June 25, 2019
25 Jun 2019

Political Update – June 25, 2019

Nevada Embraces Public Unions

Democrats let state employees collectively bargain. Watch out for a state income tax.

The Editorial Board
The Wall Street Journal

June 20, 2019

Nevada taxpayers had a good 54-year run, but this month their luck ran out. The state Legislature recently overrode a 1965 ban on collectively bargaining for state employees. Gov. Steve Sisolak has signed the bill, and watch now for a tax-and-spend ratchet to accelerate in one of the nine states without a tax on wage and salary income.

The legislation means the state’s 20,000 or so public employees can be represented by a union to negotiate wages, pensions and work rules. The law is a huge payoff for the unions that supported Mr. Sisolak and the Democratic legislative majorities that swept to power in November.

In effect the unions will now be on both sides of the negotiating table as they demand more money from the Governor they helped elect. Taxpayers won’t be represented because Mr. Sisolak will want to reward his union benefactors. This is why public unions differ from industrial unions that negotiate with a single private employer, and why Franklin Roosevelt opposed unions for public workers.

Nevada Democrats claim the law includes checks on wage and benefit increases. If Mr. Sisolak doesn’t like the result of negotiations, he can include “any amount of money that the Governor deems appropriate” in his proposed budget. A collective-bargaining agreement must also include a clause stipulating that “any provision” that “requires the Legislature to appropriate money is effective only to the extent of the legislative appropriation.”

But in practice this merely means that Democrats in the Legislature will have to be involved in the bargaining. And their incentive is to reward the unions too. Labor negotiations are exempt from the state’s open-meeting requirements, so the deal will emerge from the backrooms as a fait accompli.

This is the way it always works. Illinois and Connecticut are classic examples as public unions effectively run the state governments. In both states unfunded pension liabilities are more than 45% of the gross state product, according to the American Legislative Exchange Council. Illinois Democrats are now trying to kill the state’s constitutional flat income-tax rate, and Connecticut is raising taxes again, as taxpayers flee to lower-tax climes.

The Las Vegas Metro Chamber of Commerce estimates that Nevada can expect to spend an additional $1.7 billion to $1.75 billion annually by 2036. That comes to $579 to $596 per resident a year. Mr. Sisolak won’t admit it, but in signing this bill he has started the clock ticking on the date that unions and Democrats lobby to impose a state income tax.

Quote of
the week

 


Quote:

“In effect the unions will now be on both sides of the negotiating table as they demand more money from the Governor they helped elect. Taxpayers won’t be represented because Mr. Sisolak will want to reward his union benefactors.”

The Wall Street Journal

EDITORIAL:
Let Nevada taxpayers in
on collective bargaining talks

Las Vegas Review-Journal 

June 23, 2019

The legacy legislation that emerged from the 2019 session will be the bill allowing state workers to collectively bargain.

Long sought by Nevada’s public employee unions, the concept nevertheless languished for decades — even under previous Democratic governors, who feared the inevitable budget ramifications. But government lobbyists had their way in Carson City this year after labor helped Democrats gain large majorities in both legislative houses last November. On June 12, Democratic Gov. Steve Sisolak signed Senate Bill 135, giving state workers the right to bargain for wages and benefits.

The bill includes a provision allowing the governor to ignore any deal for financial reasons. That’s a tacit admission that allowing collective bargaining for government workers is a recipe for fiscal disaster, laying the groundwork for ever-escalating compensation costs and spiraling budgets, crowding other spending. Just ask Illinois … or Connecticut … or New York … or any progressive jurisdiction. But even that limiting codicil will have minimal effect. Abiding by the results of any negotiation will become a litmus test that will determine the political fate of legislative Democrats and gubernatorial candidates. 

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

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June 18, 2019
18 Jun 2019

Political Update – June 18, 2019

FILE SUIT TO UPHOLD TWO-THIRDS VOTE REQUIREMENT FOR TAXES

Thomas Mitchell
Mesquite Local News

June 13, 2019

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

“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. —TM

*NEW*

Quote of
the week

 


Quote:

“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.”

Thomas Mitchell
Mesquite Local News

EDITORIAL: Raising the sales tax for schools or the Culinary union?

Las Vegas Review-Journal 

June 10, 2019

Confusion, maneuvering and chicanery traditionally mark the conclusion of each biennial legislative session in Carson City. This year was no exception as lawmakers adjourned last week. Consider the hijacking of Assembly Bill 309.

