1. What the fuss is all about

This is a case history of how the powers-that-be circumvent inconvenient obstacles such as a state constitutional limit on taxes or a state constitutional requirement that only the legislature case raise taxes and tax rates. The specific example is Nevada Assembly Bill 46 introduced in the recently closed 77th session, passed by both houses of the legislature (2:1 Democrat) and signed by the governor (Republican).

The bill’s text and legislative history can be found on NELIS – Bill: AB46.

The official Legislative Counsel’s digest reads as follows (don’t let it put you to sleep):

The board of trustees of each school district is required to establish a fund for capital projects. (NRS 387.328) Sections 2 and 10 of this bill authorize the board of county commissioners of each county whose population is 100,000 or more but less than 700,000 (currently only Washoe County) to impose, by a two-thirds vote, additional taxes for deposit in the county school district’s fund for capital projects. In particular, section 2 authorizes the imposition in the county of a new sales and use tax at the rate of one-quarter of 1 percent of the gross receipts of retailers and section 10 authorizes the imposition in the county of a new property tax at the rate of 5 cents on each $100 of assessed valuation. Sections 2-8 of this bill require the administration of any new sales and use tax in the same manner as the sales and use tax imposed by the Local School Support Tax Law, as set forth in chapter 374 of NRS. Existing law generally limits the total amount of property taxes which may be imposed to $3.64 on each $100 of assessed valuation. (NRS 361.453) Sections 9 and 10 of this bill exempt the new property tax authorized by section 10 from this limitation. Existing law provides a partial abatement of the property taxes levied on property for which an assessed valuation has previously been established, a remainder parcel of real property, certain single-family residences and certain residential rental dwellings. (NRS 361.4722, 361.4723, 361.4724) Section 9.5 of this bill exempts the new property tax authorized by section 10 of this bill from those partial tax abatements. Section 11 of this bill authorizes the school district in each county where these new taxes are imposed to pledge the proceeds of these taxes, and the portion of the governmental services tax whose allocation to the school district is based on the amount of the property tax levy attributable to its debt service, to the payment of any bonds or other obligations the school district issues for capital projects.

In short, what this means is that the legislature had delegated its power to raise taxes to a county board of supervisors and the local school board, without even a requirement that the people approve the tax hikes by popular vote. The political establishment, both Democrat and RINO, cited the county’s crumbling infrastructure, and a rare and quite laughable claim to “home rule,” as justifications for their support. Needless to say, while this bill is specific to one county, all the others, especially Las Vegas, are salivating at the prospect of similar treatment in the legislature. We Nevadans are lucky that the legislature meets only once every two years.

2. And here is the rest of the story

Of course, as soon as AB46 was signed into law, the county jumped on it and scheduled public hearings. When the alarm was sounded, I sent the following comments to interested parties.

As a resident of Carson City, I have no say in the affairs of the county to the north of us, but in the short run I can only applaud any action that our neighbors will take to raise taxes and therefore drive more business to Carson City. We sure can use everything we can get, and the new I-580 makes it only a 10-15 minute trip to great shopping and cheaper prices in Carson City. I also know that I will live to regret my short-term schadenfreude, because if this folly is successful in Washoe, it will be tried elsewhere and everywhere. AB46 was still being debated when Clark County (Las Vegas) was already gearing up to copy it.

In the 77th session of the Nevada legislature I was a non-paid lobbyist for a watchdog committee and have seen first hand as the Democrats and RINOs have imitated their counterparts in Congress in ignoring the Constitution and shredding every piece they did not like. In fact, the legislature could and did go further than Congress can, because the legislature can ignore and shred both the state and the federal constitutions as they please. Who could stop them? The governor? AB46 became law because our supposedly “Republican” governor signed it, fully aware that this bill is an unconstitutional transfer of taxing authority from the state to the county.

The justification for AB46 would be comical if it were not so serious. Washoe county has to have this tax because the school and other infrastructure is crumbling. Why, some of the buildings are 30-50 years old….! I don’t know whether to laugh of cry; I went to schools and colleges two to six times that old, in classrooms lacking in heat and never any air conditioning. I guess the good people of Washoe county had never heard of or spent a penny on MAINTENANCE. A building does not “fall into disrepair,” it crumbles out of NEGLECT, at a speed of decay proportional to the laxity of the building codes applied at the time of its construction.

Instead of AB46, the legislature should have provided for the conviction and jailing of county and school officials for non-feasance, misfeasance and malfeasance in office. But no; the same officials who are responsible for letting the county find itself in this condition are the same ones who now will decide they need more money to … to…. to do what? continue as before? And who cares as long as they can raise taxes and raise them some more as they and only they see fit?

