Las Vegas Sun

March 29, 2024

jon ralston:

Will the legislative train run on time or crash?

With apologies to Tolstoy, happy legislatures are all alike; every unhappy legislature is unhappy in its own way.

Granted, few legislatures are convivial in any way. But those that focus on proposed tax increases tend to be the bleakest — 2009 was relentlessly fun-challenged, and 2003, with two special sessions and a seminally awful court case, was more reminiscent of Dickens than Tolstoy. (“It was the worst of sessions …”)

But all legislatures seem to, like “Anna Karenina,” involve climaxes with trains, if not a derailment, then an outright wreck. And Session ’11, with three weeks and a day to sine die, seems destined for an all-too-familiar denouement, with disappointment the best feeling that might be summoned June 6 (or beyond).

The Democratic leaders have put everyone on a roller coaster of emotions worthy of a great novel this session — going from war at the beginning with Gov. Brian Sandoval and his GOP allies to peace offerings as the session ebbs. But because they waited so long to release the most revolutionary changes to the tax structure in state annals, allowing GOP votes to become hardened in the process, they have little chance of achieving much beyond what we have seen so many times before: A cobbled-together revenue package, targeted at a number rather than a policy, with bartering going on that would make Sue Lowden proud.

But this is not about chickens for checkups — it’s about Democrats providing the kinds of reforms in education and public sector retirement benefits that will infuriate their most fervent allies and hand Republicans long-sought victories. And for what?

Conventional wisdom says the best the Democrats can hope for is to somehow persuade enough recalcitrant Republicans to lift $600 million-plus in sunsets on sales and payroll taxes to get to funding levels needed to restore programs.

So: The Democrats would be willing to sacrifice their visionary tax plan ($1.2 billion in all) to lift sunsets on taxes they abhor in a trade for GOP votes purchased with reforms their union allies see as anathema?

Perhaps.

This is a Catch-22 on the sunsets: Democrats didn’t want them when then-Senate GOP Leader Bill Raggio demanded they be affixed to make the tax increase more palatable in 2009. But as they argue for them to be removed, the Democrats are willing to demonstrate their word means little and their argument — removing the sunsets is not a tax increase — means less. A tax cut expected is a tax increase imposed.

This is the box they have created, leaving three possible endgame scenarios:

One, they give up enough to the Republicans on their reform agenda that at least three GOP senators and two GOP assemblymen support a tax increase. Sandoval would then veto the plan, and lawmakers would override him.

Two, the Democrats execute what I call the White Flag Strategy, surrendering to the inevitability of the Sandoval budget and give eleventh-hour polemics insisting the governor must wear the consequences. They pass his budget and go home June 6.

Three, the Democrats decide to play hardball and don’t pass a budget. Sandoval dismisses them June 6 and lets them stew for almost a month as they try to stir up opposition, then he calls a special session shortly before the end of the fiscal year June 30 and tries to impose a solution. This is the unhappiest scenario of all.

At the end of last week, the Democrats held hearings on their tax plans, with few surprises and much we have seen before. The Las Vegas Chamber of Commerce folks reiterated their support for taxes if (you can’t put enough emphasis on that word) lawmakers pass public benefit reforms. Gaming and mining supported the new margin tax (they also will back the new transactions tax) because they don’t like industry-specific taxes — especially when they are the specific industries. And labor leaders threatened to go to the ballot with taxes if lawmakers didn’t pass the Democrats’ plan, causing some Republicans quietly to say: Bring it on.

The 2003 session ended with a monstrosity of a tax plan, with enough votes for an $836 million, Frankensteinian package anchored by the payroll tax Democrats want to eradicate (as it should be). There was no policy underpinning, it took forever and it was an excruciating train wreck to watch.

The Democrats have less margin for error eight years later as they try to pull off this vote-buying transaction. In 2003, the GOP governor (Kenny Guinn) was with them; this year, he is a formidable impediment, the Democrats are less unified and the partisan matrix is less friendly.

One more thing about legislative sessions: They all end ugly. This one will be no different. Just a matter of degree.

I forget: How does Anna Karenina deal with that onrushing train?

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