Guinn’s real
legacy
A
grease spot on Leviathan's chin?
By Steven
Miller
BusinessNevada
As Kenny Guinn
departs Nevada’s gubernatorial stage, his
“legacy,” predictably, has been the topic of much media discussion.
What’s
notable in the discourse so far, however, is how little
attention is being paid to the actual record. Yet that record
is one that, for good or ill, will have important long-range
consequences for the people of Nevada.
A
significant but almost universally ignored part of that record
took place right at the beginning. Seeking Republican voters’
backing in the 1998 party primary, Guinn and his strategists
sent all eligible GOP voters statewide a large, expensive and
slick campaign mailer.
Titled “An
Interview with Kenny Guinn: Nevada’s Next Governor,” the
mailer had a front-page photo of the candidate speaking into
someone’s hand-held microphone. Then six large pages of
“interview” quotes followed.
Guinn’s
mail piece — aimed directly at the party faithful’s deepest
desires — presented him as a solid, low-tax,
limited-government Reaganite conservative.
“When You
Elect Kenny Guinn Governor,” announced an exceptionally
prominent headline, “You'll Be Protecting Nevada's Low Tax
Heritage.”
Then the candidate was asked: “How do you respond to those who
say that Nevada needs to overhaul its tax structure?
“KENNY GUINN:
“For 15 years, we've enjoyed incredible prosperity, with high
employment, high economic growth, and a broadening tax base.
Why jeopardize all that with new or higher taxes?
“For the last 25 months, I've been traveling our State and
people constantly tell me they do not want more taxes.”
To make the link to Reagan unmistakable, Guinn was “asked”,
“who helped you develop the philosophy you hold,”
“When it
comes to my philosophy of government, Ronald Reagan has had
the biggest influence on me,” answered Guinn. “Ronald Reagan
proved that just one man — with hard work and determination —
can cut big government down to size and return it to the
people.”
Guinn went
on in the “interview” to ring all of the Reaganite bells —
proclaiming himself “a firm believer in zero-based budgeting,”
for “privatizing government services whenever that will result
in better service at lower cost” and for “parental control of
education.” He pledged to “push hard for more charter schools”
and warned against weakening Nevada’s right-to-work laws.
Today, after eight years of the Guinn administration,
including the largest tax increase in Silver State history —
both in absolute numbers and proportionately — that 1998
campaign mailer looks like nothing so much as a profoundly
cynical effort to attain power by any means available.
Of course, the departing governor and his apologists attempt
to argue publicly that Guinn really is a conservative
Republican — merely a “responsible” one who needed to deal
with serious state fiscal problems that he thought would be
looming at the end of the decade.
Overwhelming evidence, however, suggests this contention is
false. Rather, what fits the evidence is the hypothesis that,
all along, Guinn and the Big Gaming faction that so massively
over-financed his ascent to political power were agreed on one
thing: that Nevada’s “Low Tax Heritage” actually constitute a
problem that had to be removed.
Remember
that, in anointing Guinn and arming him with a vast campaign
war chest, the gamers were selecting not just anyone, but a
Boyd Gaming board member personally well known to them. It’s
highly implausible that Guinn’s decades-long record of always
seeking ever-higher taxes, both in Clark County and statewide,
was not a factor leading to their selection of him.
Many new
Nevadans do not know the full context of Guinn’s selection by
the gamers. But for decades an important clique of
establishment casino barons had been growing ever more anxious
over the new businesses and residents moving into the state.
From the clique’s point of view, economic diversification of
the Nevada economy is a bad thing.
The issue
appears to be that each new non-gaming business coming into
the state brings not only alternative and independent
business-community leadership, but also an incremental and
proportional decrease, potentially, in gaming’s control over
the state political apparatus. For the better part of the last
century, the casinos dominated Nevada’s Legislature, Executive
branch, and —all-important from this clique’s point of view —
the state gaming regulatory bodies. Thus, increasing economic
diversification and democracy is apparently seen as a dire
threat. Additionally, more new businesses coming into the
state means more competition for workers — and higher salaries
that the casinos may find themselves compelled to pay in the
marketplace.
It’s not
unrelated that these same gamers for years have sponsored
bogus academic studies purporting to prove that
diversification of the Nevada economy is a negative for
the state. Surreptitiously circulated within state government
by clique lobbyists, those white papers have been singularly
ineffective — when not immediately laughed out of the room.
It is also
notable that, in the last days of the Bob Miller
administration, the clique launched an ill-fated and
ham-handed attempt to kill the state Commission on Economic
Development — the state agency charged with pursuing
diversification of the Nevada economy. Clique gamers testified
for folding the CED into the state tourism commission, where
it would be entirely under their control.
