Sando's Revenge?

This morning, we talked about national "Tea Party, Inc." King Grover Norquist balking at all the Beltway chatter about Mitt Romney possibly adding Nevada's own Governor Brian Sandoval to his VP short list. Just after BuzzFeed broke the story and Ralston raised some hell on Twitter, Sandoval dropped a bomb on Carson City that is set to explode expectations for next year's legislative session.

“On Thursday, the Budget Office will be releasing budget instructions for the next biennium as we prepare for the 2013 Legislature. In order to avoid cuts to education and other essential services, revenues from the sunset taxes will need to be continued. While taking into account mandatory caseload growth, primarily in Health and Human Services, federal mandates such as the Affordable Care Act, and critical infrastructure needs, my budget instructions will call for “flat” budgets which will rely on some or all of the revenue from the sun setting taxes.

“Let me be clear, as I’ve said before, the economy is improving, but I believe we must begin this budgeting process with all the information available. In addition to avoiding further cuts to education, this decision means there will be no need for tax increases in the next session. Nevadans will pay no more than they are in the current biennium.

“The budget building process remains ongoing, but we must begin today.”

While The Sun's Anjeanette Damon noted Sandoval's grumbling about the Affordable Care Act and necessary infrastructure projects to do, I just have to say that it's quite a funny coincidence that he made this announcement today. It's also funny that this happened on the very same day that Nevada's own Harry Reid shot back at Norquist's star Capitol Hill pupils that are threatening yet another budget melee.

Senate Majority Leader Harry Reid is warning House Republicans they’ll be setting themselves up for another Tea Party-inspired government shutdown fight, unless GOP leaders buck their conservative rank and file and hew to the terms of last summer’s hard-fought debt-limit deal.

House Republicans are prepared to introduce their budget resolution next Tuesday, and some signs suggest they’ll call for cutting federal programs below the levels both parties agreed to in last August’s debt-limit fight. On Tuesday Senate Majority Leader Harry Reid laid down the Democrats’ marker in no uncertain terms: Dream on, we’ll never let you buck the deal.

“This wasn’t a handshake, it was a law we passed,” Reid told reporters on Tuesday at a weekly Capitol briefing. “And now, the Republican right wing in the House is trying to change the agreement we made as a matter of law. I guess they love government shutdowns, or at least the threat of them … If they renege on the law, the agreement, they’ll be forcing yet another government shutdown and a fight with the American people. That’s ridiculous.”

Now contrast this with how REPUBLICAN state legislators here in Nevada are responding to Sandoval's surprise announcement.

“I support Gov. Sandoval and his budget instructions that will not impose new taxes on the people of Nevada,” [Senator Michael] Roberson [R-Henderson] said. “I will continue to lead the fight against new tax increases while working with Gov. Sandoval to improve public education. I will not support additional cuts to public education.”

Roberson opposed extending the sunsetting taxes in the 2011 session, arguing that the Nevada Supreme Court ruling did not create the huge financial hole in the budget that others had suggested.

“Gov. Sandoval has outlined a prudent and fiscally responsible preliminary budget framework,” Roberson said. “I am grateful for his tremendous leadership. I will stand with him and support him.”

Sen. Ben Kieckhefer, R-Reno, announced his support for Sandoval’s proposal via Twitter.

“I applaud the decision by Gov. Sandoval to do what is necessary to protect education from cuts,” he said, adding that what that means in the 2013 session is yet to be determined.

I find it quite interesting that Roberson, who was once quite the "tea party darling" himself last year, is directly refuting Grover Norquist's assertion that Sandoval passed "new taxes" by merely agreeing to extend the 2009 tax deal. And I find it quite interesting that both Sandoval and Legislature Republican leaders are running away from the tactics used constantly by their counterparts in DC by settling the matter of the 2009 tax deal and making an easy 2013 budget deal more likely.

However, I suspect Brian Sandoval isn't just rebuking the radical "tea party" right in his own party in making this move. Both progressive populist Kermitt Waters and conservative "business establishment" powerhouse Monte Miller have been pushing to put tax reform on the ballot, and the Nevada AFL-CIO may soon enter the playing field with the corporate margin tax that everyone's been expecting them to put into a ballot initiative. As Sandoval's team has become more concerned about what may happen if any (or a combination) of these initiatives makes it on our ballots some time soon, as well as what may happen if Republican chances of retaking the (state) Senate continue to dwindle, this may also be Sandoval's attempt to thwart the drive by both progressive Democratic legislators and tax initiative supporters to force major tax reform next year.