I can only hope that the people of Washoe County will rise up and stop this folly, whether by demanding a popular vote on the tax hikes, or by throwing out the bums who impose it, or both. Everybody has a stake in this — shoppers, because of the higher sales tax; property owners, because of the higher property taxes; and renters, again because of the higher property taxes. It is pure irony that one constituency of the Democrat party, the teachers’ and government employees’ unions, are so eager to sock it to the other constituency of the party, the renters and other poor. Ah, politics….

3. Oops, there is more

As a “non-paid” lobbyist I have written extensively to legislators and committees who were conducting hearings on AB46. Here is a partial compendium (in reverse chronological order)

…….

The issue is not “home rule.” The issue is NOT whether a county and its schools need the money; no matter how much you give them, they always want more. The issue is NOT whether they are in this situation because of the general economy or long term neglect or mismanagement of the funds they do have. The issue is, if they can do this in ONE county, they’ll do it in ALL counties — and then it will be the PEOPLE who are victimized by higher taxes on everything. Don’t the poor people count, even to Democrats? Don’t the seniors on fix incomes count, even to Democrats? Voting NO on AB46 should be a no-brainer to BOTH parties.

…….

The good news is, this is GREAT for Carson City. With the new I-580 from Reno, it’s only 10-15 minutes to “drive a little more and save a lot money,” as the radio ads for Carson City Toyota have filled the air for years. We can use the extra business that any tax differential is sending our way.

The bad news is, of course, if Reno gets away with this, the others will also try it sooner or later. As always, of course, “for the children…” You’d think people would get tired of that old saw.

I have gone to school on two continents, three countries and five states, in school buildings from 150 years to 150 days old, some with no heat in winter. Sure it’s nicer to sit in a new modern building. But learning takes place in your head, not in the building. I am not impressed with all the self-interested witnesses (builders, contractors, unions, realtors, etc.) who are obviously looking for economic benefits from all this.

In the hearing on Feb. 19 Mr. Martinez, Mr. Bobzien, Mr. Kieckhefer, Mrs. Smith and others testifying FOR this bill did NOT explain what the managers of the Washoe county school district have done to
1. Set aside money in anticipation of having to replace aged-out equipment, roofs, etc.
2. Reduce other current costs so they can stay within their means and budget for their needs
3. Avert or prepare for this dire crisis. Surely all these problems have not just popped up out of the blue.
4. Otherwise demonstrate reasonable care in managing the monies at their disposal.

It seems to me, before they seek authority to raise taxes (what else is new?) they have to demonstrate that they have used existing revenues wisely. The presentations have NOT done that. Quite the contrary — news and testimony on this and other education and funding bills is consisted in the complaint about serious mismanagement of funds by the WCSD.

I am glad to hear that this bill would authorize a tax hike only in Washoe county, for two reasons:
1. It will drive more business to Carson City, letting us cash in on our lower taxes.
2. The legislature has NO business butting into a supposedly purely local matter. Local school districts already do get state funds, distributed state-wide from the general fund.

Let the PEOPLE of Washoe County VOTE on on this, let THEM decide their own business, rather than have it IMPOSED on them or “enabled” by the state. If indeed all the people and organizations testifying in support of this bill are so sure they are right and they enjoy wide and deep public support, then they should have no problem letting the people vote to tax themselves more. HOWEVER, even at that point I vigorously object to RENTERS voting for a tax hike on property OWNERS, and the owners of investment properties voting for a tax hike on people living on their own home.

The interest from Clark county in this scheme is testimony to the 800 pound gorilla in the room, that this bill is a test case to see if the strategy can be exported to other counties looking for more and more and more money for whatever dire good reason.

And then this will be very bad news even for Carson City.

And as Senator Kieckhefer has admitted in his testimony, this scheme is also a creative way to get around the constitutional 2/3 requirement to approve a hike in a tax rate. As such, this is bill presents a clear and present danger to all property and sales ax payers in Nevada. NO WONDER ALL THOSE ELECTED OFFICIALS ARE ALL FOR THIS BILL.

And then this will be very bad news for the entire state.

This consequence is not mitigated or averted by the amendment to this bill that imposes the 2/3 requirement on the county supervisors, school board or whoever else (but not directly the people) will of course be voting to approve the proposed tax hikes.

Well, I am retired and can look forward only to a diminishing, not an increasing income in the face of rising taxes. I see nothing in this bill that would offer seniors RELIEF from the proposed tax hikes. (Yea, I know, obamacare’s death panels will put us out of our misery; problem solved.) In the meantime, please vote NO on AB46.

…….

