Hello? Anybody home? >> Nevada Policy Research Institute

Hello? Anybody home?

What happened to the Nevada Vision Stakeholder Group?

By Geoffrey Lawrence

Thursday, July 15, 2010

For months, lawmakers, political candidates and the public have awaited the first report of the Nevada Vision Stakeholder Group and the firm hired by select legislators for an associated tax study.

However, the report — contractually due July 1 — is nowhere to be found.

Lawmakers on the Interim Finance Committee defied a gubernatorial veto of state funding to dip into a legislative slush fund for up to $500,000 to purchase a study suggesting ways to wring more money out of Nevadans.

Moody's Analytics was eventually hired as a consultant to perform the study at a cost of $253,000. The firm was also to act as facilitator for Stakeholder Group meetings as they developed collective "quality-of-life goals" that — through substantial increases in the state tax burden — all Nevadans would be forced to support under penalty of law. Moody's was instructed to then incorporate the additional cost of these goals into a report recommending new taxes to the 2011 legislature.

Current leadership in the Nevada Legislature had, of course, specifically engineered exactly this result. Wanting new taxes in 2011 — while attempting to distance themselves from the stink — they pushed Senate Concurrent Resolution 37 through the 2009 session, creating the NVSG and associated tax study.

In an old and now threadbare ruse, legislative politicians hoped to hide behind an unelected panel they had directed to call for higher taxes. As the Nevada Policy Research Institute pointed out months ago, these disingenuous pols wanted to claim that because all relevant "stakeholders" had reached consensus on the need for new taxes, the pols — by once again breaking state tax-hike records — would merely be serving the public's desire.

Of course, real motives became all too clear when virtually all the "stakeholders" selected by the IFC turned out to represent the five major areas of state government spending. Nearly all were public employees, their union representatives or advocates for organizations that receive tax dollars. Stakeholder Group composition only further confirmed that the group's real purpose is simply to provide political cover for tax increases, as IFC lawmakers know tax-consumers will reliably plead for higher taxes.

Predictably, political candidates are already hiding behind the not-yet-delivered NVSG/Moody's recommendations for higher taxes in order to avoid revealing their own stance on the higher-taxes issue. Most notably, gubernatorial candidate Rory Reid has said he is waiting on those recommendations before taking a position.

Now, in an interesting twist, the initial report by Moody's has been delayed indefinitely. Legislative staffers say the contract — which set July 1, 2010 for the initial report's delivery — is being amended to reflect this delay. However, they are mum on any new timetable, while news reports say the report's publication may be delayed until after the November elections. Clearly that would mean higher-tax proponents don't want to level with Nevada voters.

Moody's ham-handed performance so far is probably another factor in the delay. In early May, the firm released a draft Executive Summary that incorrectly identified Nevada as a low-tax state, while proposing to "stabilize government program funding levels by diversifying the tax base." The draft's blatant mischaracterizations and dubious spending goals produced immediate criticism and a public retreat by Stakeholder Group members. At what had been scheduled to be the final Stakeholder Group meeting, members distanced themselves from the summary and called for an entirely new report.

Thus the recent silence of the NVSG and the legislature's paid consultant speaks quite loudly. No new meetings have been scheduled. No report is imminent. Yet the curtains have gone up and only the IFC puppet masters, led by Senate Majority Leader Steven Horsford, are left standing, there behind the Stakeholder set — exposed.

So lawmakers, rather than waving a phony report to justify record-breaking tax increases, should now debate true fiscal reforms that would rein in the state's destructive tax-and-spend cycles. NPRI's recent "One Sound State, Once Again" study suggests an alternative approach that is far superior: sound, revenue-neutral fiscal reforms that would safeguard Nevada taxpayers for decades to come.

That study's ideas have been praised in a recent analysis from the Tax Foundation and on the editorial pages of the Las Vegas Review-Journal and the Las Vegas Sun. Given the credibility of the "One Sound State" proposal and the collapse of the IFC's NVSG/Moody's scheme, it's long past time for all candidates to defend their positions on higher taxes in the open, before voters.

After all, isn't that what constitutional democracy is all about?

Geoffrey Lawrence is a fiscal policy analyst at the Nevada Policy Research Institute. For more visit http://npri.org/.

Tags: Fiscal, Budget, Taxes