Newspaper column: Sisolak budget would ‘tax’ state economy

Gov. Steve Sisolak calls for more spending. (KUNR pix)

A tax by any other name is still a tax.

In his State of the State speech this past week newly minted Democratic Gov. Steve Sisolak promised to spend more money without any new taxes. He emphasized this by repeating, “Let me say that again. This balanced budget ​does not contain any new taxes​.”

Depends on how you define “tax” and “new tax.”

One definition of tax is: a burdensome charge, obligation, duty or demand. Sisolak’s proposed budget is packed with those.

One of the more burdensome proposals the governor proffered was to raise the minimum wage. “It’s impossible for an individual, let alone a family, to live on $7.25 an hour,” Sisolak declared, paying no heed to the fact almost no one “lives” on minimum wage. Fewer than 3 percent of workers are paid the minimum wage and most of them are under age 25 and working part-time. Most are supplementing family income rather than being self-supporting.

Sisolak did not say how high he wants the minimum wage raised, but on the campaign trail he had mentioned $10 an hour but did not seem averse to the more commonly mentioned $15 an hour.

Raising the minimum wage in some cities has resulted in marginally profitable businesses closing, some workers being laid off, others having hours cut and costs to customers increased. One study found the average low-wage worker in Seattle lost $125 a month because the minimum wage was raised to $15 an hour.

In another blow to the bottom line, Sisolak proposed resurrecting a 2017 bill that would have reimposed the requirement that all construction workers on public projects be paid what is called a prevailing wage. In 2015 lawmakers exempted school construction.

“This session I will work to return prevailing wage to public construction projects — as it was before the 2015 session — including, and most importantly, for our children’s schools,” Sisolak said. “Not only do prevailing wage laws support highly skilled workers in Nevada, they guarantee our children are learning in well-constructed, high quality educational facilities. Let’s do this.”

Gov. Brian Sandoval vetoed the 2017 bill saying it would make school construction more costly. Prevailing wage laws require that workers on public construction jobs be paid no less than the “prevailing” wage in the area where the work is being done. The wage rate is set by the state Labor Commissioner based on a survey of contractors. The survey is so time consuming that in reality only union shops bother to comply, meaning the prevailing wage is the highest union wage.

It is estimated this law requires the state, cities, counties, school districts and other government entities to pay 45 percent higher wages for public construction projects than necessary — a cost to taxpayers of $1 billion a year.

Additionally, Sisolak proposes to give 3 percent salary hikes to all state workers and teachers, plus 2 percent merit raises each year for teachers. In the past 99.75 percent of state teachers have been rated highly effective or effective. Those raises will also require higher contributions for pensions.

The governor also proposes changing the school funding formula. “I also look forward to working with Legislative leadership to review the decades old Nevada Plan to ensure that tax dollars for education follow the student,” he said. “We have to make sure our statewide funding formula is equitable for every student in every county.”

The school funding formula is weighted to take into account the transportation costs in each county, as well as the relative wealth in each county. Thus, poorer rural counties get more money per pupil. Any formula adjustments doubtlessly would mean taking money from rural counties and giving it to Clark County.

As for no “new taxes,” Sisolak is calling for reversing the scheduled reduction of two current taxes — the payroll tax and a vehicle registration tax.

He further calls for increasing the percent of renewable power generation in Nevada to 50 percent by 2030. Study after study has found such market manipulation increases power rates and cost jobs, while not decreasing greenhouse gas emissions and creating eyesores on rural lands.

All of these are likely to be warmly embraced by the Democratic majorities in the state Senate and Assembly.

Sisolak’s total state budget, not the general fund, for the next two years is nearly a 12 percent increase over the past two years, though inflation has been less than 2.5 percent.

Is there anyone out there who might deign to suggest letting the taxpayers keep a little of their money?

A version of this column appeared this week in many of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.