Fears of Californication?

Yesterday, prominent Nevada GOP power player, R&R big wig, (and confirmed Sandoval inner circle member) Pete Ernaut complained about the new push to bring tax initiatives to the ballot so Nevada voters can finally do what our Legislature apparently can not do. You tell me if you notice something familiar here.

“It should be warning to everybody because this is something that could very rapidly turn into the next iteration of the California ballot, where we have 10, 12, 13 ballot measures on a number of issues and you wake up one day and really you’ve taken the power away from the Legislature or the governor to make any decisions,” he said.

“And that’s really what they’re struggling with in California more than anything else is you have this entire apparatus in the California state Legislature that essentially has the ability to make decisions on about 5 percent or 6 percent of the entire California budget,” Ernaut said in an interview on the Nevada NewsMakers television show. “If we’re not careful, that’s the way that it will go.”

Now before I explain why I suspect Ernaut said this, I actually want to give him some props for pointing out what I've been saying here for several months. California, here we are!



As we were discussing on Sunday, California currently has three tax initiatives competing for voters' attention and support this year: one by civil rights attorney Molly Munger that seeks to raise income taxes on nearly everyone, one by Governor Jerry Brown (D) that mostly raises income taxes on the wealthy but also keeps in place a sales tax hike affecting everyone, and one by Courage Campaign and the California Federation of Teachers that only raises taxes on the ultra-wealthy earning more than $1,000,000 a year. All three promise to restore investment in public education that's been slashed to death, but all three also face challenges in the duration of the new revenue stream, as well as how much each of them can really pull in.

And of course, we can't forget how California got into this mess in the first place. Starting with the Prop 13 tax restructuring of 1978, followed by the education spending mandates in Prop 98 in 1988, followed by a whole series of special tax policies and spending formulae approved by the voters all through the 1990s and 2000s, California's budget has become an unmanageable fiscal hot mess. And especially because we as people like to "have it all" without ever paying for any of it, California faces chronic budget woes. (It turns out that passing spending mandates without finding the appropriate revenue to fund them causes huge budgetary problems. Surprise?)

However, not all of California's or Nevada's problems can be blamed on "we the people". The reason why Jerry Brown, Courage Campaign, and Molly Munger want to take their respective tax initiatives to the voters is because an intransigent and obstructive G-O-TEA minority in their Legislature refuses to consider any kind of sensible tax reform. And now that sensible Republicans like the late Bill Raggio and Kenny Guinn are distant memories for Republican leadership in our Legislature today, we're now facing the same problems. While I understand, and even sympathize with, Pete Ernaut's concern about "direct democracy run amok", what else are we the people supposed to do when our Legislature can't do its job and pass a workable budget?

And this brings me to the reason I suspect Pete Ernaut is really worried about the proposed tax initiatives: They're aimed at his clients. Ernaut seems to worry about the Legislature losing its authority on the budget now, but he didn't seem to mind Republican legislators giving a big, fat "Gov Wreck" rubber stamp to Brian Sandoval's original slashing of public education before the Nevada Supreme Court forced him to agree to extend the 2009 tax deal. But now that Monte Miller, the Nevada AFL-CIO, and Kermitt Waters are all aiming at Ernaut's top R&R clients, he all of a sudden wants the Legislature to set tax policy. Is that just because he thinks we the people will do what the Legislature hasn't done?

Republican pollster Glen Bolger, who does polling for the Retail Association of Nevada, revealed in his newest survey that Nevadans want the mining industry to pay its fair share.

Mining tax:

As you may know, there is a proposal to increase the state mining tax. I would like to read you
two statements that people are saying about the proposal. After I read each statement, please tell me which one comes closest to your own opinion.

Some people say increasing the state mining tax is a good idea because with the increase in the price of gold and other minerals, the mining industry is undergoing a boom time and should pay a higher tax rate.

... while...

Other people say an increase in the mining tax is a bad idea because at some point the price of gold and other minerals will drop back down to normal levels and a higher tax rate will hurt the industry and cost jobs.

Which statement comes closest to your own opinion?

58% GOOD IDEA

38% BAD IDEA

Now this explains why the mining industry is suing to block Monte Miller's mining tax initiative. Ernaut has probably seen similar private polls showing similar results. The more Nevadans learn about how multinational mining corporations have abused our tax code to pay virtually nothing for profitting off our natural resources, the angrier we get. And if the decision on how much to tax them moves from the Legislature to "we the people", the mining industry will probably have to kiss its sweetheart deal goodbye.

