Sisolak’s beeline for budget cuts

Here comes the Guv
Gov. Steve Sisolak prior to a remarks delivered on YouTube earlier this year.

Amid the distress, hardship, tragedy, uncertainty, dread, anxiety, and a video of a small dog doing a delightful parody of Gloria Gaynor’s “I Will Survive,” all of which have come to characterize this our corona life, perhaps you missed the news that Gov. Steve Sisolak is already making a plan for what Nevada is going to have to do as things settle down.

Nevada, your governor recently explained, will have to cut the state budget.

“All Nevadans will be making cuts to their budgets,” Sisolak said in an April 3 letter to state department heads, “and we need to as well.”

For the unknowable, which is to say foreseeable, future, Nevada sales taxes will be a small fraction of what they were. Casino taxes will be zip. In Nevada’s regressive and dysfunctional tax structure, those are the two biggest sources of state money.

Nevada isn’t alone in plotting budget cuts. At exactly the same time people will need more public services, states nationwide are planning to cut those services. As history has shown time and again, most recently during the economic crash of a decade ago, when the going gets tough, governors get cutting.

It’s just common sense.


But here’s a thing…

When Sisolak was “thrilled to announce” former MGM CEO Jim Murren would be heading up a “Response, Recovery & Relief” task force, the governor declared “it is inevitable that we will need to rely on both the government AND business to see us through this crisis” (the all caps emphasis was in the governor’s prepared remarks).

However inevitable budget cuts may be – and hence, prudent to plan – in the spirit of relying “on both government AND business,” the state should also be hatching some plans for how business can help keep public and social services afloat when people will be needing them perhaps more than at any point in any of our lifetimes.

Yes, the $2 trillion dollar CARES act passed by Congress last month allocates $150 billion for aid to states. And yes, the next bill Congress passes should, oh, at least double that. The next bill Congress passes should also include another five or six $1,200 direct payments for individuals, for that matter. And probably another $350 billion to help truly small businesses. But just because all those nice things should be in the next bill doesn’t mean they will.

When Sisolak asked Nevada to “imagine my excitement” that Murren was heading up a task force, the governor asserted that “it’s on us as Nevadans to tackle this. And that requires some out-of-the-box and proactive approaches.”

The governor was absolutely right.

And yet it’s hard to imagine any approach that is more in “the box,” and reactive, than cutting the state budget.


While businesses, especially small businesses, are hurting and endangered, some businesses in Nevada are hurting less than others.

And some may not be hurting at all.

Google, Apple, Amazon, Switch, and Tesla/Panasonic all were basically force-fed lucrative tax breaks for deigning to do business in little old Nevada. Nevada tax breaks for big corporations should be eliminated immediately, and replaced with a state corporate income tax based not on some deduction-riddled, lobbyist-written tax code, but on profits as declared to shareholders, like Elizabeth Warren said.

The tax should apply to banks and financial institutions, obviously. They’re the ones who destroyed Nevada’s economy last time, and yet we bailed them out. Time to return the favor.

And needless to say, the corporate income tax should apply to Big Gold.

Over the last several weeks, which is to say throughout the coronavirus crisis, the price of gold has been hovering pretty solidly above $1,600, occasionally topping $1,700. The price spent most of the last decade in the $1,300 range. 

The worst-kept secret in Nevada is that the state sorely needs to rethink how it taxes mining. If by some chance the Nevada political-industrial complex rejects the idea of a robust corporate income tax (sniffle), there are still ways for Nevada to make the mining industry start to repay Nevadans for the the decades of reckless largesse and kid gloves treatment bestowed on the industry by the state’s politicians.

Nevada’s mineral tax rate is in the state constitution and can’t be taken out soon, but there are a couple immediate steps Sisolak & Co. can take to make the industry step up.

First, instead of rushing to cut the state budget, rush to cut mining’s tax deductions.

Second, make mining do what it agreed to do during the Great Recession, and pay estimated taxes for future years in advance.


In his letter to department heads, the governor said that his administration had undertaken “the hard work of meeting and formulating the means and ways to successfully implement my vision of a family and child centered government,” and lamented that the scope of the current crisis will throw that progress off track.

Maybe it doesn’t have to. At least not entirely.

Bringing mining to heel and/or even implementing a tax on real corporate profits might not offset all the revenue Nevada is losing because of the coronavirus. But some “out-of-the-box” and “proactive” policies that acknowledge contributions will required from “both the government AND business” could make a respectable dent. They could perhaps prevent Nevada from – just to take one of countless examples – gutting mental health services that are already the nation’s least adequate, and which will probably see a spike in demand because, you know, stuff these days.

Now if only we could figure out a way to get out from under that preposterous football field.

Hugh Jackson
Editor | Hugh Jackson was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and author of the Las Vegas Gleaner political blog. Prior to moving to Las Vegas, he was a reporter and editor at the Casper (Wyoming) Star-Tribune.