OPINION: Exploding two myths about the Sandoval tax hike

SUBMITTED BY CHUCK MUTH

As a candidate for governor in 2010, Brian Sandoval stated categorically that he would not raise our taxes. Once elected, he re-asserted that pledge on numerous occasions. But by the end of last year’s legislative session, the governor went back on his word and re-imposed some $620 million worth of “temporary” tax hikes.

Recently, the governor preemptively surrendered on the tax hike issue for next year by announcing that for the second time he was going to re-impose that $620 million worth of “temporary” tax hikes in next year’s budget. In announcing his flip-flop-flip, the governor said it would avoid “further cuts to education.”

Now, that’s an old liberal tactic of hiding behind children. But the truth is this latest proposed extension of the “sunsets” is NOT to avoid cuts to education. (And, for the record, there ARE additional cuts to education we SHOULD consider, including getting rid of the failed class-size reduction boondoggle.)

No, the real purpose behind re-imposing the sunsets was revealed just days later by Sandoval’s budget czar, Jeff Mohlenkamp, who explained in a memo to department heads the true motivation behind the governor’s decision:

“All executive branch agencies must limit their agency request budget submissions to amounts listed in the attached General Fund target sheet,” Mohlenkamp wrote. “These General Fund targets are . . . adjusted for pay-related reductions that sunset effective July 1, 2013. These reductions that have been added back include furloughs, pay rate reductions, suspension of merit salary increases, and suspension of longevity pay.”

Ah-hah! So apparently the “temporary” tax hikes that were supposed to expire are being re-imposed in order to end the “temporary” furloughs and other pay reductions for government employees? Funny how that little bit of information wasn’t included in the governor’s announcement, huh?

So the private sector will have $620 million worth of “temporary” tax hikes re-imposed on them in order to give public employees raises, not to avoid cuts to education. So there’s Myth #1 exploded. Here’s Myth #2.

Supporters of extending the $620 million tax hike say it’s needed to continue exempting 140,000 small businesses that were exempted from the payroll tax as part of the original deal in 2009. But that’s not really true either.

Indeed, as reporter David McGrath Schwartz noted in January 2011, that “loophole” was discovered in the governor’s budget before last year’s session even began, and the administration declared it would be fixed and those businesses would be safe.

So those 140,000 small businesses were NEVER going to have the payroll tax re-imposed on them even if the sunsets expired as they were supposed to. And again, the sunsets are now being re-imposed to give higher pay to government employees, not to avoid cuts to education.

Good thing there’s no truth-in-labeling law for politics, huh?

Chuck Muth is president of Citizen Outreach and founder of CampaignDoctor.com, and he blogs at MuthsTruths.com. He can be reached at chuck@citizenoutreach.com.

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