So far, it sounds like Democratic Senators aren't ready to settle for the status quo.

While we applaud Republican State Senators and the Governor’s change of position to prioritize education in Nevada, we don’t believe it does enough to address the challenges that Nevada faces. These are challenging financial times and it is critical that we rise above partisanship and find solutions that place the needs of our children and families first.

Last year, Senate Democrats fought to protect education funding, believing that providing opportunity to our children must be the cornerstone of any plan to revitalize Nevada’s economy. Nevada deserves leadership that will fully fund education, while also taking on the challenge of solving our budget shortfall. Only together, can we facilitate solutions to help Nevada families and businesses succeed.

Unfortunately, by not addressing the long-term problem and clinging to stagnant levels of education funding, the Governor is only postponing the inevitable crisis that our schools and our state face.

“What we need are long term solutions to resolving our budget problems, not postponing them for another 2 years” said Senator Mo Denis. ”We must address tax fairness for middle class families, cut wasteful spending in our government, and provide Nevada business with an educated workforce that can help compete in the national and global marketplace.”

Dennis also added “In order to diversify our economy and attract new businesses and industry to Nevada, we must show them we are serious about investing in a well educated workforce. We can’t do that if education funding remains stagnant.”

And we'll have to see if Sandoval's big move will be enough to stop Monte Miller, Kermitt Waters, and the Nevada AFL-CIO from gathering signatures for their respective initiatives later this year.

Who's Afraid of Kermitt Waters?

He's brilliant. He's edgy. He's visionary. He's radical. And perhaps he's managed to bring folks together (while simultaneously driving away powerful players on the left and on the right) in a way that hardly anyone else has.



He's Kermitt Waters, and he wants to lower your taxes... Unless, that is, you're a multinational corporation looking for an "onshore tax shelter" here in Nevada. If that's the case, watch out.

But before Waters can even launch a campaign for his tax initiative, he has to sue in court to strike down the state statute that's been holding him back. And he's formed a strange alliance on this law suit, one that actually scares some local progressives. (I'll explain this later.)

On Saturday, I finally had a chance to meet Mr. Waters myself and ask him the questions that I sense many Nevadans have been wanting to ask. I started with what I thought was the most obvious: Why bring forth such a complicated and radical restructuring of Nevada's entire state budget that openly violates the single subject rule that only allows for an initiative to address one policy matter? Waters gave me a simple deadpan of an answer: "You want to give me $500,000?"

Waters complained about how expensive it is to push a ballot initiative. This led me to my next question: Why do this? Isn't this why we have a Legislature? Again, he gave a clear and concise answer: "Gaming and mining own The Legislature." He then went on to express his deep distrust of pretty much anyone and everyone in Carson City, and especially of what he considers the center of "booze, broads, and bribes". It seems that he's felt the same frustration with the way business is done in Carson City that most voters in Nevada (and especially Clark County) feel... But he's taking it to another level in threatening their power over perhaps the biggest decision made there, which is the one made every two years on the state budget.

Waters and I then went back to the matter of his law suit. He sounded especially frustrated over The Legislature intervening in the law suit, as well as Attorney General Catherine Cortez Masto (D) sending this law suit to federal court.

I then asked about the other big elephant in the room: Is Kermitt Waters about to open a "Pandora's Box" of "tea party" crazy by making it easier for the likes of Chuck Muth and Richard Ziser to unleash the full radical right wish list, from TABOR to zygote personhood to domestic partnership repeal and more, on our ballots? After all, it's impossible that Chuck Muth is backing Waters' law suit because he likes Waters' tax plan. (Remember that if Waters wins this law suit, a precedent is set that will allow virtually everyone else to start collecting signatures to put whatever one wants on the ballot.) So what was Waters' answer? Simple: "If you don't like it, beat it at the damned polls. Don't kill the goose. Just beat them at the polls."

