There’s always been an incongruity about California’s having three disparate states on its borders.
As California’s population exploded during the 20th century, those of Nevada, Arizona and Oregon remained relatively sparse and today, collectively they have just one-third of California’s population.
The economies of California and its neighbors developed differently, but they once shared a generally conservative political outlook. Recently, however, we’ve shifted to the left, and Oregon has as well, while Nevada and Arizona still lean rightward.
California and Oregon seem to get along fairly well, although that may be because their population centers are many hundreds of miles apart and there’s relatively little human or economic commerce between the two.
Arizona and Nevada are a much different story. California jousts with the former over Colorado River water and with the latter over just about everything.
Earlier this month, the relationship between California and its neighbors to the east declined another couple of notches when Democratic Gov. Jerry Brown referred to their looser gun control laws as “a gigantic backdoor through which any terrorist can walk.”
The comment, made after a homegrown terrorist attack left 14 dead in San Bernardino, drew sharp rebukes from the Republican governors of both states.
The California-Nevada relationship has been particularly frosty. There’s a long-running conflict over environmental issues around Lake Tahoe, for instance. And in recent months, Nevada has tweaked California by seemingly luring away California firms.
By offering generous subsidies, Nevada persuaded electric car magnate Elon Musk to locate a huge battery factory near Reno. And last week, the Nevada Legislature approved another “incentive package” to get another California electric car maker, Faraday Future, to place its planned factory in Las Vegas.
Nevada can be particularly nettlesome to California on taxes. It has no personal income tax, while California’s PIT rates are the nation’s highest, topping 13 percent for some taxpayers.
The Gilbert Hyatt case is a case in point.
Hyatt, an inventor who devised some of the most important high-tech breakthroughs, moved from California to Nevada before beginning to get royalties from his patents.
Hyatt has been battling California’s Franchise Tax Board for many years and won a key ruling in a Nevada court, upheld by its supreme court, that the FTB committed fraud in trying to collect taxes on his earnings.
The conflict is now in the U.S. Supreme Court, which heard oral arguments this month on whether California enjoys immunity from court judgments in other states.
California claims immunity. But to win the case, the court would have to overturn its 1979 ruling in another dispute with Nevada – a win for California, ironically – that said states don’t have such immunity.
It’s another skirmish in what is becoming a multifront political and legal war between the two states.