Self-described public education and social justice advocates lauded the passage of AB309 because it authorizes the Clark County Commission to increase the sales tax by 0.25 of a percentage point to raise more money for schools and homelessness. The law allows the tax hike — which could generate $108 million a year — to be imposed through either a two-thirds vote of the commission itself or via a ballot measure put to Southern Nevada voters.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

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June 11, 2019
11 Jun 2019

Political Update – June 11, 2019

EDITORIAL: Nevada Republicans should sue over illegal tax increase

Las Vegas Review-Journal

June 6, 2019

The state constitution won’t defend itself. That’s why Senate Republicans must go to court to challenge efforts by legislative Democrats to brazenly ignore the voter-imposed supermajority requirement for tax hikes.

On Monday, Democrats approved Senate Bill 551, an extension of the current Modified Business Tax rate. It was scheduled to decrease as a result of higher-than-anticipated revenues from the Commerce Tax. But despite a record tax take, Gov. Steve Sisolak’s budget proposal sought to kill the sunset.

The Nevada Constitution requires that any bill which “creates, generates or increases any public revenue in any form,” receive a two-thirds vote in both legislative houses. A bill that nixes the proposed tax reduction clearly “generates” revenue. That’s the whole point, after all.

Democrats have a supermajority in the Assembly, but are one vote shy in the Senate. So the majority leadership sought cover from the pliable attorneys at the Legislative Counsel Bureau, which provides legal advice to lawmakers. The LCB obliged with a nonbinding opinion declaring that extending a levy’s existing rate doesn’t trigger the two-thirds requirement. Democrats took that as a green light to approve the tax increase in the Senate by a simple majority.

It’s worth noting that the LCB reached the opposite conclusion in 2011, 2013 and 2015 regarding similar bills.

The LCB’s flip-flop was the result of political pressure rather than lucid legal reasoning. Democrats have long chafed at the two-thirds restraint, which Nevada voters twice approved overwhelmingly during the 1990s. The state’s political elite has sought to avoid or erode the mandate for decades.

*NEW*

Quote of
the week

 


Quote:

“The alternative is to allow the LCB and legislative Democrats to flout the constitution and the will of voters by declaring for sheer political convenience that the plain English of the two-thirds requirement doesn’t mean what it says.”

Las Vegas Review-Journal

EDITORIAL: Nevada Democrats show themselves to be the party of the public sector

Las Vegas Review-Journal 

June 8, 2019

Wall Street Journal columnist Daniel Henninger has spent years chronicling how the Democrats have devolved into the “party of the state and the public sector” through the ascension of powerful government unions, “whose lifeblood is tax revenue.”

His observations might neatly describe the recently concluded 2019 session of the Nevada Legislature.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

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June 4, 2019
04 Jun 2019

Political Update – June 4, 2019

 

Payroll tax extension tied to teacher raises passes Senate, but lack of Republican support could trigger lawsuit 

Megan Messerly, Riley Snyder, Michelle Rindels
The Nevada Independent

June 3, 2019

Democratic lawmakers passed a bill Monday afternoon to remove a scheduled decrease in the state’s payroll tax rate, allocate the additional money it will generate toward education and formally kill a controversial quasi-voucher program in a final stab to Republican lawmakers who refused to get on board with extending the tax rate.

The dramatic defeat and resurrection of SB551 in different forms came after an hour and a half of floor debate on the last day of the legislative session and amid failed efforts by Democratic lawmakers to attract at least one Republican to support an extension in the state’s Modified Business Tax rate. The extension would raise roughly $98 million over the biennium and be directed toward school safety initiatives, teacher raises and the Opportunity Scholarship program.

After an initial vote failed with all eight Republican senators opposed, Democratic lawmakers adopted another amendment removing a requirement that it pass with support from two-thirds of lawmakers in support and adding language that would take the Education Savings Accounts program off the book. ESAs were created in 2015 but have been unfunded since a 2017 state Supreme Court decision found the funding mechanism unconstitutional.

The last-minute legislative maneuverings means lawmakers are likely to remove a scheduled decrease in the Modified Business Tax, which is assessed on payroll, and allocate $16.7 million in revenue to school safety initiatives, $72 million to teacher pay raises and $9.5 million to Opportunity Scholarships — a private school scholarship for low-income families funded through tax credits given in return for donations to scholarship organizations.

*NEW*

Quote of
the week

 


Quote:

“Governor signs it, we’ll be in court.”

Senate Minority Leader James Settelmeyer said regarding passage of Senate Bill 551 without 2/3 majority

The Latest: Lawmakers Extend Tax for Schools, Teacher Pay

Associated Press
U.S. News & World Report 

June 4, 2019

Senate Democrats have passed a bill extending a payroll tax by removing a requirement that mandates a two-thirds vote to pass.

The measure has shaped up to be one of the largest political fights in the last day of the 2019 legislative session. Republicans issued strong objections to extending the payroll tax, which Democrats say will put $72 million toward teacher pay raises and an extra $16.7 million to school safety efforts.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

To ensure that you continue receiving email updates,

please add Info@KeystoneNevada.com to your address book or safe list.
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