Las Vegas Sun

March 19, 2024

Memo from Carson City:

Four state budget scenarios — none pretty

The 2011 Legislature begins Monday. This, in a word, is how it likely ends 120 days later: ugly.

In the face of a $2.2 billion budget deficit, Gov. Brian Sandoval has promised not to raise taxes and produced a budget that accomplishes that with cuts and sleight of hand.

Democrats, who control both houses of the Legislature, and their allies have launched a public-relations campaign against Sandoval’s budget: The cuts — 9 percent to K-12 schools, 17.66 percent to higher education — will do irreparable damage to the state, they argue.

How does this tension resolve itself and the Legislature pass a budget?

Here are four possible scenarios:

Democrats roll over, pass Sandoval’s budget

Democrats and others opposed to Sandoval’s spending plan hold 120 days of hearings hammering at its cuts in an attempt to chip away at Sandoval’s popularity. In the end, though, Democratic leadership can’t gather enough votes to pass a tax hike, which requires a two-thirds vote by the Assembly and Senate, and are stuck with the governor’s solution.

• Why this happens

Sandoval is popular. He received the most votes of any statewide candidate in a contested election in November, and voters gave Republicans new seats in both state houses. He and his allies can argue voters sent a message that they wanted government to live within its means. They can also argue that the cuts can be blunted if teachers and college professors take pay cuts.

Adding to Sandoval’s effectiveness: He has a personable style and promised to be engaged in the budget debate. Plus, traditionally Nevada governors control the budget, with legislators only tinkering at the edges.

Democrats could allow Sandoval’s budget to pass, surrendering this fight for long-term victories. The political calculation would be that an angry public would place blame on the governor for the cuts, building a case for Democratic candidates in 2012.

• Why this doesn’t happen

Democrats really don’t like Sandoval’s budget and have some powerful allies in moderate Republicans and big business interests such as gaming and mining.

Democrats will be motivated. If they fail to pass an alternative, they will have to answer to angry interests such as teacher and public employee unions that have helped get them elected.

Democrats get Republican support, raise taxes

To blunt the impact of Sandoval’s proposed budget, Democrats raise taxes and override a gubernatorial veto. This will require 14 votes in the Senate and 28 in the Assembly.

Democratic legislators were able to reach those thresholds in 2009, using concessions on public employee benefits and other key conservative issues to win Republican votes for a $1 billion tax increase over the veto of Gov. Jim Gibbons.

• Why this happens

Republicans such as Sen. Dean Rhoads have expressed concerns about Sandoval’s cut-only approach, saying a combination of cuts and tax increases will be needed to balance the budget. Other moderates want a balanced approach too, even if they are reluctant to say so publicly.

Democrats could hold hostage cherished conservative reforms — in teacher tenure, public employee pay and benefits, and collective bargaining — unless Republicans vote for a tax increase. And they can use redistricting as further leverage.

Additionally, Democratic leaders have been working hard to get Nevada’s big-business interests on board with a tax increase, including mining, gaming and the Las Vegas Chamber of Commerce. These groups could provide cover for Republican lawmakers who vote against Sandoval’s budget.

• Why this doesn’t happen

Sandoval is no Gibbons.

Gibbons invited opposition with his disengaged yet cantankerous style. Sandoval is well-liked, even by those who oppose his policies.

He provides a rallying point for Republicans and conservatives, and his no-new-taxes position got a mandate from voters in November.

Going against Sandoval seems like a sure way for a Republican to damage his political career.

Sandoval compromises on taxes

Legislating is about compromise. Despite his rhetoric on taxes, Sandoval could agree to either extend the $680 million in taxes that will sunset this year or replace them with other revenue to lessen the cuts in his budget.

• Why this happens

Sandoval is a caring human being who doesn’t want to go down as the leader who dismantled the state’s education system.

He was mentored by Republicans such as former Gov. Kenny Guinn and former state Sen. Bill Raggio — both compromisers — who wanted Nevada’s government to be lean but not mean.

• Why this doesn’t happen

Sandoval’s campaign pledges have put him in a small box, and he’s given no indication he’s willing to step out of it. He has promised to veto any budget with a tax or fee increase and vowed not to allow taxes passed in 2009 to be extended.

Both privately and publicly, Sandoval preaches the need to protect business during the recession.

Breaking his promise not to raise taxes or extend expiring taxes would jeopardize his political future, whether that’s his re-election to a second term in 2014 or a move to the a national stage.

Stalemate

The 120 days come and go with the Legislature unable to pass a budget.

Democrats won’t pass the governor’s cuts. Republicans won’t pass a tax increase.

It’s a standoff. The new fiscal year comes and goes on July 1 and state government faces a shutdown. Schools won’t open on time. The Supreme Court steps in as it did in 2003.

• Why this happens

Democrats are entrenched. They don’t want cuts. Sandoval and Republicans are equally entrenched, believing the cuts need to happen.

• Why this doesn’t happen

It probably does.

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