Las Vegas Sun

July 23, 2014

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MEMO FROM CARSON CITY:

Will stimulus bill bail out faint-hearted state leaders?

The past few months here have felt like the buildup to something historic.

The legislative session, which begins Monday, was going to be a time when the baling-wire-and-chewing-gum solutions of the past would no longer work and tough public policy decisions would finally be forced on lawmakers.

Then President Barack Obama comes in and tells us not to bother. We can make tough decisions about our state later. Maybe.

The anticipation of the grand 75th Session of the Nevada Legislature was deflated by the federal stimulus package known as the American Recovery and Reinvestment Act, which the Democratic Congress is expected to enact.

“The federal economic stimulus is a bailout for politicians who now won’t have to make tough decisions,” an observer of state government said. This observer predicted legislators and the governor will eagerly accept the money — $512 million in play money, hundreds of millions more for social programs, transportation and education — study the state’s fiscal problems for the next two years and call it a day.

Before the proposed rescue, the session was to be what one lobbyist called an orchid in the mud. Out of the swampy ooze of billion-dollar budget shortfalls and excruciating cuts would emerge a beautiful piece of sound public policy to prevent such situations in the future.

There’s plenty of ooze: An epic economic collapse led to a budget gap so large that it would take both the largest spending cuts in state history and the largest tax increase in state history to bridge it. Even conservative Republicans are saying some of the cuts in Gov. Jim Gibbons’ proposed budget go too far.

The orchid that would grow from that mud varied, depending on political leanings.

Democrats and moderate Republicans have wanted to change the state’s tax structure so businesses carry their fair share of the burden. Liberals wanted the mighty mining companies to pay more. Those concerned about ballooning future costs of public employee health benefits and pension systems wanted changes. Conservatives wanted accountability standards for teachers.

On the other side, the diminishing number of anti-tax purists regarded this as the time to further limit government’s reach in Nevada.

This was supposed to be the year those issues — which have been avoided for so long — were dealt with.

To be in Carson City, around the governor’s executive staff as they were preparing the budget, talking to legislative leaders about their grand plans, was thrilling for policy wonks. There was a sense that the looming decisions would help shape the state and be analyzed and debated for years.

Democrats have hammered Gibbons’ budget. They say they will offer a bold new vision at some point.

But why bother now? Obama has taken care of it.

To be sure, there is a chance that the desire to make the politically tough decisions will persist even if the federal government lets the state off the hook.

Some optimists say that regardless of what the Legislature does, change will come.

“The problem is much bigger than what the federal government can do for us through a one-time stimulus,” said Assemblywoman Sheila Leslie, D-Reno. “There’s a growing recognition, even among conservatives, that we have to change the way we do things.”

Count Hugh Anderson of the Las Vegas Chamber of Commerce among the optimists. He called the federal stimulus a “Band-Aid.”

“It should not be used as a smoke screen to avoid addressing these problems that really need to be addressed,” Anderson said.

For a story on the history of taxation in Nevada published last week, the Las Vegas Sun spent months sifting through old newspapers and poring over reports on the state’s tax structure. With a few exceptions — namely 1955, when the gaming tax was doubled and an anti-tax governor signed the bill instituting a sales tax — history says it’s a long shot that lawmakers will make the tough decisions to avoid similar troubles in the future.

In Nevada, public policy is made like water flows — downhill, along the path of least resistance.

In 2009, that would be a resolution thanking the federal government for passing a stimulus package.

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