Friday, May 27, 2011

Meanwhile, About That Budget...

Folks in Carson City are still trying to figure out how deep their troubles are...

In a late night press conference, director of Administration Andrew Clinger said the potential budget hole created by the Supreme Court decision in the Clean Water Coalition case could strip $656.7 million from the governor's proposed budget.

He said the decision if read broadly could deny the state not only the $62 million in water use funding but the 9 cent property tax rate from Clark and Washoe counties worth some $121 million, the school bond reserves from nine Nevada counties estimated at $247 million and the indigent accident fund money — $39 million.

The governor's office is preparing an amendment to the budget to cure the shortfall. The plan is reportedly to lift the sunsets on the tax hikes approved by the 26th special session of the legislature, which would generate a net revenue increase of $643 million.

But it seems like there's growing consensus that everyone will have to accept the obvious and lift the sunsets on the 2009 tax deal. And in fact, negotiations are again underway.

While Although the court’s decision applied to a relatively small sum compared to with the billions at stake in the state budget -- $62 million from the Clean Water Coalition -- the broader precedent set by the court likely prevents Gov. Brian Sandoval and lawmakers from looking to local government to solve the budget woes.

To keep his no-new-taxes pledge, Sandoval had avoided more draconian cuts by relying heavily on money from local school districts and county governments. The court decision removes that option, opening up at least a $500 million hole in the governor’s proposed budget. Loath to cut further into struggling state services and with only days left in the legislative session, Sandoval’s simplest option is to give in to Democrats’ demands to extend the temporary tax increase passed in 2009. [...]

“Now we’re back into the real world of negotiating,” state Sen. Sheila Leslie, D-Reno, said. “So far it has been only one side willing to negotiate. This ruling forces the other side to negotiate.”

Democratic leaders met privately with Sandoval late Thursday to work on the contours of that agreement.

Democrats have spent the past two weeks building building a budget that includes revenue from the taxes about to sunset. That will be the starting point for the negotiations.

Now, it's just a matter of what else will happen. Some Republicans will still try to demand attacks on unions, but now their hand has been significantly weakened. The teabaggers are all now weeping and wailing and gnashing their teeth. And a few progressives are already starting to take advantage of the changed dynamics and demand better.

Gary Peck, executive director of the Nevada State Education Association, said “the sunsets are not enough.”

Assembly Speaker John Oceguera, D-Las Vegas, said the sunsetting taxes were the best they could get from Republicans right now.

Peck said the Legislature should go back to its plan to raise $1.2 billion in extending the sunsets and instituting a sales tax on services and the margin tax. That tax plan won no support from Republican lawmakers, who would be necessary to pass any tax.

“It’s unfortunate that the Legislature seems unwilling and unable to stand up to governor and do what’s right,” Peck said.

Lynn Warne, president of the Nevada State Education Association, said the union would still look to put a tax on the ballot if all it got were extending the existing taxes.

Maybe the spirit of Wisconsin is finally arriving here? Maybe progressives are ready to take the lead on saving the state and move forward with real reforms? Maybe we will take what's already available and run with it?

Now that Sandoval's cheap fiscal gimmickry has been exposed as just that, we need to act and we need to keep speaking the truth. Nevada is being forced to wake up, and in the coming days and weeks we need to continue this adult conversation. And even though I myself have been concerned in the not-so-distant past about taking tax reform to the ballot next year, I am now thinking it may be the only way to get around a deadlocked legislature and Governor with his head constantly stuck in the sand. Perhaps we need to let the people decide once and for all if they're satisfied with this nonstop nonsense, or if they're ready for real change.

At some point, the kabuki theater must end. As Mr. Gleaner so eloquently explained this morning, most Nevadans don't give a rat's ass if Sandoval and most legislators grab hands and sing kumbaya over a pile of horse manure. The fact of the matter is that our schools are still grossly underfunded, the rest of our public infrastructure is still woefully inadequate, and our state still needs real long-term solutions for real, sustainable success.

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