We’ve made all the arguments, and the fight continues. The NV constitution is supposed to protect us from capricious tax increases, that’s why the 2/3 requirement. AB46 is a blatant run around that obstacle. So Thank You or Boo-Hiss to all of you; you know how you voted and which one I think you deserve. In the meantime, this monster is going to the Senate. May they have more respect for the people and the constitution than the assembly did. You were warned, and it’s old news — All the counties are just salivating at copying this strategy. None of us is safe.

…….

I am petitioning my minority leader in the assembly to please vote against a bad idea in a bad bill. Once again someone has figured out a way to trash the constitution. True, I am not in your district but as the minority leader you represent all Republicans in the state.

I am petitioning NOT to facilitate a bad idea going forward even on the chance that the people might vote it down, if they have any sense, or to approve it, if they have none. I would certainly not trust urban low information voters to know that they are doing.

Let someone ELSE propose that idea, and even then I expect my minority leader to oppose it on principle. That principle being, government should not bob and weave trying to find some way to increase taxes; government should squirm trying live within its means, as we do.

I was there when people in your audience stood up decrying the waste in the Washoe County School District. I would expect the WCSD to fall all over themselves to prove to you, their representative, that they are doing everything to remedy their situation, and that their efforts would be documented in exhibits and verified by independent experts on the subject. I have difficulty accepting what I have seen so far as anything close to that. Pleading, yes. Anything serious, no. Just throw more money down the same bottomless pit.

My concern is that this bad idea will spread to other counties — like mine, in Carson City.

…….

You are necessarily representing the interests of your district, and I cannot fault you for that. But… Sorry to say, I am not, I can not be with you on this one.

First of all, I vehemently object to any notion that there is a problem just because some school building are more than 30 or 50 years old. I have gone to school on two continents, three countries and a handful of states, and in my series of temporary residences I have been in school buildings 5 to 150 years old, and seen some even older than that. That by itself it not a problem. The awesome architecture, or the quaintly archaic atmosphere by itself can inspire learning and respect for learning.

Secondly, whoever in the WCSD has failed to budget for and refuse to spend adequately for maintenance in all these years should be summarily fired and banned from employment in any school district anywhere. I was going to say hanged by his thumbs but I don’t see how that would encourage civilized debate, if indeed there is room left for that.

Third, some counties such as Clark are already reported to be salivating over the prospect if following in Washoe’s lead if this bill is passed. Why not? It bypasses important constitutional protections against capricious tax increases. There is not a single problem that government would not address with tax increases first last and always. Sorry to be repeating myself again and again, but what part of Taxed Enough Already don’t the government officials and bureaucrats understand?

Where the heck am I supposed to get the extra money? I am retired.

Where the heck are my kids supposed to get the extra money? I have three young adults still living at home, struggling in minimum wage retail jobs, as if time had stopped and they were frozen in their teen years. God knows when they’ll be able to start their own lives, if they even think about such silly things under the present conditions.

If anybody is serious about solving Washoe’s problem or any other county’s problem, then let’s have a proposal on the table to cut or eliminate the expensive administrative overhead in all school districts that are due to 50 years of federal mandates and their counterparts at the state level, which employ a huge bureaucracy of overpaid administrators and armies of support staff to monitor, enforce and generate endless reports on compliance with those mandates and programs. Depending on the school district, this overhead is 30 to 50% of the school budget. Surely there is plenty of room to cut enough there to meet essential needs.

Until they do that, here is no room for advocating, scheming and  proposing to impose more taxes, whether the people are willing to vote on it or not, whether the people are willing to tax themselves more, or not — most certainly not until we have a system that can accommodate those who voted for a tax hike to pay it, and those who voted against a tax hike to avoid paying it.

As you can guess, I am sick and tired of other people voting to tax me more, when all I have is the prospect of decreasing income. I am tired of renters voting to tax homeowners. I am tired of “don’t tax me, tax the fellow behind the tree.” I am tired of the rampant stupidity that thinks you can load all sorts of taxes onto businesses and property owners, and that all those taxes and tax increases won’t show up in higher prices for everything.

You are in a unique position as minority leader to do the right thing. I hope you won’t be so caught up in having to do something, anything, that we’ll end up with something as bad as AB46 in every county. Please vote NO on AB46.

…….

