Saturday, July 12, 2003

Gag me

The ever-inane Las Vegas Sun editorializes that the Supreme Court's decision was "a victory for the children." (Must .. not ... spew.)

Chief Justice Deborah Agosti, who wrote the court's opinion, noted that the deadlock in the Legislature had created a crisis for public schools because the Legislature has failed to meet its constitutional responsibility to fund public education for the upcoming school year. Basically, the court found that the constitutional requirement for the Legislature to fund education trumped the requirement that tax increases be passed by a two-thirds vote.

Crisis ... not

But what is this responsibility, exactly? Let's go to the constitution, Article 11:

Section 2. Uniform system of common schools. The legislature shall provide for a uniform system of common schools, by which a school shall be established and maintained in each school district at least six months in every year, and any school district which shall allow instruction of a sectarian character therein may be deprived of its proportion of the interest of the public school fund during such neglect or infraction, and the legislature may pass such laws as will tend to secure a general attendance of the children in each school district upon said public schools. (Emphasis mine.)

Clearly, this provision was included to guarantee that kids in the sparsely populated rural counties would receive public schooling. But any "conflict" between the mandate that schools be funded and the necessity to balance the state's budget was invented by the court from whole cloth. The court could have ruled that existing tax revenues would easily cover the spending bills passed by the Legislature and signed into law by Kenny Guinn, leaving more than enough money to finance the operation of a school in each district for at least six months during the forthcoming school year. If the governor wished to ask lawmakers to appropriate more money for the schools -- and raise additional revenues by the necessary 2/3 majorities -- he would certainly be at his liberty to do so ... and republican government in Nevada would be preserved.

Far-fetched? Of course. But at least it's legal.

Friday, July 11, 2003

Worse than I thought

Rob Natelson, a law professor at the University of Montana who's helped draft tax limitation initiatives, says the Nevada decision will be cited as precedent by teachers unions in other states that are trying to get supermajority tax requirements invalidated. What's not shocking about this is that the Review-Journal's Carri Thevenot, who reported the story, had to go to Montana to find a law professor who found the decision troubling. The geniuses who "teach" law at UNLV didn't really have any trouble with it:

Carl Tobias, who teaches constitutional law at UNLV's Boyd Law School, said he and other law professors on campus read the court's decision Thursday afternoon and discussed it with each other.
"I think it's an interesting opinion," Tobias said. "And I think the emphasis that I see is on education, and that the court speaks eloquently and forcefully to education as a fundamental right."
The professor said he agreed with Maupin when he questioned whether the court had to act now. He said the court had other alternatives, including giving the Legislature more time.
"Whether that would have been effective, I don't know," Tobias said.

Be afraid, be very afraid.

Thursday, July 10, 2003

Court to Constitution: Drop dead

In a jaw-dropping, 6-1 decision, the Nevada Supreme Court ruled the constitutional amendment requiring a two-thirds majority vote by the Legislature for any state tax increase meaningless. (Read the opinion here.) The court said the Gibbons Tax Restraint Initiative "is a procedural requirement" less important than the "substantive constitutional law" mandating that the Legislature fund education. The Legislature can now pass a tax increase by simple majority vote.

Think about it. The voters use their duly authorized right to amend the state constitution by referendum only to be told by a handful of black-robed tyrants that their votes mean nothing. As an aside, the court followed the "reasoning" (if you can call it that) of the teachers' union, swallowing their argument that the 2/3 requirement made the whole job of governing "inconvenient." (That amicus brief is here.)

The Legislature will go back to work next week. And the question is: How high will the tax-hikers go? They had a deal to pass $870 million in new taxes ... will they double the ante?

Volokh on the crisis

After e-mailing Eugene Volokh, he responed with this insightful (natch) post, calling the ruling "shameful":

Finally, if the court is willing to nullify "general procedural rules" so that it can order the legislature to fund education, why stop at the 2/3 supermajority? What if it turns out that the Legislature can't even get a simple majority for a tax increase? Under the court's reasoning, it should nullify the 50%+1 requirement, too -- after all, the simple majority requirement is also a mere "procedural requirement that is general in nature." Or, better yet, why not order the governor impose the taxes himself? The requirement that taxes be imposed by elected legislators is also just a "procedural requirement that is general in nature." But wait -- that would be inefficient. Why doesn't the court just impose the taxes itself, and order government officials to just seize the property from Nevadans' bank accounts? The only thing that stops it is also a "procedural requirement that is general in nature," and apparently those aren't really binding any more.



