Governor not budging in bitter feud over stimulus

By David McGrath Schwartz

Sunday, Aug. 23, 2009 | 2 a.m.

Democratic lawmakers are waving the white flag, but the governor keeps firing.

To try to avoid a looming constitutional crisis over control of Nevada’s share of federal stimulus money, Democrats say that they are prepared to approve on Monday budget requests from the governor’s office that are almost identical to requests they rejected earlier this month.

Democrats, who control the Interim Finance Committee, which is considering the requests, expected their acquiescence to placate Gov. Jim Gibbons. But they have since discovered a newly aggressive and engaged administration with no apparent interest in ending the fight.

Gibbons’ office is continuing to press its case that it has complete control of the $2.2 billion the state will receive from the federal American Recovery and Reinvestment Act.

Even though Gibbons has said he will bypass the Legislature only on the stimulus money, if he prevails it could lead to the governor wielding nearly unchecked power over the budget when the Legislature isn’t in session — in other words, most of the time.

Politically, this battle has proved to be a winner for Gibbons. He has been able to blame Democrats for delaying some stimulus spending — saying they did it as payback for their union supporters — and to exceed low expectations by appointing a well-regarded candidate as his stimulus coordinator.

Democrats, meanwhile, have learned the unhappy result of breaking a cardinal rule of politics: Don’t fight with a politician whose approval rating is in the teens and who has little to lose and everything to gain.

The Legislature tried to wrest control of the stimulus from Gibbons this month, rejecting a cabinet-level stimulus coordinator position the governor requested and nixing a housing division plan to spend $10.5 million weatherizing homes.

The Interim Finance Committee has, for 40 years, served when the Legislature is not in session to approve budget changes and accept grant money. But never in recent memory has there been such a strained relationship between the executive and legislative branches.

Democratic legislators said they didn’t trust Gibbons to appoint a qualified candidate to the stimulus coordinator position and wanted a change in the weatherization plan so union-trained workers could get the jobs.

Gibbons pushed back, threatening to challenge the constitutionality of the Interim Finance Committee, and alleging it violated the Open Meetings Law and overstepped its legislative role.

Gibbons issued an executive order, creating the stimulus coordinator position, and asserted that, under state law, he could bypass the Interim Finance Committee in determining how the stimulus is spent.

On the immediate issues, Democrats appear ready to cave. Senate Majority Leader Steven Horsford praised Gibbons’ choice for stimulus coordinator, Charles Harvey, an assistant director in the Clark County recorder’s office.

Horsford also said last week that he would now approve the weatherization plan. He said this was never about a political fight.

“This wasn’t about partisanship or politics,” he said. “This is about spending this money the best way possible.”

He insists the full $2.2 billion will still need to go through the Interim Finance Committee.

Controller Kim Wallin, whose job is to process budget changes, agreed with Horsford. She has refused to process the budget changes without approval from the legislative committee and asked Attorney General Catherine Cortez Masto for clarification on state law. (Both Wallin and Cortez Masto are Democrats.)

All that means Wallin and Horsford remain at loggerheads with Gibbons’ office.

Stacy Woodbury, Gibbons’ chief of staff, said the governor has the authority to approve the spending.

She pointed to state law that says the governor can make a budget change “for the protection of life or property.” The stimulus’ tight time lines and strict reporting requirements, she said, could cost Nevada money if there are delays in stimulus reporting or spending.

“We’re not of a mind to play around with this any more,” Woodbury said. “If Kim Wallin thinks she’s doing the citizens of Nevada a favor with these needless delays, I don’t think citizens will agree with that.”

The governor’s office submitted another eight budget changes to the controller Friday.

Wallin said she will follow guidance from the attorney general. But without a requirement of IFC approval, “Any time the governor wants to go and change a budget, he can do it on his own. He can declare an emergency and say we might lose property. Where are the checks and balances there? We have three branches of government.”

It might take the third branch of government — the judicial — to settle this fight.

“If we have to take her to court and sue her to do her job, we’ll do that,” Woodbury said.