipated this year. The commerce tax raised a mere $190 million, meaning that with just a $50 million nip and tuck in the budget the tax could be eliminated and the budget balanced.
It should be further noted that the general fund budget grew 12.3 percent over the previous two years, while inflation amounted to 2.5 percent. Since 2011 the state general fund budget has grown by 32.3 percent, while inflation amounted to 7.9 percent.
Sandoval, who is term-limited and may not seek re-election, continued his tirade at a meeting in Las Vegas this past week where he told reporters, “I think if somebody’s going to make a proposal like that, they’ve got to stand in a schoolroom with a room full of parents and teachers and be able to explain who they’re going to cut.”
He asked rhetorically whether the cuts would be special education, gifted and talented, technology or something else.
Apparently, no one pointed out to him that Nevada has increased K-12 public school funding by 80 percent per pupil, adjusted for inflation, over the past four decades, during which student test scores have actually fallen slightly.
Might other things besides education be trimmed? Might the growth in overall state spending ever be curbed?
Didn’t lawmakers just agree to spend $750 million in tax money to build a domed football stadium? Hasn’t the state doled out $1.7 billion in tax credits to Tesla, Amazon, Switch and other billion-dollar companies?
If Sandoval is so concerned about priorities, he could look at the total budget. — TM
