a service of the Nevada Policy Research Institute

Issues

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.

Mailer front

Mailer page 2

Mailer page 3

Mailer page 4

Mailer page 5

Mailer back

 

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.