This probably also explains why "big bid'ness" power brokers (like Monte Miller?) fear the AFL-CIO's margin tax on big business. In addition to the mining industry, other big multinational corporations like to set up "on shore tax shelters" here in Nevada to avoid paying taxes. But really, what do we get out of it? After seeing them profit while Nevada families suffer from decaying schools and inadequate transportation infrastructure, Nevada voters may also be ready to finally make the big guys pay their fair share.

So in the end, Pete Ernaut may have a valid point in stating the problems with "ballot box budgeting" and waging electoral campaigns on tax policy. However when the Legislature won't tackle this, someone has to. And when Nevada is in real need of real reform that finally moves our tax code into the 21st century, we can't blame citizen activists for wanting to take matters into their own hands. And since Ernaut's own BFF in the Governor's Mansion encouraged obstruction on tax reform in Carson City last year, he should have realized that he helped bring "Californication" of Nevada policy making here.

10 of 11: In the Capitol... And from California to Here

Yesterday, I hinted at the strange dynamics of state government this year. Believe it or not, Nevada wasn't accustomed to the hurly burly of intense, combative, highly partisan "contact sport" politics... Until this year. Yes, for a moment it looked like Nevadans' worst nightmares were coming true and we really were turning into California (albeit led by the radical right that supposedly hates our next door neighbors so much).

Yep, that's right. Republicans here always make scary comments about this state becoming some sort of "Little California", but their very obstruction on the budget and diabolical brinksmanship games with state government are turning us into California!

Sometimes, I really do wonder if Republican legislators are spending time that should be used working on a budget deal to instead study up on how California Republicans have turned Sacramento into an endless game of "Mortal Combat"... Where the folks who get killed off are kids in need of education, and seniors & disabled in need of health care. Read Calitics' budget diaries and notice the strange air of familiarity to them.

It seems like both at the federal level and in other states, Republicans are exporting the California model of obstructing their way to broken government to the rest of the country.

However, I still sensed something different. When I arrived in the capital city myself, I saw it with my own eyes.

There really is an intriguing game of political chess happening in Carson City right now. Democratic leadership is figuring out where to find the votes to pass an actual balanced budget, and Republican leadership is trying to find "cover" so they can provide enough votes for a budget that won't anger "we the people" too much.

I had a chance to talk with three of my favorite legislators this week on what's happening up north. My Senator, Shirley Breeden (D-Henderson),is busy doing her "homework", studying the numbers, and pressing for a final budget that keeps kids in school and keeps our hope for a better economy alive. David Parks (D-Paradise) is working hard on a number of LGBTQ equality bills (that you will be hearing more from me on soon!) and hopes for agreement on these as well as the budget. And as part of the new wave of Latin@ legislators providing some much needed representation in Carson, Ruben Kihuen is already off to an amazing start in The Senate... He even expressed some hope that his fellow legislators, especially on The Senate side, can work together this session.

Interestingly enough, there may actually be some opportunities for just that. That Republican legislator I spoke with was willing to keep an open mind on AB 211, the transgender inclusive workplace non-discrimination bill. Another Republican legislator apparently expressed concern over Sandoval's proposed budget cuts this week, and signaled support for the LGBTQ equality bills. And even though GOP leadership are playing "hard to get" right now in demanding some of the same union busting run amok in Wisconsin and Michigan, they may also be realizing that they can only ask for so much, and that it may not be too smart to antagonize working Nevadans when they've already sacrificed plenty and are ready to share in even more sacrifice this year.

Hopefully, what I saw behind the scenes in Carson City this week are real signs of hope that our Legislature will be working on actual solutions that will make Nevada an even better state. The "sausage making process" may be messy, but let's keep pushing them to ensure the final product is safe for human consumption.

Well, at least the final product wasn't totally lethal. And thanks to a last minute court decision, the logjam was finally broken. And looking beyond the budget, we did score big victories on the LGBTQ equality front with legislation passed to address housing discrimination, school bullying, public accommodations for all, and a long desired win for transgender equality at work. That was the major bright spot that at least somewhat made up for the idiotic Trash Tahoe bill, the ugly continuing attacks on our public servants, and the ridiculous final state budget that was yet another pile of patches, band-aids, and "quick fixes" that are destined to combust all over again in 2013 (if not sooner).

But funny enough, the postscript is still being written. And coming around full circle, Californication may indeed continue next year... But this time, it may actually be for the better. I'll leave you with these words from June, which may yet come to fruition on our ballots next year.

