DENNIS MYERS Against the Grain Advertisement

In 1981 Republican Gov. Robert List asked the Nevada Legislature to shift state government from property to sales tax reliance by nearly doubling the sales tax.

The legislature did as List asked. Sales taxes are always easier to sell to the public because, as the 1960 Zubrow Report on Nevada taxation commissioned by the legislature noted, a sales tax is a sucker tax -- the rate of collection is so gradual that the public has no idea how heavily it is being taxed. In addition, a sales tax is a flat percentage, which inaccurately makes it appear to be fair. And then, too, property taxpayers tend to vote more heavily than sales taxpayers, who are more likely to be low income people. (The Zubrow report had also warned against becoming too dependent on taxes paid by tourists.)

Nevertheless, the lawmakers began having misgivings even before the 1981 legislature ended and some of them tried to repeal the high sales tax they had just enacted. But List's veto threat stopped that.

So the 1981 legislative session ended with the state's tax structure much more vulnerable to economic downturns, because sales taxes decline sharply in hard times. And a major national recession got underway later that year.

Gov. List was forced to cut state spending once, twice, three times. By the time he left office -- his reelection bid defeated by his mishandling of state finances -- the state treasury was nearly in deficit and the legislature had to reclaim some loaned funds from the state pension system just to keep the state checking account in balance.

Ten years later it happened again. A 1992 national recession sent Nevada into another budget crisis. Gov. Robert Miller cut state spending in two phases, in January and July 1992.

Ten years later it happened again. During the 2001-2002 downturn, Gov. Kenny Guinn was hit with a budget crisis and was forced to slash programs.

It's especially hazardous when public revenues fall off in hard times because that's exactly when the public needs public services the most.

And there were indications that the budget crises might start coming more frequently. The economy, both in Nevada and nationally, was changing to an information-based economy. At her last legislature, the late Nevada Assemblymember Jan Evans deplored "placing high reliance on sales tax. That means durable goods when we know in the economy the real growth is not on durable goods but on services." The sales tax no longer generated the kind of money it once did and the state was riding for a fall, a bad one.

All during these years everyone knew what was wrong and how to fix it. The terrible consequences of the List tax shift prompted study of the stability and fairness of the Nevada tax system. In 1988 the Nevada Legislature commissioned another report, this one performed by Price Waterhouse and the Urban Institute. But no changes resulted. No one wanted to make the hard decisions needed and no legislators wanted to cast the unpopular votes that might be needed.

In 2003 Gov. Guinn took the bull by the horns and proposed a major tax hike and restructuring of state taxes. It averted an expected crisis and made state government revenue a little more stable. But it did nothing about equity - fairness in taxation, which is indispensable for public confidence in taxation - and the kind of broad-based, fair tax system the state needed was still not in place. (Guinn had hoped for more discussion of equity, but stability came first.) For some legislators, such as Senate Democratic floor leader Dina Titus, the fairness of state taxes was not even on the radar screen.

During these 27 years, legislators succeeded in avoiding the kind of taxes that are most fair and most stable, each legislature slapping together a patchwork of taxes that got the state through the next two years, and slowly painting the state into a fiscal corner. (One of Myers' laws: The fairer a tax is, the more courage required to enact it.)

So now, here we are again, facing the latest budget crisis - and they are starting to come more often. This one is 2007-2008, if it ends this year.

There's an old saying, one that I've heard variously attributed to Rita Mae Brown, Albert Einstein, Rudyard Kipling, Benjamin Franklin and a founder of Alcoholics Anonymous, and also described as a Chinese proverb. It goes something like this: Insanity consists of doing the same thing over and over, expecting a different result each time.