It's interesting. Kermitt Waters may be very cynical and pessimistic when it comes to the death of good policy caused by the people running Nevada's government, but he sounds hopeful and downright optimistic about the triumph of good policy among the people voting in Nevada elections. It sounded like he genuinely believes Nevada will be better off with more of the California/Arizona style direct democracy regularly practiced there than with what we have now.

OK, so Kermitt Waters likes direct democracy. But again, why pursue this long, complicated initiative when there are simpler initiatives floating around that are not being challenged in court? When I asked about the AFL-CIO's proposed business margin tax, Waters flatly dismissed it. "It's a waste of time. In three years, they'll take it off." And since the AFL-CIO proposal is just a statute instead of a constitutional amendment, he thinks it may face the same fate in the hands of The Legislature that the Nevada Clean Indoor Air Act has experienced. Waters pretty much said the same thing about Monte Miller's proposed gaming and mining tax initiatives when I asked about those.

At this point, Kermitt Waters then dropped a bomb on me. He told me that other progressive organizations did not want to work with him on his initiative, and that they didn't want to touch this because of his association with Chuck Muth, and because they fear Waters' victory in court would lead to the likes of Muth and Ziser throwing the entire "tea party" wish list on Nevada ballots in a matter of no time.

When I asked him if the concerns of other progressives should be noted, Waters stood behind his plan. "We're trying to accomplish something. We'll get nothing done if we don't [change the rules on initiatives]. We'll all starve to death if we don't let someone get two hamburgers. This is just insane."

Now before I wrap this up, I want to give a reminder of what's at stake with Waters' initiative. If Kermitt Waters succeeds, his initiative will:

- Eliminate the property tax for single family homes

- Establish a 20% levy on mining companies

- Set up a gross receipts tax on businesses earning over $1 million a month

AND

- Use the new revenues to set up a fund separate from the state's general fund (so legislators and the Governor can't use any of this new money to cover everything else in the general fund and/or pay for new tax cuts somewhere else) to pay for a new system of Nevada appeals courts, increased investment in public education, more renewable energy investment, expanded health care coverage, and more.

Honestly, this is why I've personally been at conflict with myself on this. And this is why I was willing to meet with Kermitt Waters himself last weekend to hear his side of the story.

I personally believe Kermitt Waters is genuine in his desire to remake Nevada Government, and especially Nevada's broken budget process, for the better. And when glancing at everything in Waters' initiative, from renewable energy investment to public education investment to generating the new revenue our state so desperately needs, it really does read like a progressive's wish list come true.

However, I can also see that Waters' route isn't the only route that progressives have to use to enact needed reforms to our budget and our tax system. That's why later this week, we'll be looking at the other progressive tax proposal making waves: the AFL-CIO's. We'll probably also do more analysis, along with some needed comparison & contrast, on both initiatives later this week.

In talking with Kermitt Waters, I can see why he's become feared in recent years. He may be dismissed at times as a "gadfly", but he truly does have the determination to follow through on his fights. We'll have to see how far he wants to go on this one.

Nevada Past... California Future?

This weekend, we've been seeing plenty of reflection on the life and legacy of Bill Raggio. The RGJ's Ray Hagar perhaps summed it up best.

As Nevada mourns the death of the “Lion of the Legislature,” some also mourn the end of an era, when bipartisanship ruled the day.

Nevada’s legislative process has gone from one of compromise to polarization, experts said. Raggio’s death only enforces the point.

“It’s been bad for a couple of sessions,” said former Assembly Speaker Joe Dini, D-Yerington, who began is legislative career in 1967 and ended it after the 2002 special session on medical malpractice. “I don’t know if will be any worse than it has been. I don’t think it will get any better.” [...]

“Clearly, that had a lot to do with it (resignation), the fact that Bill Raggio was a man who would set aside partisanship for the greater good,” said Billy Vassiliadis, a Nevada political consultant based in Las Vegas.

“He worked with three Democratic governors and three Republican governors and always worked in the spirit of getting something done,” Vassiliadis said. “And today, politics puts a premium on stopping things rather than making things happen. To stand in place rather than move forward was something he could not abide in.”

It's certainly something no one can deny at this point. And this is something we've been talking about here for quite some time. And at times, it seemed like Bill Raggio really came from a different era and represented the kind of politicking and governing that Nevada has been quickly losing. I really think Jon Ralston hit the nail on the head here.

