MUTH’S TRUTHS

Here’s the Taxpayer Protection Pledge Gov. Jim Gibbons made to the people of Nevada during the campaign last year…

“I, Jim Gibbons, pledge to the taxpayers of Nevada, and all the people of this state, that I will oppose and veto any and all efforts to increase taxes.”

And here’s an excerpt from the statement his office released just this past Memorial Day weekend…

“…I will not raise taxes on the people of this state. . . . There should be no mystery here about my position on increased taxes. . . . We have existing revenue streams that can and should fund our needs. We can and will use those revenues, not create new ones.”

Seems pretty clear cut, no?

Unfortunately this morning…no.

According to CityLife editor Steve Sebelius in his blog yesterday, an increase in “fees” might be OK with the governor after all: “Fee increases, provided they are done for a legitimate cause and the affected industry agrees, are OK by Gibbons, (Gibbons’ chief-of-staff Mike) Dayton said.”

Um, exactly who gets to define “legitimate cause”?

Anyway, Dayton’s reported position was repeated by Reno Gazette-Journal reporter Ray Hagar in a column this morning: “Gibbons has said he will allow fee increases by interest groups who want to accept them.”

In addition, the Las Vegas Review-Journal reported this morning that Gibbons’ communications director, Brent Boynton, “said the governor opposes all tax increases and only will support fee increases approved by the affected industry.”

Fees…such as your vehicle registration fees…are taxes by another name. The money goes to the government and you don’t have a choice as to whether or not to pay them. Calling a cow a chicken doesn’t make the cow a chicken. “Fees,” other than very specific and limited USER fees, are taxes paid to the government. A fee increase is a tax increase. Period.

And just because an industry “accepts” or “agrees” to the fee increase, doesn’t make it OK.

Let’s say the insurance “industry” agrees to and accepts a “fee” increase on itself…but then turns around and raises YOUR premium in order to cover the “fee” increase. Who’s REALLY paying for that tax/fee hike? Yep. You and me…NOT the industry.

That being said, as noted above, there ARE certain exceptions when it comes to “USER” fees. Voting for an increase in a TRUE user fee is NOT considered a violation of the Taxpayer Protection Pledge. However, Americans for Tax Reform, sponsor of the Pledge, defines the term “user fee” very narrowly:

“To qualify as a fee, a charge must fund a specific service, with no excess going into a general fund; the charge must be paid only by those who use the specific government service; and individuals must have the choice whether to purchase the service from government (and thus pay the fee) or to purchase the service from a private business. Excise taxes, sales taxes or taxes levied on businesses to pay for government regulation are NOT user fees.”

If legislators wish to increase a TRUE user fee as defined above…fine. But if the fees they intend to raise are dedicated to expanding or increasing government regulation, that’s a no-no…whether the industry says it wants it or agrees to it or not. The answer here isn’t to increase the fees but to decrease the government regulation, thus obviating the “need” for the higher fees.

And back to the “if the affected industry agrees” rationale. Just because the biggest industry titans and their high-powered lobbyists say their “industry” supports a given “fee” hike, doesn’t mean everyone in that industry actually agrees. The larger companies can often absorb higher fees without much impact, but for the smaller mom-and-pop operations, such higher fees could have a crippling effect on their bottom line.

If an “industry” REALLY wants to pay more for more government regulation, there’s a simple way to accommodate them: Set up a VOLUNTARY “Tax Me More” fund for that purpose.

If an “industry” wants the government to hire two more government regulators, then set up a separate fund into which the “industry” can kick in extra money VOLUNTARILY. If some members of the “industry” don’t participate, that pretty much tells you the “industry” didn’t REALLY want the extra government “service” after all, doesn’t it?

This matter of “fees” isn’t really a gray area. It’s pretty black-and-white. But some members of the governor’s staff seem a bit confused by it, or perhaps there’s some kind of communication breakdown. I only hope that when push comes to shove, the Governor sticks by his Pledge and stands as firmly on non-user “fee” hikes as he’s thus far been on “tax” hikes.

But as of this moment, there IS some doubt. Let’s hope it’s cleared up…soon.

Posted on May 29th, 2007 by Chuck Muth
Filed under: Nevada