Session evaluation: A winner, a loser, but mostly a wash

By J. Patrick Coolican (contact), David McGrath Schwartz (contact)

Sunday, June 7, 2009 | 2 a.m.

When the boat has a gaping hole in it, no one on board is having much fun on the shuffleboard court.

And so at the Nevada Legislature, which adjourned last week and suffered through the worst fiscal crisis in state history, there were few winners. Mostly everyone just tried to get out of there alive, and for the most part, they did.

“I don’t know if anyone can raise a victory flag,” said state Sen. Warren Hardy, R-Las Vegas. “The reality is, taxes go up, services cut.

“We didn’t dismantle the state, we didn’t decimate higher education. But I don’t know you come out and run for another office and tout something, other than you did your best to keep the state running,” Hardy said.

Herewith, a review of who won, who lost, and who survived to fight another day.

Gov. Jim Gibbons

As promised, the first-term Republican vetoed the tax and spending plan, as well as a record number of other bills. He was overridden a record number of times, too, owing to his lack of political capital with fellow Republicans.

Gibbons may have won points with the most hardened conservative Republicans, but he has no money, questionable political advisers and basement-level poll numbers.

He put a hotel room tax increase in the budget and then let it become law without signing it, claiming this meant he kept his no new taxes pledge. The episode, along with a later claim that he was responsible for holding the line on taxes, won him no friends among Senate Republicans, especially.

Assembly Speaker Barbara Buckley

She survived, and that was something. Buckley meticulously built momentum for the tax increase by holding public hearings on Gibbons’ budget and showing that it was untenable. (He proposed cutting state worker and teacher pay 6 percent, and a 36 percent cut in higher education.)

She built support in the business community and got about $1 billion in sales, payroll and hotel room taxes, preventing cuts that would have been devastating.

Liberals in her party came away unhappy, however. They wanted more money, as well as fundamental tax reform to make the system more stable and progressive (meaning poor people pay less, rich people pay more.) She will have to reach out to progressives if she hopes to win a Democratic primary for governor.

Majority Leader Steven Horsford:

The new majority leader, the youngest and first black leader in state history, won praise from colleagues in both parties. He walked an interesting line, siding with big developers in the drive to limit construction defect lawsuits, while pleasing progressives by pushing for a corporate income tax.

He was no pushover, but he was also very gracious to Minority Leader Bill Raggio, the Reno Republican with three decades of experience whom Horsford replaced as Senate leader when Democrats took control of the chamber last year.

He won a big victory by securing funding to reopen West Las Vegas’ F Street, which had been closed, blocking access from this historically black neighborhood to downtown.

Neither his corporate income tax plan nor his education reform plan survived, but he will come back in two years, perhaps with an even bigger majority, ready to fight another day.

Senate Republicans

Because Horsford needed two votes to get a tax package, the Republicans had significant leverage, and they used it.

They set the ceiling on taxes, made sure they sunset, and placed conditions on their votes.

They demanded changes in public employee retirement and health benefit systems, which will reduce long-term liabilities. They also won changes to the collective bargaining process for local government employees, giving local government slightly more leverage in dealing with their unionized workers.

Raggio, in particular, burnished his reputation as a skilled player, even at age 82. He was relentless on the sunsets, and Horsford had no choice but to give.

On the downside, Republican primary voters can be unforgiving on Republicans who raise taxes.

Far left, far right

Neither got anything it wanted, as moderation ruled the day. Liberals wanted more taxes and fewer cuts, conservatives wanted no new taxes.

Local governments

They are big losers, as the state grabbed local government money.

Special interests

Banks made loans to people who could not repay, developers built houses that should not have been built, and overleveraged gaming companies made bad bets. So who gets hit at the Legislature? Public employees!

The Greater Las Vegas Chamber of Commerce played it smart, paying for a study last year to show that local government employees are paid well above the national average, while illustrating the long-term liabilities of public employee health and retirement benefits.

The chamber agreed to a tax increase in exchange for changes in benefit and pension systems.

State workers will take pay cuts, and local government employees lost a bit of leverage in their collective bargaining negotiations.

Union nurses lost an effort to get mandatory staffing ratios.

The gaming industry was saddled with a 3 percentage point increase in the hotel room tax.

Developers lost in their effort to limit construction defect lawsuits.

Trial lawyers were unable to remove the cap on medical malpractice.

Teachers did OK, all things considered, as K-12 funding was protected. Professors did less well, as the university system will take a 12.5 percent cut.

Mining

The only real winner of the session?

That would be mining. With the help of more than two dozen lobbyists, and an assist from U.S. Sen. Harry Reid, who made it known he wanted mining protected, the industry’s record-breaking profits did not lead to a tax increase.