Nevada Political Consultant Warns Against Setting Tax Policy At The Ballot Box

CARSON CITY – Long-time political consultant and former state lawmaker Pete Ernaut said today that efforts to use the ballot box to set tax policy could handcuff the ability of the governor and Legislature to make critical decisions on the future of the state.

“It should be warning to everybody because this is something that could very rapidly turn into the next iteration of the California ballot, where we have 10, 12, 13 ballot measures on a number of issues and you wake up one day and really you’ve taken the power away from the Legislature or the governor to make any decisions,” he said.

Political consultant Pete Ernaut.

“And that’s really what they’re struggling with in California more than anything else is you have this entire apparatus in the California state Legislature that essentially has the ability to make decisions on about 5 percent or 6 percent of the entire California budget,” Ernaut said in an interview on the Nevada NewsMakers television show. “If we’re not careful, that’s the way that it will go.”

Ernaut’s comments were in response to a question about the possibility of several tax proposals qualifying for the state ballot in the next few election cycles. Ernaut is president of government and public affairs with R&R Partners.

Las Vegas businessman Monte Miller is pursing two initiative petitions, one to raise the gaming tax rate on the state’s largest casinos, and another to amend the state constitution to permit the tax rate on the mining industry to be increased.

Miller said he is pursing the tax proposals to ensure there are some options on the table for policy makers if state labor and education leaders move forward with a Texas-style margin tax on business to increase funding for education. No such petition has been filed yet with the Nevada Secretary of State’s office.

Ernaut acknowledged that there is an undercurrent of frustration regarding Nevada’s current tax policy, with gaming and mining questioning the fairness and balance of the system, and some in the business community in turn concerned they are being pressured by the gaming and mining industries.

Nevada’s improving economy could help defuse the intensity of the tax debate and allow for a more measured, methodical and thoughtful discussion of what the state’s tax structure should look like down the road, “rather than with a pistol to somebody’s forehead, which is what it seems like it’s been,” he said.

Gov. Brian Sandoval also spoke out recently in opposition to the tax-related ballot measures, saying those discussions belong in the Legislature.

“I believe initiative petitions are a poor way to set tax policy,” Sandoval said.

But Danny Thompson, executive secretary-treasurer of the Nevada State AFL-CIO, who first mentioned the possibility of a business tax ballot proposal in November 2011, said at the time it is the Legislature’s inability to make tax decisions that has generated the interest in going directly to the voters instead.

Nevada has a two-thirds vote requirement in the Legislature to increase taxes or fees.

“We are looking seriously at this process because the legislative process is an impossible one,” he said. “With the two-thirds requirement in the constitution, what in effect that does – it has the minority control the majority wishes. You cannot solve the problem at the Legislature alone without some help from the people.”

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Audio clips:

Long-time political consultant Pete Ernaut warns against setting tax policy at the ballot box:

022712Ernaut1 :23 make any decisions.”

Ernaut says the California Legislature is handcuffed because of the numerous ballot measures approved by voters:

022712Ernaut2 :15 it will go.”

Ernaut says an improving Nevada economy could help lower the intensity level of the tax policy debate:

022712Ernaut3 :19 like it’s been.”