Sunday, May 15, 2011

Doomed? Damned? Or Deal?

Reading Ralston this morning, it's easy to feel like this state is somehow doomed.

This is the box [Democratic legislators] 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.

So what to do now? Are we doomed to Sandoval's budget of butchery? Or can we at least resign ourselves to another 2003 or 2009 style cobbled together budget of fiscal "band aids" and "quick fixes"?

Maybe. Or maybe it's too soon to declare "game over".

The public has packed hearing rooms—often with the help of Democratic organizers—to protest the cuts to education, social services and state worker salaries.

Many of those same people have testified in support of the tax increases proposed by Democrats.

But even if those who oppose the tax increase are sitting on the sidelines because they believe it has no chance of passing, some Republican lawmakers continue to voice willingness to back a tax increase in exchange for spending reforms.

“Right now we have a balanced budget,” said [Assembly Member Pete] Livermore [R-Carson City], who signed the no new taxes pledge. “But if the right reforms happen, I do think we could do some add backs.”

That keeps alive the possibility of a tax increase, or at the very least the extension of the 2009 tax increases that are set to expire in June.

So revenue is still on the table?

So things looked bleak for proponents of a tax increase to soften the cuts in education and human services.

Yet Republican lawmakers are still open to negotiations.

Sen. Joe Hardy, R-Boulder City, said a realistic conversation is finally taking place on both taxes and government reforms of collective bargaining.

“It’s happening now, as we speak,” Hardy said. “We’ve opened up the discussion.”

However, it isn't looking pretty. Some are already preparing for a huge fight, perhaps one that lasts all the way into the summer.

Frustrated with the stalemate over taxes, union leader Danny Thompson delivered his most explicit threat yet during a legislative hearing today: pass taxes or we’ll go to the ballot.

Frustrated with the stalemate over spending reforms, chamber leader Hugh Anderson delivered his own threat in the same hearing: “Without the reform, we cannot support any tax bill, no matter how soundly conceived.”

As the Legislature enters its waning days, the major players in the tax debate have all staked out familiar positions that reflect the ongoing stalemate between Democratic and Republican lawmakers in the budget debate.

Labor wants a tax increase to prevent further salary and benefit cuts to state workers.

The Las Vegas Chamber of Commerce sees taxes as its only leverage over the Democratic majority to exact changes to collective bargaining and public employee benefits.

Gaming and mining are happy to support a broad-based business tax as long as the Legislature doesn’t look to solve its revenue problems through industry-specific taxes. And they don’t really see a need to join the spending reforms fight.

So what now? At the very least, it seems like Carson City is finally having a more realistic conversation on taxes. And while it's far from settled, at least it seems like some doors are opening for a budget deal that at least won't be as atrocious as most expected just two weeks ago.

However, the discussion is still largely happening on conservative terms. The Las Vegas Chamber of Commerce is threatening to hold the budget hostage if legislators don't agree to weaken public sector workers' rights. Republican legislators seem to be vacillating between undying support for Sandoval's budget of butchery and maybe supporting a tax deal that won't displease their biggest donors. And right now, it's hard to tell what kind of compromises Democratic legislators are ultimately willing to make. But without a doubt, the usual corporate lobbyists are already declaring the one true "fair and balanced" budget solution "dead on arrival".

It would be nice to see legislators notice this problem. And even better, Democratic legislators may be best served by remembering that all of us who elected them did so by expecting thoughtful Democrats, not "Republicans by some other name" who easily agree to conservative policies. And of course, Republican legislators need to realize that they don't solely represent teabaggers... Believe it or not, we exist!

And now, we need to make our voices heard. We need to continue reminding our legislators that we want to see real solutions come out of The Legislature this year. We can't afford any more gimmicks, and we can't afford to defund the very public infrastructure we need to stabilize our state's economy and end this radical boom-and-bust cycle.

Hope isn't all lost... Especially not if we demand it.

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