Republican Governor Used Court to Raise Taxes

  • by:
  • 08/19/2022

If you visited the State of Nevada homepage last week, you saw Gov. Kenny Guinn (R.) smiling back at you, proudly holding up a copy of the $836-million tax hike he just foisted on Nevada businesses and consumers.

The tax hike passed at the behest of the gambling industry, but it could not have been done without Guinn's enablers: a craven legislature and a dramatically overreaching state supreme court.

On July 10, that court essentially nullified an amendment to Nevada's constitution that mandated a two-thirds majority in the legislature for a tax hike. In 1994 and 1996 referenda Nevadans had twice voted overwhelmingly to add that amendment to their state constitution. Because of the two-thirds requirement, Guinn was having trouble raising taxes.

Guinn coasted to re-election last November with 68% of the vote against what one Republican source called "the weakest candidate the Democrats could find in the whole state." In this easy race, Guinn dodged questions about whether he would raise taxes. Then, with his State of the State address on January 20, he began working for the largest tax hike in the state's history.

A majority of state legislators sought to accommodate Guinn, but through early July they were unable to overcome the resistance of 15 conservatives in the 42-member state assembly, who, because of the two-thirds rule, could block the tax hike.

Guinn threatened to shut down the state government as the fiscal year came to a close. He manufactured a crisis over education spending, and then sued the legislature in the state supreme court.

This produced an amazing 6-to-1 decision that the two-thirds requirement in the constitution was merely a "procedural" provision, and therefore less important than the "substantive" constitutional obligation of the state to fund education. The court concluded the legislature could ignore the two-thirds rule whenever it used education spending as an excuse.

Oligarchic Jurists

The court's nullification of the two-thirds rule-along with the idea that any court could force a tax hike-was so outrageous that it seemed sure to provoke a voter backlash. With the right leadership among elected Republicans, the coming year might have seen an historic grassroots movement against a judiciary gone wild-perhaps a recall election against all six liberal supreme court justices-and an up-ticket electoral implosion for state Democrats that could help defeat U.S. Sen. Harry Reid (D.-Nev.), who faces re-election next year.

It could have been a model for conservatives nationwide, who are already upset about overreaching by the federal judiciary, most notably in the Supreme Court's sodomy case last month.

Instead, Nevada's GOP establishment is squandering this opportunity.

Last Tuesday, after the court's ruling, formerly anti-tax Republican Assemblyman John Marvel (Battle Mountain) switched his vote, giving the tax hike a two-thirds majority-28 ayes, 14 nays.

"I didn't know what kind of a train-wreck we were going to have unless we got something out of there," Marvel told HUMAN EVENTS. "Sometimes you just have to bite the bullet and do what you think is right for the time."

Marvel said that the failure of the governor's tax package (S.B. 8) would have led to the passage of an even worse bill (S.B. 6) that would have initiated an income tax-something Nevada does not have.

But Marvel admitted that S.B. 6 would never have passed with a two-thirds majority. Instead, pro-tax liberals would have had to rely on the court's nullification of the state constitution to institute a state income tax with a simple majority-a huge political risk.

Conservatives in Nevada believe that had Republicans in their state stuck together like Republicans in California-who are using a similar two-thirds provision to prevent Gov. Gray Davis (D.) from raising taxes-the Nevada GOP could have taken its case to the people with outstanding results. They could have placed the blame for an unconstitutional tax hike squarely on the shoulders of Democrats and rogue judges, fueling a populist anti-tax revolt that would have advanced the GOP cause in many quarters.

Had the tax hike passed by only a majority vote in the assembly, an initiative to recall the six supreme court justices who made it possible almost certainly would have qualified for the state ballot this fall. While activists are still working on the initiative, its prospects dimmed with the passage of the tax hike with a two-thirds majority.

Without the liability of Gov. Guinn on the ballot, Republicans had a chance to ride the momentum of the anti-tax revolt to big gains in the 2004 elections. They even may have had a chance to overthrow the Democratic majority in the state assembly.

But now this opportunity has all but disappeared. In supporting the tax hikes, Marvel and the other Republicans forsook principle and good policy, and gained no political advantage in return.

Worst of all, perhaps, the six oligarchic jurists who nullified the two-thirds rule will likely remain on the bench to do further damage.

The day after the tax vote, Americans for Tax Reform President Grover Norquist was enraged and heartbroken. "How do we explain the difference between the two political parties?" he asked.

He promised primaries against the Republican turncoats, and a 2004 ballot referendum to repeal the tax hike.

In the background of this story is the fate of U.S. Senate Minority Whip Harry Reid (Nev.). His vulnerability in 2004 would have been greatly increased by a strong reaction to a Democrat-driven state tax hike. He clearly understood this and was noticeably silent about the state's budget controversy. If the Republicans had embraced the controversy instead of surrendering, he could have been forced off the sideline.

In 1998, Reid eked out a 428-vote victory. He has never attracted more than 52% support since his Senate election in 1986. Since then, Nevada has been trending Republican. A Gallup Poll last year showed that 48% of Nevadans now identify themselves as Republicans, while just 40% identify themselves as Democrats.

But Reid is a survivor, and probably the only Republican who can beat him is U.S. Rep. Jim Gibbons (R.-Nev.), who will announce his intentions in August.

At first glance, the state supreme court ruling would seem to improve Gibbons' position. He was the state legislator who actually placed the two-thirds requirement on the statewide ballot in 1994, and after this year's court ruling, he promised a new referendum.

"This is and will remain an issue between the disenfranchised voters of Nevada and the Nevada State Supreme Court," he said after the decision.

Gibbons' spokeswoman, Amy Spanbauer, touted Gibbons' solution to the problem: the "Education First" initiative. It would prohibit the state legislature from scheduling consideration of the constitutionally-required education-funding bill last in the legislative session when it can be used as an excuse to raise taxes. (This was the strategy Gov. Guinn and his legislative allies used this year.)

But curiously, Spanbauer would not criticize the tax hike itself, or the governor's attack on the legislature's authority by bringing it to court, or the Republican legislators who had betrayed the cause of low taxes.

It turns out that Dawn Gibbons, the congressman's wife, was one of four assembly Republicans who supported the tax hike before Marvel's defection. She did not respond to phone calls, but she has announced that the state budget battle has convinced her not to run for re-election.

Jim Gibbons, a conservative (American Conservative Union rating: 91%), suddenly finds himself in a very unfortunate position. His office did not return subsequent phone calls asking whether he disapproves of his wife's vote for the tax hike.


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