Las Vegas Sun

March 28, 2024

Governor’s office can be pushed only so far

By the time Gov. Jim Gibbons unveiled his transportation plan last month with a news conference that should have been a high point of his young tenure, his proposal was all but dead.

The powerful Nevada Resort Association, which represents casino interests, already had an opposition game plan in place with a bi partisan group of influential legislators as allies.

The vast majority of the gaming industry opposed Gibbons' plan, which would have diverted $424 million in hotel-room tax money from the Las Vegas Convention and Visitors Authority to building roads. That would have eaten into the LVCVA's advertising campaign that promotes Las Vegas and the Strip.

A public campaign against the diversion scheme was merely the final crushing blow . The plan had been taking a beating behind the scenes for some time.

This story, which was told and confirmed by a number of lobbyists involved, is instructive in how the gaming industry influences affairs in Carson City. But it also shows how even gaming's clout can be overcome with the considerable power and influence vested in the governor's office, no matter its occupant.

Finally, Gibbons' move in the face of considerable opposition shows the new politics of Carson City, which, in partisanship and showmanship, resembles Washington, D.C., more than the sleepier, consensus hungry ways of Carson City's past.

The first step in defeating Gibbons was to get a true read on the Strip, according to a number of lobbyists who wished to remain anonymous so as not to embarrass the governor or their clients.

MGM Mirage chief Terry Lanni was an early and vocal opponent of diverting the money. Steve Wynn was next, and soon it became apparent the only property supporting the plan was the Venetian, whose owner , Sheldon Adelson , is a long time opponent of the LVCVA. Among other things, he sees it as unfair quasipublic competition with his convention space. Adelson was one of Gibbons' biggest campaign donors and gave to his legal defense fund.

Adelson's stance allowed gaming lobbyists to frame the room tax diversion debate as little more than the personal grudge of the Venetian owner, long the bete noir of Nevada Democrats.

His political proxy, Gibbons, is just doing Adelson's bidding, they sniffed.

That message prevented Gibbons from making a compelling case that he was a true maverick going against the wishes of the Strip because, at the same time, he was proposing a wish-list of the third richest man on the planet.

Robert Uithoven, a Venetian lobbyist who ran Gibbons' campaign, acknowledged he faced an uphill battle given the perception of what was happening, although he denied the governor gave Adelson special treatment. He said he, like many others, was invited to share his ideas with the governor, and he did.

Still, the opposition was intense. Uithoven said he doesn't think the Venetian had experienced that kind of response since it argued against building the monorail, saying it would fail to make money. "Who was right then?" Uithoven quipped. The monorail is a financial failure.

Gibbons also failed to round up legislative support for his plan.

Republican Senate Majority Leader Bill Raggio has a 30-year relationship with gaming interests.

For Democratic Assembly Speaker Barbara Buckley, one lobbyist said, it was a "political no-brainer" because the plan came out of the governor's office and was thought to be the work of Adelson, who is the arch-enemy of another Buckley ally, organized labor, which hates Adelson for his long fight against union-friendly candidates and policies.

Meanwhile, Buckley has forged a close relationship with Strip interests since supporting them in the 2003 tax fight. Opposing Gibbons' plan was another way to draw closer to them. She has her own political future to think about, including a potential run for governor, which would likely require the money and the political support of Strip players.

Her opposition was fatal. Buckley ran the most disciplined caucus anyone has seen in years, which meant with her on board, she could deliver her 26 charges.

Democratic Senate Minority Leader Dina Titus, motivated by much the same forces as Buckley, also lined up against the plan.

For her part, Buckley said in an interview that the real reason for her opposition was that it came late in the session, without any consultation with legislators, and that it was wrong on two counts: In addition to the room-tax diversion, the plan would have taken money from the entertainment tax currently allotted for the general fund during the next biennium. That in turn would have left a hole in the budget.

Buckley also said some of the money to be diverted from the LVCVA was already earmarked for expansion.

Here, she refers to a key legal opinion written by John Swendseid, the state's well-respected bond counsel, who said the governor's plan was likely illegal because bonds sold for expansion and renovation of the Las Vegas Convention Center were rated by certain financial assumptions, which the governor was destroying.

It was a compelling argument, while also making the governor's plan look sloppy for not being legally vetted.

All told, the governor's approach "was an unorthodox way to build consensus," one Republican lobbyist said. "I've not seen a plan launched that way."

For the governor, matters only got worse once he officially laid out the plan.

Lobbyists for R&R Partners, the LVCVA's advertising firm, were a regular presence in the Legislature's press room and halls, with charts and graphs and new arguments in tow.

They and Rossi Ralenkotter, the Convention Authority's chief executive, said it needed money so Las Vegas can compete with other convention cities and market internationally to fill all the new hotel rooms coming online. "We made everybody aware you could impact our ability to do our mission, which is to fill rooms in Clark County," Ralenkotter said.

No doubt these arguments resonated with legislators whose constituents rely on tourism for their livelihoods. Opponents of the plan decided to make Las Vegas Mayor Oscar Goodman, who is chairman of the LVCVA, their main spokesman. It was a natural fit, given his position and his popularity in Southern Nevada. As they expected, he went over the top. But still, his strong statements at a well-timed LVCVA board meeting gave the opponents a needed megaphone.

When all was said and done, the governor had trouble getting his bill introduced, let alone adopted.

Still, he was successful in his own quirky way, landing $1 billion for road building without raising taxes.

Tray Abney, Gibbons' chief lobbyist, said consensus was never the point. The point was to kick-start the debate, and it worked.

The governor's team was operating an "outside-in" strategy, attempting to bypass the Legislature and go straight to the public. It's a strategy often deployed in Washington, D.C., as a way to punch opponents in the gut while also riling up the partisan base.

"For years in the Legislature, there's been conciliation, people patting each other on the back, and we're getting away from that," Uithoven said.

Tellingly, much of Gibbons' staff, including Abney, worked on the governor's Washington staff when he was in Congress.

Regardless, with the power of his veto-pen, Gibbons could set the parameters of the debate. Specifically, there might be new roads, but there would be no new taxes. Garnering two-thirds of both houses to override a veto for new taxes was judged politically impossible.

As the debate continued, Buckley was convinced that she had to produce something to ease transportation woes, lobbyists said.

And the gaming industry also decided that doing nothing was not an option. Expansion of Interstate 15 had to happen, they concluded.

And with that, the negotiations began anew.

The final proposal, which has the LVCVA giving up $20 million per year and the rest coming from car-rental companies, and, most significantly, Clark County, is nothing like what the governor proposed, but what matters is that it's a plan he can put his name to that doesn't raise taxes.

Trucking, taxis and many other industries that use the roads to make money were not forced to contribute, showing the leverage those industries have when they can cite a governor's pledge not to raise taxes.

The 2009 session could very well see another debate on transportation funding, which is still billions shy of what's needed by 2015, according to transportation experts.

A number of lobbyists said those industries which escaped without contributing this year will be brought along, "willingly or unwillingly," as one lobbyist put it.

But this seems overly optimistic for anyone thinking he can force more out of the truckers or taxis. The governor and his no-tax pledge will still be around in 2009, barring an unhappy ending for him as the FBI investigates his relationship with a defense contractor.

In other words, the real lesson of the session's transportation saga is this: Elections matter.

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