by Sean Golonka and Riley Snyder, The Nevada Independent, March 23, 2022
Top Republican governor candidates called for rolling back regulations, decried tax increases and promised to improve Nevada’s education system as a step toward bringing more businesses to the state.
The five candidates speaking at Wednesday’s nearly two-hour Keystone Corporation candidate forum included Clark County Sheriff Joe Lombardo, former U.S. Sen. Dean Heller, Reno attorney Joey Gilbert, North Las Vegas Mayor John Lee and businessman Guy Nohra.
They’re the top contenders in the crowded, 15-person Republican gubernatorial primary, with the winner taking on incumbent Democratic Gov. Steve Sisolak in the 2022 midterm election.
Sisolak’s administration and approach to education and business issues came under fire early and often during the forum, with all candidates saying that the state’s first Democratic governor in two decades has failed to improve education and the state’s business environment.
The forum largely focused on economic topics — moderator Daniel Tuntland asked candidates to not “beat up on each other” and said “we’re not going to talk about the Second Amendment, [Critical Race Theory], voter fraud, masks.”
It also marked the first 2022 candidate forum to feature Lombardo, who skipped previous cattle call events and said he would begin to attend them after the candidate filing period ended. Recent polling shows Lombardo leads the field but still only commands a plurality, not majority, of support.
The event was closed to the public and only open to ticketed attendees. Media outlets, including The Nevada Independent, were required to purchase tickets ($150 each) to attend the event.
The candidates by and large agreed that the state needs to diversify its economy, lessen reliance on the gaming and hospitality industries and expand educational opportunities beyond the traditional public school system.
Economic diversification
Lombardo said the expansion of legalized gambling across the nation underscored the importance of diversifying the Nevada economy moving forward. His definition of diversification includes a “predictable, low-tax environment,” workforce development, a focus on manufacturing and IT businesses, as well as recruiting businesses from outside the state, and reforming occupational licensing and affordable housing, which he said has to be “the tip of the conversation as we move forward.”
Gilbert said the state’s education system needed to improve as part of economic diversification efforts. Heller lauded former President Donald Trump’s 2017 Tax Cuts and Jobs Act, which slashed corporate and personal income tax rates, and said Nevada needed its own version of the legislation.
Candidates were split on the performance and activities of the Governor’s Office of Economic Development (GOED) — the state agency clearinghouse for workforce development efforts and the broad suite of state-offered tax incentives.
Lee said that even though he can’t “get a phone call from the governor,” GOED’s status meant that “finally there’s somebody at the state that will listen to what needs to be done in this area.” Nohra said he would work “hand in hand” with GOED to attract new businesses to the state.
“When the boss comes along, people pay attention,” he said.
Gilbert, who said “no one enjoys doing deals more than I do,” said a lot more could be done with GOED but was critical of the agency’s use of tax incentives, saying “it’s not the prudent thing to do to hand out money to companies to bring them here.”
Heller said he does not support “corporate welfare” or “sports welfare,” but credited work at the Tahoe Reno Industrial Center in Storey County as a success story and something for the state government to model, noting county officials there have moved quickly to help get projects started.
“If you have to wait a year to move dirt, you’re probably not coming here,” he said. “But a governor can change that. A governor can make that difference.”
Lombardo said he also does not support corporate welfare, but supported GOED and other local economic development agencies because “without that arm, we won’t have the capability” of attracting new businesses to the state. He also emphasized the need to ensure that when companies are given incentives to come to Nevada, they fulfill their promises in regard to the number of jobs they agree they’ll create and the wages they’ll pay.
“If they do not meet the performance measures, you have those clawbacks and negative sanctions associated with it,” he said.
Taxes
Tuntland, the moderator, asked the candidates about proposed tax cuts, including a potential repeal of the Commerce Tax. That tax, approved by the 2015 Legislature and championed by Republican former Gov. Brian Sandoval, is an annual tax on gross business revenue above $4 million with rates varying by industry. It’s applied to fewer than 7,000 businesses (out of about 150,000) in the state and accounts for around 5 percent of the state’s general fund budget.
Though repealing the tax requires a majority vote by the Legislature, Heller nonetheless called it “the worst tax we’ve ever put on the American people” and said he would issue an executive order on day one in office to repeal the Commerce Tax.
“The Legislature is going to go crazy, and then they’re going to sue me,” Heller said. “They’re gonna take it to a judge, and that’s fine. We’ll put it back on the ballot … What I will do is take away the money to collect it, and if they’ve collected [it], it will be a rebate back to these businesses.”
Lombardo said he was a proponent of “tax reform” and proposed the idea of raising the threshold for the Commerce Tax to potentially $5 million or $6 million. But he noted he would like to audit the state’s existing tax systems before moving forward with an outright repeal of the tax, saying that “nobody brings a solution forward on what that hole looks like and how you’re going to fill it”.
In response, Heller attacked Lombardo on the issue.
“If anybody is talking to you about tax reform, they’re talking about tax increases,” Heller said.
Gilbert said he would submit a budget to the Legislature eliminating the Commerce Tax — though the tax can only be repealed by a majority vote of the Legislature — but he agreed that “it’s probably the worst piece of legislation that we’ve ever seen go through here.”
Business environment
Candidates also spoke about the need for creating the right regulatory environment to bring new businesses to the state, and largely homed in on eliminating regulations.
“I’m going to do, between the time I’m elected and the time I take over, an audit on all regulations of all departments that report to me,” Nohra said. “I’m going to say, “And folks, next time you want to add a regulation, I expect you to take out two.”
Gilbert said regulations have “strangled” the state and expanded on Nohra’s proposal, saying he would get rid of 10 regulations for every new regulation introduced.
Lombardo promised the crowd that by the end of his first term in office, there would be fewer regulations in place than when he started, and said the first regulations he eliminates would be those related to COVID-19.
Heller, who noted that he recently saw gas prices soar to $6.30 a gallon in Lake Tahoe, said most Americans will have to pay $1,000 to $2,000 more for fuel because of prices this year. He joked to the audience that “most of us can absorb that,” but “outside these doors, most people here in the valley cannot absorb that.”
Lombardo compared his experience with running Metro as akin to being CEO of a very large company, with a $1.3 billion budget and more than 6,000 employees.
“Everything associated with what a governor does on a daily basis, I do on a daily basis,” he said.
Education
Across the board, candidates denounced the state of Nevada’s public schools, pointing to poor math and English skills among students following the closure of brick-and-mortar schools during the COVID-19 pandemic, and argued for more private and charter schools to expand educational opportunities in the state.
Gilbert said “limited vouchers” were not the answer, and the “only lasting solution (is) fully funded vouchers that go directly to every parent with no strings attached.”
Nohra bluntly said “our schools suck,” before advocating for expanding school choice through voucher programs and breaking up the Clark County School District. He said doing so would help introduce competition into the state’s educational system.
“In business, when AT&T got too big and wasn’t doing a good job, we broke them up,” he said. “CCSD can be broken up and should be broken up.”
When the topic of education came up, Heller largely spent his time attacking Democratic leadership in Washington D.C., but said he would not drop any of his “kids off at schools here in Clark County.”
Lee and Lombardo both took aim at Sisolak, arguing that the sitting governor was not doing enough for education in the state. Lombardo said Sisolak lacked vision when it comes to education, while Lee said the governor played a key role in the state’s education system. As a local control state, however, the Legislature has designated authority and power for operating Nevada public school districts to county-level school boards with elected members.
“It’s not the Clark County School District. It’s the Steve Sisolak School District,” Lee said. “He’s responsible for educating these children. In the Constitution, it says the government will give a minimum education.”