Gov. Brian Sandoval unfazed by opposition to his budget plan

By David McGrath Schwartz

Sunday, Feb. 6, 2011 | 2:01 a.m.

For months during his campaign for governor, Brian Sandoval promised to reveal how he would close a multibillion-dollar deficit without raising taxes.

The election came and went without him showing his hand. And voters overwhelmingly elected him anyway.

Finally, last month he showed how he would balance state spending — with deep cuts in state services and some financial gimmicks to add revenue to the budget.

Conservatives have rallied around his proposal.

But it also became evident why he hadn’t revealed it earlier: Legislative hearings on the budget have brought out critics protesting cuts in K-12 schools, higher education and services for the poor, disabled and elderly.

Tension over whether Sandoval’s cut-only approach is best will dominate the 2011 Legislature, which convenes Monday.

The Sun sat down with Sandoval in the Capitol last week to discuss the budget and other issues confronting the state.

He vowed to stand by his budget, explained why businesses can afford to donate $4 million to his campaign but not pay more in taxes, and emphasized that the state needs to set a higher bar for economic development.

The interview has been edited for clarity and space.

It has been a little over a week since you released your budget. Since then, the Legislature has held hearings on it. Have you heard any of the testimony?

Sandoval: I’ve briefly watched. My TV (in the Capitol) doesn’t work. And I’ve been busy with all the other responsibilities. I’ve obviously been following it in the media.

There are some tough cuts in your budget. Some tough stories people have told about the impact. Have you seen anything that makes you rethink or want to adjust your budget?

It’s part of the process. We’ve had five weeks to basically redo the entire budget. I fully expected and respect that there was going to be some disagreement with the budget I presented.

There are some great stories to tell too. We’ve undone about $120 million in cuts to health and human services proposed by the previous administration.

There are some legislators who have ideas with regard to the budget, and balancing it in terms of not raising taxes. I’d support that.

It’s a reasonable budget. We worked extremely hard on balancing all the interests, with regards to education, higher education and health and human services. We worked hard to mitigate some of the reductions. I’m very proud of the budget.

Autism advocates complained about the cuts. Their stories are very emotional.

They should be. Again, these were not easy decisions. With regards to autism, we preserved most of that. We put most of that back in.

You’ve talked of shared sacrifice. But a lot of people at Jan. 29’s town hall accused you of sparing business from sacrifice. Can you explain how business sacrificed or will sacrifice?

Gaming has taken a $3.5 billion loss this year. Our unemployment has ticked up. Small businesses are barely hanging in there. They’re barely making payrolls. I just met with a gentleman today who said a lot of companies want to hire people, but they’re unsure if their taxes are going to increase. Are they going to be penalized, or taxed more, if they hire more employees? They want to see what the tax policy of the state is.

This would be the worst time to raise taxes on business when we lead the country in unemployment, bankruptcy and foreclosures. Unemployment taxes have gone up. Health insurance has increased.

They are doing their fair share. They’re keeping people employed, they’re doing the best they can. At the end of the day, that’s what’s most important — keeping people employed.

You were able to raise $4 million for your campaign. You were able to raise money for your inaugurations. Many of the donors were the businesses you say can’t afford to pay higher taxes. Some, it would seem, do have money.

(Laughs) I don’t know if that’s a fair apples-to-apples comparison. My opponent raised $2 million more than I did during the campaign. I think I raised only half of what the previous governor raised (in 2006).

I don’t know if you can correlate campaign contributions to the economy of the state of Nevada.

People have their constitutional right to contribute to a campaign and if they have discretionary money that they want to contribute to a candidate, whether a Republican or a Democrat, they should be able to do so.

You talked about economic development in your State of the State address and you’re working with Senate Majority Leader Steven Horsford and Assembly Speaker John Oceguera on that. Are you confident in the state’s ability to attract businesses with the message “no new taxes”?

First, I’m looking at the structure of this new economic development entity.

And I guess we have to rename it because someone reserved the name — Nevada Jobs Unlimited — on the Internet after I announced it at the State of the State. So we’re going to ask for the assistance of the universities and high schools to have a contest to see if we can rename it.

But this entity will be accountable to make sure we’re getting a bang for our buck.

I increased funding for economic development by 50 percent because it is going to be a priority.

But you have the Senate majority leader saying, “I don’t think we should use this message of low taxes to lure businesses anymore.” Do you feel like we need to change the message: “Come to Nevada if you don’t want to pay taxes”?

I think that has always been one component of the message that has been sent out. We’re a business-friendly state, we have a high quality of life, we’re going to have a friendly regulatory environment and those things.

We can’t provide some of the incentives that the other states do because of our Constitution. But it’s going to be a combination of factors that are going to attract business to Nevada. Primarily of which, I believe, is we’re a business-friendly and low-tax state.

Do you think we have a high quality of life here?

I do. This is a great place to raise a family. This is a state with citizens who are very proud. We’re engaging in improving education. We’ve hired two new superintendents, both north and south, who are committed to improving the delivery of education in the state. There’s a recognition that economic development has to be a priority and that as a state we have to engage. As governor I’m doing whatever it takes to ensure that the respective state departments are responsive to the people of Nevada.

Sen. Dean Rhoads, R-Tuscarora, said he would consider raising taxes. It’s not a secret that some groups on the left are trying to pick off members of the Republican caucus so they can pass a tax increase. How will you keep members of the Republican caucus together and pass your budget?

There’s a very solid commitment from both the Senate minority leader and Assembly minority leader that they’re very supportive of my budget. They’re not supportive of raising taxes.

Majority Leader Horsford said he’s not going to process a budget with the cuts you’ve proposed to education. That’s a strong line in the sand. Are we heading to another 2003-type session, when there was a standoff over taxes? How does this end?

If I had a crystal ball, I’d tell you.

It’s no surprise there’s disagreement on the budget. The session hasn’t even started yet. We’ve pledged to work together on economic development and education reform, which are two big pieces, and we have reapportionment as well.

This is what the process is all about.