The good news is, this is GREAT for Carson City. With the new I-580 from Reno, it’s only 10-15 minutes to “drive a little more and save a lot money.” We can use the extra business that any tax differential is sending our way. The bad news is, of course, if Reno gets away with this, the others will also try it sooner or later. What part of T.E.A. don’t people understand??? You couldn’t have forgotten already, could you, that it means Taxed Enough Already. What part of basic economics don’t people understand?  Businesses don’t ever pay taxes, their customers do — or else they don’t won’t stay in business very long. How do I get to submit a bill draft request– to make sure a LIMIT is a LIMIT, no exceptions. I am retired and struggling to learn how to get by on a small fixed income. To me any property tax, and any hike in the property tax, looks like extortion by your friendly neighborhood mafia protection service. I am looking for tax RELIEF, not a tax HIKE; I am looking for government to shrink, to be more efficient and cheaper, not to grow and become more and more expensive, no matter what good reasons one can cite.

…….

AB46 allows Washoe county (and therefore the others) to raise their sales and property taxes, bypassing the constitutional 2/3 vote requirement to do so. Of course the counties are in favor, because this enables them to use any excuse to bypass legal and constitutional limits on taxes. I’ll scream “recall” from the roof tops if anybody tries to use this trick here in Carson City.

…….

I would hope that at some point especially someone like you, a Republican, would realize that your constituents are not groups, but individuals who voted for you or who at least live in your district. All those people who so shamelessly whined through their testimony on AB46 today were oh so willing to puff up their egos because there represent an association of this and that, but the money they are pleading for will come from all the individual little guys with their empty pockets who have only one vote — and as likely or not even that one vote is canceled out by the vote of their spouses — and therefore nobody pays any attention to them. Ours is not to ask how and why, ours is to just shut up and pay, and pay and pay…

As a retired person myself, I appreciate your idea to exempt seniors and others from the property tax hikes. But the sales tax will still hit them too, on top of the inflation that we are seeing now ramping up with a vengeance.

If you can believe the news, the Washoe county school district has had really bad management for many, many years. As a former teacher myself, I bristle at their suggestion that the money will have to be taken out of the classroom. How about taking the money out of the administration which is responsible for their mess? You NEVER hear of all the obscene overhead being cut, it’s ALWAYS teachers and classrooms.

I know you are outnumbered on this panel and in the assembly, but please, you know AB46 is a bad bill even if it arises from good intentions, so please do what you can to defeat it. Remember the words of Senator Kieckhefer and that comment from Clark county, which we heard today. This bill is a cat’s paw, a camel’s nose under the tent to run around the constitutional requirement of a 2/3 vote to raise taxes. No amount of amending this bill will fix that.

…….

I have gone to school on two continents, three countries and five states, in school buildings from 150 years to 150 days old, some with no heat in winter. Sure it’s nicer to sit in a new modern building. But learning takes place in your head, not in the building. I am not impressed with all the self-interested witnesses (builders, contractors, unions, realtors, etc.) who are obviously looking for economic benefits from all this.

Mr. Martinez, Mr. Bobzien, Mr. Kieckhefer, Mrs. Smith and others testifying FOR this bill did NOT explain what the managers of the Washoe county school district have done to
1. Set aside money in anticipation of having to replace aged-out equipment, roofs, etc.
2. Reduce other current costs so they can stay within their means and budget for their needs
3. Avert or prepare for this dire crisis. Surely all these problems have not just popped up out of the blue.
4. Otherwise demonstrate reasonable care in managing the monies at their disposal.

It seems to me, before they seek authority to raise taxes (what else is new?) they have to demonstrate that they have used existing revenues wisely. The presentations have NOT done that.

I am glad to hear that this bill would authorize a tax hike only in Washoe county, for two reasons:
1. It will drive more business to Carson City, to cash in on our lower taxes.
2. The legislature has NO business butting into a supposedly purely local matter. Local school districts already do get state funds, distributed state-wide from the general fund.

Let the people of Washoe County VOTE on this, let THEM decide their own business, rather than have it IMPOSED on them by the state. If indeed all the people and organizations testifying in support of this bill are so sure they are right and they enjoy wide and deep public support, then they should have no problem letting the people vote to tax themselves more.

The interest from Clark county in this scheme is testimony to the 800 pound gorilla in the room, that this bill is a test case to see if the strategy can be exported to other counties looking for more and more and more money for whatever dire good reason.

And as Senator Kieckhefer has just admitted, this scheme is also a creative way to get around the constitutional 2/3 requirement to approve a hike in a tax rate. As such, this is bill presents a clear and present danger to all property and sales ax payers in Nevada. NO WONDER ALL THOSE ELECTED OFFICIALS ARE ALL FOR THIS BILL.

I  hope this is not another example of the creeping “new federalism” or “californication” of Nevada, whereby our superiors know better what’s good for us ignorant peons…. PLEASE VOTE NO ON AB46. Let the people vote on directly on any hike in taxes used for their own needs.

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