Columnist Jon Ralston: Governor at a policy crossroads

Saturday, Jan. 13, 2001 | 10:31 a.m.

Jon Ralston, who publishes the Ralston Report, writes a column for the Sun on Sundays and Wednesdays. Ralston can be reached at 870-7997 or through e-mail at ralston@vegas.com

THREE SEEMINGLY unrelated news items this week reveal all too well the state of the state as it relates to the policy and political dilemmas facing Gov. Kenny Guinn and the Gang of 63:

1. Casino win for November shrunk 3.3 percent over last year -- the Strip slipped 7.7 percent over 1999. The base levels are so high now that declines -- or at least a flattening out -- are inevitable.

2. The Nevada Resort Association met in Las Vegas and discussed the Legislature, the teachers union's tax proposal and those declining revenues. NRA boss Bill Bible, who not coincidentally is a former state budget director, suggested that Economic Forum projections might not be met.

3. Gaming lobbyist Harvey Whittemore implied strongly in Reno that the gamers support the teachers plan for a 4 percent business profits tax. Then Bible put out a news release, risibly declaring: "Gaming industry officially neutral on teachers tax."

Against the backdrop of these events, Guinn and his kitchen Cabinet, most of whom have gaming and big business clients, were inserting the final rhetoric into the governor's pre-legislative address scheduled for Jan. 22. Two years ago, in his first State of the State address, Guinn strongly implied that his austerity budget of 1999 was constructed to be an object lesson to illustrate the folly of allowing the tax structure to remain unchanged as gaming revenues level off or decline and sales taxes rise and fall with predictable unpredictability.

Now a week before his second speech, as the problem has never been more acute, the governor must listen to re-election advisers with a financial interest in his garnering a second term and an array of special interests who have a huge stake in the outcome of this debate everyone continues to avoid. Here's what's happening from the vantage point of the four important constituencies:

* Guinn: The governor wants to address the tax structure. But will he say something about the problem -- and more importantly do something later -- in his State of the State? Surely his advisers with gaming ties will urge him to do so. But some of those -- and others -- will fret that he could jeopardize his re-election in 2002 if he does so. I think he will talk about it (although I acknowledge my fingers are crossed).

* Gamers: Even though Whittemore may have been too forceful, he only made public what everyone already knows: The gamers want a broad-based tax. And that meeting in Las Vegas helped coalesce the NRA membership behind trying to force action during this session on tax policy. The gamers, who have considered a TV campaign to try to apply political pressure, know they have to be careful of being perceived as only wanting to avoid taxation.

* Business: These folks have infuriated the gamers and legislative Democrats with their reactionary position, which loosely translated is "no way, no how." The question is not whether the Democrats will let them get away with it but whether Guinn, who has told folks he thinks businesses should pay more, will. The question for the chamber and the disingenuously named Pro-Education Alliance is whether they will use the teachers' initiative purely as a fund-raising and membership augmentation tool or use it to actually talk seriously about state tax policy.

* Teachers: The Nevada State Education Association has brought this issue to the fore with its ballot initiative. It now sits before the Supreme Court, which may just say the atmosphere is not yet ripe for a ruling on its constitutionality. The section mandating all the money go to education, and that a 50 percent floor of the entire budget be dedicated to education, is not only politically untenable -- it's likely illegal. So the teachers either did that as a negotiating ploy -- or they screwed up. But the gamers love having this out there like a vise on the political system. If the teachers agree to sever the section from the initiative, not only will the gamers fully come on board -- that is, officially and unofficially -- so, too, eventually will Guinn. If the educators stubbornly resist any adjustments, they not only will appear avaricious, they may e nd up with nothing.

In the end, though, only one person can force the debate, and only that same person can ensure the debate doesn't happen: He's the guy who one week from Monday will tell us his version of the State of the State.