Apparently
the failure of these and other ploys led clique members to
settle on a major change in Nevada’s tax structure as their
solution of choice — notwithstanding the obvious risks such a
strategy held for the tax-averse gamers themselves.
“If we can
make Nevada much less attractive to businesses thinking of
moving here,” the gamers seem to have decided, “then paying a
bit more in higher taxes ourselves will be worth it.”
Whatever
the strategy behind the scenes, however, publicly throughout
the 1990s, the gamers grew ever more insistent that new taxes
should be imposed on general Nevada businesses.
Thus,
immediately after winning election, Guinn signaled his
anti-taxpayer intentions by reappointing Democrat Bob Miller’s
key bureaucrats — most notably, John “Perry” Comeaux, Miller’s
longtime tax and budget chief. Comeaux was notorious in
Nevada’s small business community for having attempted in the
early 1990s to unilaterally and illegally extend state (and,
implicitly, local) sales taxes to services in the graphic
arts, copywriting and advertising fields. Only statewide
political organizing by the entrepreneurs he targeted saved
the day — mobilizing state lawmakers and triggering a state
tax commission repudiation of the Miller administration /
Comeaux tax-grab.
One
billionaire gaming-industry insider who almost immediately
publicly acknowledged and discussed Guinn’s stealth agenda was
Las Vegas Sun publisher Brian Greenspun. Right after
the new governor’s January 1999 State of the State address,
Greenspun hailed Guinn for painting a dire picture of state
finances down the road. Guinn, said Greenspun, was signaling
“what it was absolutely clear he is committed to do,” namely,
“educate our citizens of the need to change our tax laws
and sources.” The word “sources,” here, refers expressly
to new taxes on non-gaming businesses.
As Guinn
proceeded to implement his stealth agenda, he discarded any
pretense of implementing zero-based budgeting and icily
ignored national experts who were offering help on getting
state agencies’ spending under control. After all, if you get
spending under control, there’s less of an excuse to seek
higher taxes. Instead, Guinn assigned state bureaucrats with a
vested interest in ever-higher spending to conduct a farcical
“Fundamental Review” of state finances. Sure enough, it soon
devolved into sessions of bureaucrats simply lobbying for more
spending for their departments.
This
governor also deserted his 1998 education pledges on parental
control and charter schools. He abandoned the promise he’d
made to reverse Bob Miller’s legally dubious 1994 executive
order mandating project labor agreements on state projects.
Then, just six months into his term, he surfaced his real
agenda publicly, launching an explicit campaign for systemic
tax increases.
Apologists
for the Guinn administration sometimes try to justify its
record by referencing the events of September 9, 2001. But by
9/11, Guinn’s campaign for higher taxes had already been
public for two years. And rather than put Nevada onto a lean,
wartime footing, the Guinn budgets — while the governor talked
looming fiscal disaster — proceeded to grossly expand
state government and spending into thoroughly marginal and
nonessential new areas.
When
credible economists examined the projections of looming fiscal
disaster that came from the administration and its pet Task
Farce on Tax Policy, they found phony assumptions and
garbage-level methodology. When those economists’ studies —
later to be proved solidly on target by actual state revenues
— were presented to the governor, however, he refused to even
consider them and continued using the phony stats publicly at
every opportunity.
Clearly,
Kenny Guinn was never the devotee of Ronald Reagan he
pretended in 1998 to be, when speaking to the GOP base. What
is not entirely clear, however, is why he believed that
attaining power through misrepresenting himself — in order to
reduce Nevadans’ freedom through taxes he knew the great
majority opposed — would ever constitute anything at all
resembling personal success.
Betrayal,
after all, was the essence of this — betrayal of GOP voters
and Nevada citizens in general. And it's the nature of
betrayal to always leave a lasting scar on everyone involved.
That, unfortunately, is Guinn’s real legacy for Nevada.
His
partisans, no doubt, will say that the tax increases were
“important,” and “for the voters’ own good,” regardless of the
voters' wishes. But no amount of allegedly good intentions
justifies any politician intentionally lying to the men and
women of the Silver State. They, not he, are the true owners
and sovereigns of this democratic republic. And the record
revenues flooding into state coffers the last three years
demonstrate emphatically that the people did indeed bring more
wisdom to this question than did this arrogant, yet finally
hapless, politician.
The people
knew what has subsequently come to pass -- that the huge tax
increases of 2003, like those of earlier years, would soon
quickly disappear down Leviathan’s gullet, their impact
practically negligible, leaving little more than a grease spot
on the monster's chin.
Yes, the
outgoing governor can point and say, "Hey -- I, me, Kenny
Guinn, made that grease spot!"
But the
monster merely blinks, unimpressed, as his insatiable minions
begin blubbering for more -- as the people knew all along
would be the case.
Steven
Miller is editor of BusinessNevada and vice president for
policy at the Nevada Policy Research Institute.
