Let’s create mammoth slot-machine façades at each interstate entrance to Southern Nevada to not only properly welcome motorists but to house tollbooths. Each motorist would be required to pay a $2 toll, but here’s the twist: A small portion of the motorists would randomly and immediately get their two bucks back. Fewer still would get back $10, $50 or even $100. Just a high-profile mandatory introduction to the vagaries of chance for which Las Vegas is known and a certain way through which Nevada can dig itself out of a budget hole.
Sound a bit off the rails? Well, folks, we’re in off-the-rails times. The bottom line is we need more tools to dig ourselves out of the hole we’re in—a $3 billion budget hole, if you’re keeping score at home—and that’s just to get us to level ground. Never mind the dream of making substantial improvements.
There are, after all, even crazier—and more substantial—solutions than our slot-machine gateway. Like a state income tax. Sure it’s hard to think about imposing a state personal income tax with the unemployment and foreclosure rates as high as they are. But the not-in-these-circumstances argument doesn’t hold much water when income-tax talk was also taboo during the boom. Only six other states have no income tax. The Nevada Constitution expressly forbids the personal income tax, so voters in two consecutive elections would have to approve an initiative to change it, or a legislative proposal would require approval by two sessions of the Legislature as well as a majority election by voters.
Tough hurdles, indeed. Even if pitched as revenue-neutral, with decreased sales tax to ease the burden, it’s a tough sell. And who are we kidding? It needs to be revenue-enhancing. Even if an income tax is perceived to be more stable and fair, those who oppose it will argue that we’ll turn into Vermont—one of the most-taxed states in the Union—overnight.
Also forbidden by the Constitution is a state lottery, which some would argue is a voluntary tax (frequently on those least able to pay it). Discussed with varying degrees of intensity in legislative sessions every two years, it always faces vociferous opposition from the casino industry but garners support across the political aisle. It’s significant money that now makes an exodus to California. And those in Utah, another state without a lottery, might be attracted to spend some money here if Nevada had a lottery.
We’ll need to get creative if we’re going to generate money to pay for the things we not only want, but need. So-called sin taxes on alcohol and tobacco could be increased, and we could even consider legalizing fresh sins to tax—brothels in counties in which they’re not permitted and recreational marijuana use. Or how about increasing the state gasoline tax? A pay-as-you-go plan would be fair and spread the burden, but as cars become more gasoline-efficient and more hybrids and electric cars hit the road, revenues will decline.
With the state facing a $6 billion shortfall in highway infrastructure funding by 2016, the Nevada Department of Transportation is searching for solutions. Earlier this year, NDT developed an on-car device to track vehicles and charge drivers based on distance, routes and time of day traveled. Privacy advocates have concerns, so annual odometer readings at registration time could be a fair way to assess a more just tax based on the number of miles driven. What about out-of-state drivers? Well, we’re back to the tollbooth idea.
Only those who underestimate the state’s budget woes would quibble with the idea of adding more tools to the shed—not necessarily to grow government services but simply to maintain the services we already have. So why not have a more serious, transparent and practical conversation, with everything on the table?