In his later days, Raggio frequently lamented the propensity for Republicans to bow to the Temple of Norquist, pledging fealty to a no-tax pledge when circumstances could always change. In a world of one-note politicians, Raggio was operatic, often giving floor speeches that were the equivalent of arias. Indeed, one lobbyist, marveling at a Raggio performance, looked at me and said, “Like Pavarotti at the Met.”

Raggio also railed against those who only cared about re-election, a common affliction in Carson City, fearing they would never help move the state forward. As ex-Sen. Paul Laxalt said Friday, “Throughout my political career, I adhered to a policy of not allowing political differences to transform into personal differences. That was the essence of Bill Raggio. Sadly, that quality is sorely missing in today’s toxic political environment.”

I believe one of the more painful decisions of Raggio’s career was to endorse Harry Reid for re-election in 2010. Yes, he was furious that Sharron Angle had challenged him in a primary, but it was much more than personal. He thought she would be a disaster for the state, so he endorsed whom he considered the lesser off two evils.

There was nothing in it for him — he knew the blowback would be vicious, although I doubt he knew he would lose his leadership position because of his craven colleagues, some of whom I would bet a fortune voted for Reid but were afraid to say so.

A man of his word? Yes. A man of principle? Indeed. A man for all seasons, especially every other winter and spring in Carson City? Absolutely.

Perhaps none of Carson City's powers that be was surprised by Raggio's final act in 2010, but a whole lot of political junkies outside Nevada were. After all, why would someone of Raggio's stature do that to his own party? It's something that would be unheard of anywhere except Nevada...

But will we ever see something like that here in Nevada again?

Throw the party's base supporters some choice red meat... and risk that persuadable voters who tune into the media coverage recoil. But tamp down the fiery rhetoric in hopes of projecting a "kinder, gentler" image... and risk leaving the party faithful full of accusations that moderates are trying to water down the GOP brand.

'Tis a dilemma to be sure.

That's what's been happening just south of San Francisco, where California Republicans have been holding their convention. Newt Gingrich showed up yesterday to rally the base with cries of, "Drill, Baby, Drill!!!" And yes, reporters and observers there may have caught a glimpse of the Nevada Republican Party's future.

We've definitely seen a rightward shift of GOP legislators in recent sessions... And that really seemed to accelerate once Bill Raggio left Carson City for good. And now because of what's become endless intransigence on implementing long term budget solutions, some are now pushing for voters to take matters into our own hands. However, that isn't without its own risks.

The Field Poll showed the strongest backing for the tax hike on millionaires, with 63% of voters saying they were inclined to vote yes. Next came Brown's proposal, a temporary half-cent sales tax increase combined with higher income taxes on the wealthy, which drew 58% support.

But voters appear to reject a broad-based income tax hike proposed by wealthy Los Angeles civil rights lawyer Molly Munger, which received only 45% support, with 48% opposed. All three initiatives are in the signature-gathering phase before they can be placed on the November ballot.

The results roughly parallel a poll that Brown's political aides released in summary form this week. That showed Brown's proposal and the proposed levy on millionaires both with more than 50% support, while Munger's languished. Brown's aides also tested whether voters would support the taxes if all three appeared on the ballot and found in that scenario none would pass.

That's been the argument the governor and his aides have been pushing for three months now -- that Munger and the unions and activists who back the millionaire's tax need to drop their measures so they don't doom all of them.

But backers of the millionaire's tax seemed emboldened by the newest poll that continued to show theirs as the most popular. Nonetheless, the governor's aides and allies continued to urge others to back down.

Yes, believe it or not, California is also providing us with this glimpse into Nevada's future. There, Governor Jerry Brown (D) is pushing his own tax initiative that raises the income tax on top earners while also keeping in place a hike of the state's sales tax. However, he's now getting competition from both civil rights attorney Molly Munger's broad-based income tax and Courage Campaign's "Millionaires Tax". For so long, California's Legislature couldn't agree to much of any tax reform. But now, they're seeing an increasingly complicated and messy "ballot royale" over the competing tax initiatives.

