The Cato Institute today handed out report cards to the governors of all 50 states. Five earned an A. Only 10 warranted an F on their fiscal policies.
Guess what grade Nevada’s Brian Sandoval earned?
The grading is based on seven variables, including two spending variables, one revenue variable, and four tax-rate variables.
Ding. Ding. Ding. Right you are, sports fans.
Sandoval got an F.
This is the Republican governor who came into office promising no new taxes and then pushed the highest tax hike in history. This is the governor who has handed tax breaks to Apple, Tesla and Faraday Future. This is the governor who is calling the Legislature into session on Monday to hike Las Vegas room taxes by 1.5 percentage points to build a stadium and expand a convention center, but refuses to consider funding education savings accounts, even though Democrats might win a majority in either the Senate or Assembly in November and thus doom the program for years to come.
Here is what the report has to say about Nevada’s Republican governor:
Brian Sandoval came into office promising no tax increases. But Governor Sandoval made a U-turn in 2015 and signed into law the largest package of tax increases in Nevada’s history at more than $600 million per year. The package included a $1 per pack cigarette tax increase, extension of a prior sales tax hike, an increase in business license fees, a new excise tax on transportation companies, and an increase in the rate of Nevada’s existing business tax, the Modified Business Tax (MBT).
However, the worst part of the package was the imposition of a whole new business tax in Nevada, the Commerce Tax. This tax is imposed on the gross receipts of all Nevada businesses that have revenues of more than $4 million a year. The new tax has numerous deductions and 27 different rates based on the industry, and it interacts with the MBT.
The Commerce Tax is complex, distortionary, and hidden from the general public. As a gross receipts tax, it will hit economic output across industries unevenly, and it will likely spur more lobbying as industries complain that their tax burdens are higher than other industries. Imposing the tax was a major policy blunder.
The Commerce Tax was imposed to increase funding for education. But Sandoval and the legislature had been directly rebuked by the public in 2014 for their effort to impose a new tax for education. In a November 2014 ballot, Nevada voters overwhelming rejected by a 79–21 margin the adoption of a new franchise tax to fund education.
Meanwhile, in recent years Sandoval and the legislature have been handing out narrow tax breaks to electric car companies, data centers, and other favored businesses. In 2014, for example, Sandoval approved a deal to provide $1.25 billion in special tax breaks and subsidies over 20 years to car firm Tesla. So Nevada’s tax policy entails large increases for all businesses, but narrow breaks for the lucky few.
This November, Nevada voters will weigh in on a ballot question, Question 2, to legalize recreational marijuana and impose the state sales tax and a 15 percent excise tax on the product. Governor Sandoval opposes legalization.
Sandoval actually ranked fourth worse in the nation.