Grover Norquist Loses Nevada


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Bucking his repeated "no new taxes" pledge, Republican Governor Brian Sandoval worked with Republicans and Democrats alike in Nevada to pass a $6.2 billion budget deal,  including the extension of $620 million in temporary tax hikes.

Sandoval is part of a growing trend of state leaders forced to renege on "no new taxes" pledges after hitting the brick wall of fiscal reality.  Lawmakers in other states have been similarly forced to reconsider irresponsible no new tax pledges after taking a more sober look at their state’s fiscal conditions.

What brought Sandoval back to reality was a Nevada Supreme Court decision, which ruled that the state government could not siphon off $62 million in funding from the southern Nevada sewer district. The ruling, which Sandoval called a “game changer,” created a new budget hole of about $656 million, since the budget counted on hundreds of millions of dollars from similar unconstitutional revenue grabs from local governments. This revenue hole could not be responsibly filled without the tax extensions. Nevada is actually one of many states where courts have played a critical role in upending the budget debate.

Sandoval's reversal represents a big loss for movement conservatives in Nevada, who lost their chance to dramatically cut Nevada’s services while making the governor they opposed look reasonable by comparison.

Unfortunately, even with the additional revenue, the final deal still included significant cuts such as the elimination of a $5.7 million property tax rebate program for low-income seniors.  In addition, the deal regrettably did not include the comprehensive sales tax reform proposal pushed by Democratic lawmakers.

On the plus side, Nevada’s legislative session also included two modest breakthroughs in the effort to increase the level of scrutiny and taxation of the state’s extraction industries. Despite the powerful influence of mining in the state, both houses of the Nevada legislature repealed constitutional provisions limiting taxes on mines to 5 percent of the net proceeds of minerals and raised $24 million in additional revenue by having the mining companies give up health care tax deductions.

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