As Democrats stand down on taxes, Sandoval wins the day on budget

By Andrew Doughman

Tuesday, May 28, 2013 | 2 a.m.

Nevada’s legislators are somewhat begrudgingly closing down this year’s legislative session with a budget that looks pretty close to what Gov. Brian Sandoval proposed in January — a budget Democrats say doesn’t do enough to repair the state’s education system after cuts incurred during the recession.

Although legislators have tweaked the budget here and there, nothing but the nascent economic recovery appears poised to increase the size of state government in Nevada.

For a governor who has promised no more and no less than what the economy will deliver, the extra money available this year has allowed him to declare victory in short form: more money for education, no new taxes.

Meanwhile, Democrats pledged to fund education priorities on the magnitude of $310 million above Sandoval’s budget, but their reach for the stars may be as wobbly as the Tower of Babel.

Senate Majority Leader Mo Denis, D-Las Vegas, proposed a payroll tax increase that Democrats dramatically withdrew last week in a finger-pointing debate about leadership. Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, introduced a sweeping change to the state’s live entertainment tax that Sandoval pledged he would veto.

Democrats control both the Senate and Assembly, but they could not muster the two-thirds vote necessary to pass a tax increase and override a veto from the governor.

This leaves the Legislature largely in a position to go through the motions of shutting the session down and accepting the spending level the governor wants.

“If I were a betting guy, I would say we are probably going to get out, in terms of the overall numbers, what the governor has recommended in his budget,” said Assembly Minority Leader Pat Hickey, R-Reno.

Democrats and their supporters say they influenced Sandoval to do what they wanted. Sandoval has shoveled about $120 million into the state education system for new programs such as expanded full-day kindergarten, a class-size reduction in kindergarten, and first-time funding allotted for English-language learner programs — all programs Democrats have been fighting for.

“The governor is probably a winner,” said Billy Vassiliadis, a Democratic adviser and lobbyist with R&R Partners. “He can say they found additional money, reduced class sizes and funded ELL. He comes out of this pretty well.”

Because those programs have been Democratic priorities, Democratic legislators are largely pleased with what the governor is buying with state dollars. They just object to how much he is spending, arguing the education system is in such dire straits that a larger injection of money is needed. Democrats also would like to do more to restore salary reductions imposed on state employees at the onset of the economic recession.

“We’re pretty together on the priorities; it’s just a matter of how much you put where,” said Sen. Debbie Smith, D-Sparks.

The governor held a press conference earlier this month declaring that his budget plan recommends spending about a half billion more dollars on education than his current budget. (That’s inclusive of the $120 million for new education programs.)

With Republicans leaders Hickey and Sen. Michael Roberson flanking him, Sandoval also vowed to veto Democratic tax plans that would’ve immediately brought in more money for education.

Because of the two-thirds vote requirement to pass a tax increase, the Democrats would need one Republican member of the Assembly and three Republican senators to vote with them to override Sandoval’s veto.

For some people involved in the legislative process, the two-thirds majority requirement for taxes is a sign of a dysfunctional system that stumbled through the contentious, drawn-out tax increase fight in 2003 and resulted in the 2009 patchwork of tax increases that fended off the worst effects of the recession.

“The way the system is set up is broken,” said Craig Stevens, lobbyist for the Nevada State Education Association, the state’s teachers union. “The two-thirds requirement prevents anything from getting done.”

The sentiment runs through the whole of the teachers union, which bypassed the legislative process to put a 2 percent business-revenue tax on the 2014 ballot.

Rather than spurring legislators to action, however, the looming threat of a big tax increase on the ballot made legislators reticent to take action on any revenue proposals this year.

The result: no big tax increase or tax restructuring in the Legislature.

But some legislators aren’t upset about that.

“I’m proud of our governor,” Roberson said of the the governor’s recommendation to put new revenue toward education. “It’s pretty clear that the budget that’ll be passed will be very close” to the governor’s recommended budget.

With Republicans not assenting to tax increases, Democrats have still been able to push other planks in their agenda. They’ve passed a popular measure to remove the constitutional mining tax rate and took the first steps to amending the constitution to legalize same-sex marriage.

To bypass a Sandoval veto from 2011, Kirkpatrick has sponsored a third constitutional amendment that would cap emergency room costs. The Legislature would have to pass Assembly Joint Resolution 9 this year and again in 2015 before voters could decide to approve or vote down the measure in 2016; the governor is never involved in the process.

Democrats also have pushed policy changes this year, including a gun background-check measure from Sen. Justin Jones, D-Las Vegas, and a major energy-overhaul bill from Sen. Kelvin Atkinson, D-North Las Vegas.

“As long as there’s a focus on the good things they’ve done, they can walk away looking good,” Vassiliadis said.

Those bills and others still need to pass during the final seven days of the legislative session.

Legislators also need to pass the big budget bills that keep government chugging along.

In the meantime, legislators will need to settle on compensation levels for state employees, and Republicans may make a bid to get more money for rural community colleges, which are facing an 11 percent annual budget cut during 2014 and 2015.

Legislators will need to make these decisions soon because there isn’t much time left to draft the final budget and adjourn on time, June 3.

“There’s mechanics and there’s strategy, so you have to get everything going together down the same path to close it down,” said Assemblywoman Maggie Carlton, D-Las Vegas.

Even with the remaining points of contention, legislative observers say that the budget will likely look very similar to what the governor proposed. And Democrats are trying to put their best spin on it.

“It looks like a (governor’s recommended) budget because we agree on the priorities,” Smith said. “I like to say he funded our priorities.”