70°F
weather icon Clear

Jim Hartman: Taking a look at the Paul Laxalt, Ronald Reagan legacy

Updated August 10, 2018 - 12:14 pm

In the turbulent late-1960s, Paul Laxalt’s tenure as governor (1967-1971) was best remembered nationally for his phone conversations with the eccentric and wildly-rich Howard Hughes encouraging his acquisition binge of Nevada gaming properties that helped rid Las Vegas of mob influences.

For Nevadans, Laxalt is recalled as the youthful lieutenant governor who defeated two-term Democratic Governor Grant Sawyer in November 1966.

Writing later about his time as governor in “Nevada’s Paul Laxalt: A Memoir,” Laxalt noted that economic recession in 1966 had greatly reduced state revenues and that even with cuts his first budget could not be balanced.

“We came to the painful conclusion that we needed more revenue,” Laxalt wrote. “How could a conservative new governor justify a new tax increase in his first year in office? There was no way out.”

Seeking advice, Laxalt called his friend Ronald Reagan, who had just been elected governor of California. Reagan was in a similar predicament. “My political pain was eased somewhat when I called Ronald Reagan,” Laxalt wrote. “He said ‘I have the same problem and I’m going to ask for a tax increase. It’s the responsible thing to do.’”

And so it was that Laxalt in Nevada and Reagan in California both raised taxes in their first 1967 state budgets. It was the responsible course of action.

Laxalt proposed distributing the pain equally. “In order to make the tax hike ‘fair’, I tried to spread the burden as broadly as possible,” he wrote. A bipartisan two-thirds majority of Nevada’s legislature supported Laxalt, raising the gaming tax by 20 percent and the sales tax by 50 percent (from 2 to 3 cents).

With these additional revenues, Laxalt was able to keep his campaign promises.

The Laxalt legacy includes the beginning of the Nevada community college system; the building of the state’s first medical school at the University of Nevada, Reno; the modernization of gaming with “corporate licensing”; a bi-state compact with California to protect Lake Tahoe from over-development and establishment of the Tahoe Regional Planning Agency; the addition of 12,000 acres of state park land at Lake Tahoe; reforms at the antiquated Carson City prison; and his “Lighthouse of Education” pledge to raise teacher salaries and lower classroom size.

As for Reagan, after defeating two-term Democratic Governor Pat Brown in November 1966, he inherited a $400 million deficit in 1967 ( more than $3 billion in 2018 dollars). Initially, he attempted a 10 percent across-the-board spending reduction, but no amount of spending reductions could have balanced California’s budget.

Reagan then proposed the largest tax hike by any governor in the history of the United States up to that time. His $1 billion tax plan (more than $7.5 billion in 2018 dollars) provided for tax increases on sales, personal income, banks and corporations, insurance companies, liquor, and cigarettes. It was approved on a bipartisan two-thirds vote in both legislative chambers. Ultra-conservative critics declared Reagan a turncoat.

Notably, the Reagan tax increase generated substantially more than was needed to close the inherited deficit, and provided funding for major initiatives during his two terms as governor from 1967-75.

The “Reagan record” later included delivering on his promise of property tax relief; additional school district funding to satisfy a court decision; and 145,000 acres added to state parks prior to Golden State land prices soaring. It was the largest land acquisition by any modern California governor.

Two conservative Republican icons, Nevada’s Paul Laxalt and California’s Ronald Reagan, showed that real leaders do the “responsible thing”—which may include increasing taxes when required.

Laxalt and Reagan took bold steps to right their respective state ships back in 1967.

Jim Hartman is an attorney residing in Genoa

Don't miss the big stories. Like us on Facebook.
THE LATEST
Tim Burke: Expect more trouble ahead along U.S. 95 in Nevada

Drivers traveling on U.S. Highway 95 between Las Vegas and Northern Nevada should expect the already dangerous road to become even more dangerous over time with the steadily increasing number of semi-trucks transporting goods between the north and south’s interstate highways.

Tim Burke: A look at Nye County making ‘worst’ list

In June, USA Today published a “worst county in each state” article. Written by 24/7 Wall Street, a financial news and opinion company, the article was based on an analysis of economic data.

Jim Hartman: Troubled country should remember first July Fourth

President Donald Trump got what he wanted for July 4 — a patriotic celebration honoring America and featuring the United States military branches with aircraft flyovers and fireworks. Trump was at the center of attention speaking from the steps of the Lincoln Memorial.

Dan Schinhofen on border issue: Migrants or an invasion?

One of the congresswomen from New York, Alexandria Ocasio-Cortez, said something the other day that embarrassed me and I found to be over the top. She compared the holding facilities, that are being overwhelmed at our southern border, to concentration camps.

Dennis Myers: Understanding the arrogance of computer people

I’ve had contact with a lot of computer people over the years, so when I saw a Quora discussion on “Why are a lot of programmers so arrogant?” I tuned in and read comments like this: “Because they ‘believe’ that they are smart and special, but they never realize for a sec that being able to write code does not give them the privilege to be rude to other human beings.”