And guess what? That's where we also seem to be headed... Except that I'm hoping we won't see an ugly food fight that pulls down all the tax reform initiatives. Instead, I want to do my part to inform and enlighten Nevada voters by starting a discussion this week on tax reform, ballot initiatives, and the future of Nevada Government. I'll be starting tomorrow by sharing with you a conversation I recently had with Kermitt Waters... Yes, the Kermitt Waters with the law suit causing so many Nevada politicos' heads to explode. Later this week, I'll also be posting conversations with those backing Nevada AFL-CIO whiz Danny Thompson's business margin tax initiative. Who knows, maybe we'll even dig more into Monte Miller's tax proposal?

As I've been saying here for some time, we in Nevada have to prepare for serious change. Since we first heard the saddening news of Bill Raggio's passing, we've been reflecting plenty on what's already been changing. And while I don't believe we're destined to become a carbon copy of California (or Arizona, or Colorado, or any other state, for that matter), we can no longer deny that both the dynamics of legislating in Carson City and the increasing frustration of Nevada voters outside Carson City are leading us to consider something never before seen here, even if it's something California and Arizona regularly see: ballot box budgeting.

There's obviously a reason why so many are so devastated by the loss of Raggio. In many ways, this does feel like the end of an era. But now if progressives want to embark on a new era and fix what's become regularly broken, then we may really need to rethink how we've advocated tax and budget reform. It may finally be time to face the voters, and face our future.

"Re-Funding" & Restoring Nevada

On Saturday, the RGJ ran an article on the precipitous drop in big casino property tax revenues that Washoe County has to deal with. And believe it or not, it's leading to an interesting discussion on Nevada's chronic tax woes.

Fifteen resort properties in Washoe County together are valued at $710 million for property taxes -- a loss of about half their value over four years — as their profits have shrunk or turned into losses.

It’s a dramatic piece of evidence that Nevada needs to change its tax policies, said Elliott Parker, University of Nevada economics department chairman in Reno. In all, Nevada gaming revenues have fallen hard, shrinking by 15 percent over the last four fiscal years.

“You can’t get anybody to do anything,” said Parker, who favors broadening the tax base to include services, the biggest part of the economy.

“Voters keep re-electing people who don’t do anything to fix the problem. Now that it’s here, we’re all shocked.” [...]

“Nevada cannot be as dependent on a single industry for tax revenues in the future as it has been in the past,” Bill Eadington, UNR’s gaming professor, wrote in a paper last year. “Economists in the state have been warning about this for 50 years. With the Great Recession, Nevada has finally got burned.”

Nevada has indeed been burned this time... But is someone finally coming to our rescue? On Friday, Ralston interviewed none other than Kermitt Waters. Remember him? He's pushing the tax reform initiative that has all of Nevada's big power players running scared.



Remember, Waters' initiative would levy a 20% tax on mining and a gross receipts tax on businesses earning more than $1 million a month if passed. It would definitely go great lengths to broaden Nevada's tax base. But since it would do so in a way that eats into the profits of the biggest corporations doing business here, they don't like it.

And remember, Waters' proposal isn't the only tax plan floating around. Monte Miller is following through on his threat to introduce gaming and mining tax initiatives, and Nevada AFL-CIO chief Danny Thompson continues to rally troops for his planned initiative to implement a business margin tax. 2012 may finally be the year that Nevadans get serious about talking tax reform.

And apparently since incoming revenue is still nowhere near levels that state and local government need, and since Nevada families are getting sick and tired of seeing any more teachers fired and classrooms shut down while roads remain in disrepair and parks remain closed, we may actually see more willingness to finally do something about it.

"The T Word" & 2012

This morning, The Sun asked Mitt Romney to come clean on where he really stands on storing nuclear waste at Yucca Mountain while the RGJ begged all the G-O-TEA contenders to have an honest conversation with Nevada voters on what to do to fix the economy (Ha! Like that's possible...). Of course all the attention is going toward the upcoming caucuses, but there's another big issue looming this year. And while the discussion was dominated last year by which of Nevada's big power players would line up behind which initiative, someone else has emerged to fire the opening shot.

Kermitt Waters seeks to place on the November ballot a proposed constitutional amendment calling for a sweeping overhaul of Nevada’s tax system — abolishing property taxes on single-family homes among other things while identifying and allocating new tax revenue.

