Editorial: File suit to uphold two-thirds vote requirement for taxes

So, the governor is confident that the extension of the modified business tax rate will withstand a legal challenge, according to the Las Vegas newspaper.

“We’ve got legal opinion from LCB (Legislative Counsel Bureau) that, you know, a simple majority is what’s needed,” Gov. Steve Sisolak was quoted as saying this past week. “I’ve been in government for 20 some-odd years, and if you don’t trust your attorneys, you’ve got a problem. So I’m confident that the attorneys gave us a good opinion. We’ll move forward from there.”

Be prepared to move back, governor, by nearly $100 million in your budget for the next two years — the budget that promises 5 percent raises for teachers.

Republicans have promised a legal challenge if the business tax were extended without a two-thirds majority of both houses as prescribed by the Constitution. The tax extension passed the Senate on a party line vote of 13-8, one vote shy of two-thirds.

Voters in 1994 and 1996 amended the Nevada Constitution to state “an affirmative vote of not fewer than two-thirds of the members elected to each House is necessary to pass a bill or joint resolution which creates, generates, or increases any public revenue in any form, including but not limited to taxes, fees, assessments and rates, or changes in the computation bases for taxes, fees, assessments and rates.”

The modified business tax passed in 2015 by a two-thirds vote of lawmakers contained specific language saying the rates would be reduced in 2019 if tax revenues exceeded a certain level, which they have.

But the compliant LCB told the majority Democratic lawmakers and the Democratic governor, “It is the opinion of this office that Nevada’s two-thirds majority requirement does not apply to a bill which extends until a later date or revises or eliminates a future decrease in or future expiration of existing state taxes when that future decrease or expiration is not legally operative and binding yet, because such a bill does not change but maintains the existing computation bases currently in effect for the existing state taxes.”

The bill clearly “generates” revenue that two-thirds of the lawmakers in 2015 said would decrease as of July 1, 2019.

The state Constitution is not something to tamper with. Republicans should take it to court and make the Democrats abide by the rules, even if it means a special session would have to called. In fact, the GOP lawmakers should go directly to the state Supreme Court for an opinion that would be binding, unlike the LCB opinion “that future decrease or expiration is not legally operative and binding yet …”

Asked nearly the same question in 2011, 2013 and 2015, the LCB said a two-thirds vote was necessary. So, governor, when do you trust your attorneys? Now or then?

Republican lawmakers should join forces with those who will be paying the tax — Nevada businesses — and sue at the earliest possible convenience to defend the state Constitution. Randi Thompson, a lobbyist for the National Federation of Independent Business, has told the Las Vegas newspaper the organization is looking at the option of filing suit. Perhaps, the conservative Nevada Policy Research Institute can join the fray. The more the merrier.

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Gov. State Sisolak, right, talks to reporters. (R-J pix)

Your tax rate is whatever your lobbyist can haggle

Pay no attention to the Nevada Constitution. That was written 150 years ago by dead white men who had no concept of what the wheeler-dealer world of 21st century Nevada would be like.

There is no way our lawmakers could possibly live by such suggestions such as: “In all cases enumerated in the preceding section, and in all other cases where a general law can be made applicable, all laws shall be general and of uniform operation throughout the State.”

And there is no way in hell to abide by: “The Legislature shall provide by law for a uniform and equal rate of assessment and taxation …”

It is every man for himself and for every business to cut the best deal it can make.

Thursday evening an Assembly committee approved Assembly Bill 464, which is the governor’s compromise tax plan that sets up a myriad of tax rates for different businesses.

Those who did not get their way are now whining about it — such as Randi Thompson, Nevada state director for the National Federation of Independent Business.

She issued a statement condemning the bill and saying:

“Small business is tired of paying more in taxes so the Legislature can give special tax favors to companies that are its flavors of the month.

“The same day the Ways and Means Committee passed AB464, the Assembly approved SB170 to give data centers more tax breaks if they hire just 10 Nevadans. This is in addition to the over $1 billion dollars in tax breaks the Legislature approved for Tesla to create just 6,500 jobs over the next 10 years. In 2012 alone, small businesses created an amazing 15,168 jobs for Nevadans—without asking for any tax abatements or credits.
“I am deeply disappointed with the passage of AB464 that not only increases the business license fee and the payroll tax, but also creates a new tax on general businesses in Nevada. At a time when Nevada is trying to diversify and grow its lagging economy by attracting non-gaming businesses, the Legislature is seriously considering creating a new tax on non-gaming businesses. This tax policy seems to be at total odds with our state’s economic development policy and will only serve to discourage businesses from locating and expanding in Nevada.”
Picky, picky, picky.
Or is it?
Now, I hate to get Washington involved in such things or anything else for that matter, but there is the Commerce Clause, which is supposed to allow federal jurisdiction over interstate commerce. You know, prohibiting one state from placing a tariff on goods coming in from another state, creating unfair advantages for in-state goods.
Creating differing tax rates for battery makers and data centers from all other businesses is little different from a tariff, isn’t it? Never mind creating different tax rates intrastate in violation of our own state Constitution. Never mind that the voters just turned down a gross receipts tax, which is part of the governor’s tax plan.
If all else fails, read the instruction manual.

Tesla batter plant under construction near Sparks. (Reuters photo)