Actually, the court didn't adopt the teachers' union arguments verbatim, because the union claimed that the Gibbons initiative should be declared unconstitutional. The court didn't have the balls to do that; instead, it danced around the issue, saying the 2/3 rule was "inconvenient." This makes even more a mockery of the notion of the rule of law, hinting that any "procedural" provision in the state's governing document is ripe for ignoring if you can convince a gang of judges to do so.

Tuesday, July 08, 2003

Higher education indeed

Briefs have been filed in the matter of Guinn v. Nevada Legislature, and among the more entertaining is one offered by the Nevada Faculty Alliance, apparently a group of university professors who are cheesed that funding for their tidy sinecures is threatened by the budget deadlock. (Read all the briefs here.)

If you wonder why, academically speaking, UNLV and UNR aren't mentioned in the same breath as, say, Harvard or Stanford (or even Berkley or the University of North Carolina), just read the profs' little temper tantrum, er, brief, which argues that the constitutional amendment requiring a two-thirds majority for tax increases is, well, an impediment to runaway spending. And that's just not fair.


a) funding for public education is mandated by the Constitution;

b) a simple majority can pass spending bills, but

c) a two-thirds majority is required to raise taxes:

... either the Gibbons Initiative should be struck down as being irreconcilably in conflict with the Nevada Constitution, or in the alternative, this Court should conclude that the Gibbons Initiative is not intended ot apply where revenues are mandated to meet fundamental requirements of the Nevada Constitution.

And these folks are teaching the "best and the brightest" in Nevada.

Monday, July 07, 2003

Or maybe not

There might not be a resolution to the fiscal impasse after all. As further details of the Secret Plan to End the Budget War leaked out, a potential deal-killer emerged: A new, 2.5 percent business profits tax -- the same sort of new tax on non-gaming companies that's been rejected by Assembly Republicans numerous times before. While the Legislature will meet at noon to consider the proposal, it looks as if it will get no more than 26 votes in the lower house ... two too few to become law.

GOP members hinted they would back a tax plan if the profits tax were replaced by a higher payroll tax, but those appeals have fallen on deaf ears, so far. Make no mistake: The payroll tax has problems, too, primarily the fact that it would be extremely regressive, applying to only the first $20,000 or so of annual wages, hitting low-income workers the hardest. Plus, it could easily be considered a personal income tax, which is (the last time I checked) not allowed by the Nevada Constitution.

But those long-run concerns matter little right now. The insiders running this operation are as witless as ever. GOP lawmakers have always resisted the creation of a new revenue stream that could easily be manipulated to stifle capital and business growth ... and provide hefty new funding for the state's bloated public sector. The Carson City Gang still doesn't get it. So the Supreme Court may intervene after all.

Sunday, July 06, 2003

Bye, bye free checking

A deal that would break the state's budget impasse has apparently been struck by a dozen-member group of lawmakers meeting privately in Carson City. Details are secret for now, but the primary new/different tax that would be imposed is a 3 percent "franchise fee" (a corporate income tax) on banks. It's the only version of a revenue-based tax that might squeak through both houses of the Legislature, but consumers will no doubt pay a hefty price if it does.

Free checking? It'll either disappear altogether or be available only to those who hold multiple accounts with hefty minimum balances. Talk to a teller for free? Forget it. Online and telephone banking? Sure, if you pay per transaction. Glad we have our money in out-of-state banks.

While casinos. public employee unions and their water-carriers in Carson City have accused banks of not paying their "fair share" of taxes, the willfully ignorant here forget this basic fact: The state's consumption-based revenue system has encouraged the development of a burgeoning financial services industry ... and it brings high-salaried people who pay lots of taxes -- property taxes for the nice homes they buy; sales taxes on meals, shows, clothing, home furninshings; even gaming taxes when they go to the casinos for a little fun. What's more, I'd bet a disproportionate number of these professionals send their kids to private schools, so they don't drain public coffers to the extent lower-paid casino workers do.

Of course, once the franchise tax takes effect, the financial services boom will end. Those highly paid, high-taxpaying employees will leave the state. And the political establishment will clamor for a new source of taxes to feed the insatiable bureaucratic beast. Thanks, gamers.