Waters said last week his proposal is borne of frustration with the status quo in Carson City. The state’s 63 lawmakers represent the powerful interests who fund their campaigns, he said, not the voters who elect them.

“The people of Nevada don’t have a Legislature. Mining and gaming have a Legislature,” Waters said. “If the Legislature could get their hands on this money, none of this would ever happen.”

However, there's a big problem with Kermitt Waters' initiative... And ironically enough, his dilemma is the exact same one that has hampered anti-choice extremists from putting a "personhood initiative" (like the one that failed in Mississippi last fall) on the ballot this fall. Basically, both initiatives face major legal roadblocks because of the "single subject rule" that requires citizen sponsored initiatives to address one issue and one issue only. And with both the "call the zygotes people" anti-choice radicals and Waters continuing to fight it out in court, we'll have to see if 2012 is finally the year that unleashes more initiatives onto our ballots.

So what's the problem with Waters' initiative? Basically, he's out to:

- Eliminate the property tax for single family homes

- Establish a 20% levy on mining companies

- Set up a gross receipts tax on businesses earning over $1 million a month

AND

- Use the new revenues to set up a fund separate from the state's general fund (so legislators and the Governor can't use any of this new money to cover everything else in the general fund and/or pay for new tax cuts somewhere else) to pay for a new system of Nevada appeals courts, increased investment in public education, more renewable energy investment, expanded health care coverage, and more.

Wow. Now that's ambitious! Oh yeah, and now it's easier to see why Kermitt Waters' initiative runs into trouble with the "single subject rule". Theoretically one could argue that it all falls under the blanket subject of the state budget, but someone else could easily argue that Waters' proposal is a legal hot mess that change everything from state mining law to public education to private property rules to energy policy and more if passed.

Honestly, I'm still trying to wrap my head around Kermitt Waters' initiative myself... But regardless of whether or not his initiative makes this year's ballot, he kick-starts the much needed conversation on what kind of Nevada we want for the future. In addition, he also allows for the conversation to "shift more to the left" by bringing to the table more progressive tax solutions, like fixing our woefully outdated mining tax policy and making big corporations pay instead of shifting the burden to working class families. We should really appreciate that, even if some of us are leery of the unintended (????) consequences of messing with Nevada's "single subject rule" for initiatives. (If Waters succeeds, definitely expect more religious right lunacy and "tea party" nuttery to make their way onto our ballots as well.)

Now don't get me wrong, I also appreciate what groups like the AFL-CIO are doing in building a broad coalition for tax reform that takes us in a positive direction for a change. But then again, as I pointed out back in June, there may be a catch:

Of course, there has to be a catch somewhere. In this case, the powers that be in Nevada's gaming-mining-lobbying industrial complex are afraid the angry mob of plebes just might come after them for years of pulling the puppet strings of "the best state government money can buy" that never seemed to care about the people very much. So now, out of desire not to bear the brunt of the people's wrath, these powers that be now want to help pass some kind of broad-based tax reform.

And now, none other than "Angry Plebe Champion" Kermitt Waters has stepped up with a bold and ambitious tax reform plan that threatens to steal thunder from the more moderate AFL-CIO plan that Danny Thompson is hoping to win over big business with, and from Nevada GOP big wig Monte Miller's tax proposals that ProgressNow fears may be a right-wing attempt to "rat f*ck" the other tax reform initiatives. At the very least, there's hope that we're finally reaching a "critical mass" here in Nevada where we can finally have an adult conversation on raising the revenue our state needs to properly function. Think about it. Not that long ago, "The T Word" was so "dirty" and "taboo" that hardly anyone wanted to even approach the subject. But with at least three different sets of tax initiatives that may come to a grocery store parking lot near you very soon, it feels like the sense of taboo is finally fading away.

It remains to be seen just how sincere Monte Miller is about his tax proposals, how Kermitt Waters intends to get the legal approval needed to start circulating petitions for his proposal, and whether the AFL-CIO can really coalesce a "grand business-labor coalition" behind its "trans-partisan consensus" proposal. But hopefully now that it's started, we can hope the conversation on real, progressive, 21st century tax reform in Nevada can continue in 2012.