It seems like only yesterday that Gov. Brian Sandoval was riding high—coming off the Tesla giveaway with its promise of thousands of Nevada jobs, winning easy reelection in an election in which the Democrats couldn’t scrape up a credible candidate, parceling out excess campaign money to other Republican candidates, helping achieve the first Republican sweep of all state executive offices and both houses of the legislature since 1890.
Now, however, Sandoval can’t get arrested. And he might wish his party had won one fewer of those executive offices—it’s little-known State Treasurer Dan Schwartz who is taking him on most directly.
Republicans in the Legislature, particularly the Assembly, regard Sandoval’s budget recommendations as one option, a sharp change from the respect accorded most executive budget proposals in the past.
Sandoval has had a prickly relationship with the intransigents in his party. He played footsie with them in his first term as governor, running for and winning the office on a no-new-taxes pledge. But it didn’t necessarily win him their love—they defeated his candidate for chair of the Nevada Republican Party organization in 2013 and have taken shots at him from time to time, as when he sought extension of “temporary” taxes in the last Legislature, a step he wants again this year. And his failure to repeat the no-tax pledge in his second campaign raised their hackles. GOP Assemblymember Michelle Fiore has said Sandoval’s budget should go “down the drain.”
Treasurer Schwartz has equated the governor’s proposed business license tax to the margins tax defeated in the November election. “Moreover, Nevadans rejected changing the Constitutional cap on mining industry taxes in the 2014 election,” Schwartz wrote online. “In a democracy, shouldn’t elected officials respect the express will of the people?” And Schwartz has issued what he calls “alternative budget” recommendations to the governor’s budget proposals.
Schwartz’s plan was not taken seriously by budget committee members in either party—the governor’s GOP allies tore into him—but still gives the intransigents a rallying point. “He may have bungled the numbers, but they are with him, not the big guy,” said one lobbyist. The Nevada Women’s Lobby has challenged Schwartz’s plan, which is not an ally that brings the governor any gain in credibility with the GOP caucus. For that matter, Sandoval’s strongest supporters in the Legislature so far are Democrats, and they have only enough votes to stop action on taxes (under a minority control provision in the state constitution), not enough to pass Sandoval’s tax plan. In the Senate, Sandoval’s party has just a one vote majority—11 out of 21 members, not enough to pass a tax increase. Sandoval needs every Democratic senator plus four Republicans under the supermajority requirement.
To be sure, calling Schwartz’s recommendations an “alternative budget” is like describing Archie Comics as Moby Dick. It’s only three pages long and deals with state spending in the broadest terms, not including the culling and cutting governors and legislators must do. Article 4 of the state constitution makes the executive budget recommendations (including those for the state treasurer’s office) a function of the governor, leaving the treasurer with no part in the process at all, so Schwartz’s budget falls in to the “Who asked you?” category. In addition, it returns to the other-people’s-money approach, using an air travel fee that would make Nevada’s revenue sources still more unstable and unpredictable and is probably illegal under federal law.
But as a challenge to Sandoval, it seems to have gotten Schwartz plenty of ink, and made him a momentary rallying point for Republican critics of the governor—including State Controller Ron Knecht, who jumped onto the Schwartz alternative bandwagon. (One legislative budget committee member said Schwartz’s budget for the treasurer’s office was “just as poorly constructed” as his alternative.)
Schwartz ended his “alternative budget” with the phrase, “We look forward to working with the governor and legislature …” The sentiment was not returned.
Make or break
Political analyst Fred Lokken said that if Sandoval does his job and uses a governor’s normal behind-the-scenes advantages, his power will return.
“It may still be there,” Lokken said. “The new Republican legislators believe they somehow received a mandate from the votes on Nov. 4, and they can flex their muscles. But these [new legislators] are a lot of inexperienced people that are backed by a broken state Republican Party.”
He said what the governor is aiming at with his tax plan is more revenue, and if that’s what comes out at the other end of the Legislature, Sandoval will be able to claim success, even if the final tax package is not what he proposed.
“It may not be this tax,” Lokken said, his voice giving the emphasis. “I don’t know that it’s DOA, but it’s certainly a controversial tax.”
In 2003, when Gov. Kenny Guinn proposed sweeping changes in the tax system, he did not get the tax he wanted—a business gross receipts tax—but he did get most of the revenue he wanted, after legislators substituted a modified business tax. But Guinn’s fellow Republicans—the intransigents of that year—blocked action through the regular session and two special sessions before it passed. Then as now, the party came second to ideology with some GOP members. (An alternative budget produced in 2003 by Assembly Republicans was more detailed than Schwartz’s document.)
Though it has been given little news coverage, both the governor and the state have a lot riding on this legislative session. Lokken said defeat of Sandoval’s program would create terrible political problems for the rest of his term.
“If the governor is not successful, this will be the collapse of his governorship.”
And it won’t be any better for Nevadans, he said. If Sandoval’s program stalls, “The legislative agenda is shot to hell. The governor’s agenda is shot to hell. Economic development would fall apart. This is one of the highest stake [legislative] sessions in the history of the state of Nevada.”
Investors and businesses mulling a move watch these things, he said.
“Recession and cuts have made this the smallest state government in the United States,” Lokken said. “State workers haven’t had a raise in 5 or 6 years. They are overworked. Morale could not be lower. They’ve waited for light at the end of the tunnel. We can expect a slide in the quality of our state government if things don’t change. … State government is hanging on by a thread.”
That would play into the hands of the anti-government intransigents, who like it when government doesn’t work. But the intransigents won’t gain much by blocking Sandoval, Lokken said.
“If this session turns out to be a disaster, I assume it will be put squarely on the backs of the conservatives.”
The business community might not fare much better. Though business spokespeople have been saying for a decade or more that they are willing to accept a new tax system, they have defeated two such plans sponsored by the state teachers—one in court, the other at the ballot box—and have been grumbling about Sandoval’s approach and encouraging Republican legislators looking for a different approach.