Either way, Nevada's governance will start to look a lot more like California's, and more like other Western states (such as Arizona) that have become accustomed to partisan turf wars, ballot box budgeting, and "direct democracy gone wild". It's now a question of whether Nevada will keep sputtering on its way to the bottom, or if progressives can turn this around and take advantage of this unique opportunity to inject more common sense into our state government. The days of Kenny Guinn and Barbara Buckley and Bill Raggio making "grand bargains" seem to be long gone. Term limits are taking away experienced legislators. Meanwhile, the power vacuum is being filled by corporate lobbyists, party central committees, and other outside forces.

So what can we do? In the long term, I still believe it's in our best interest that progressives work toward reforming state government to make it more responsive to the people and less beholden to special corporate interests. But in the mean time, we can't wait on the sidelines for the next [year] while Nevada's people continue to suffer inadequate public education, health care, transportation, and other infrastructure necessary to make our state whole again.

So now, we have to ask ourselves not whether and when we will go to the ballot and ask the people to save our state, but how we will do so and who we will build coalitions with. Should we work with gaming and mining on a broad-based business tax? Should we work with other progressive activists on a corporate income tax? Should we push for some sort of mining tax reform? 2012 may seem like a long hike away, but it really isn't [especially with the Presidential Caucuses right around the corner and just a month away for Democrats!]. We need to start planning now to take the first necessary steps to save our state and bring real progressive reform to Nevada government.

"The T Word"... And Who Can Really Handle It

It's the word so many in Carson City fear. It's the word that dare not be said. It's the word that has haunted and vexed Nevada for decades. It's...

[Drumroll please...]

"THE T WORD"!!!

And believe it or not, someone in Carson City dared to utter it yesterday... In The Legislature!

By comparison, it was a doctorate-level discussion in the Senate, where committee Chairwoman Sheila Leslie, D-Reno, vowed to tackle the state’s wobbly tax structure.

“We want to really look at the tax system we have in the state,” she said. “It’s not news to anyone that our state is facing structural deficits, cyclical deficits. It’s time to take out the unpredictability in our system and establish a tax structure that really is ready for the 21st century.”

Cognizant of the eye-rolling over the committee’s new name, Leslie quickly dispelled the notion that they wouldn’t address by name the most pressing issue before the Legislature this session.

“We’re not afraid of the T-word,” she said. “I’ll say it: taxes.”

Yes, that's right. Taxes.

So Sheila Leslie said it. Will The Legislature just do it? And if they don't do it, will we the people do it for them?

Gov. Brian Sandoval has proposed significant cuts to social services, higher education and K-12 schools to balance the budget. Democrats and advocates for those services say the cuts would cause irreparable damage. But these pro-tax forces face an uncertain future in dealing with the state’s $2.2 billion deficit.

“If the Legislature doesn’t have the political will to address the situation, citizens will do it themselves,” said Lynn Warne, president of the Nevada State Education Association, which represents teachers. She said the union has been in talks with business leaders, labor and other groups about an initiative petition, but that it has yet to develop into a formal proposal.

Democrats, moderate Republicans and some business leaders face a high hurdle in gathering votes to pass a tax increase this year. It takes a two-thirds majority in the Assembly and Senate to pass a tax increase and override a veto from Gov. Brian Sandoval, who campaigned on a promise to balance the budget without raising taxes.

A vote of the people would take longer to implement than legislative action. But raising taxes through a ballot initiative would require approval from only 50 percent of voters rather than the two-thirds required in the Legislature.

It's certainly an interesting suggestion... But can it really work? Or are we playing with a totally new set of dangerous flames?

California, here we come (again)?

This is why we moved away from an Athenian-style direct democracy to a representative democracy. Our American founding fathers understood that not every voter had the capacity to take everything into context to make the decisions we expect of our legislators. You could argue that the information age has brought the knowledge necessary closer to the people, but in the end, uninformed voters are making decisions without all of the facts.

Even in a state of 1 million people the system would be impractical, here it's downright unworkable. [LA Times columnist George] Skelton takes [CA Governor Jerry] Brown to task for boxing himself into the corner, but really, it was something of an electoral practicality. He may have won without it, but it sure made it a lot easier. But, here we are, in a position where Brown is now forced to bring this to the voters instead of just doing his job and making the decisions for the state with the Legislature.

Yes. I know. I did it. Again.

But you know what? I've seen it firsthand, so I can recognize it.

Ever since Proposition 13 first passed in 1978, California has endured an endless cycle of taxing (and tax cutting) and spending by way of ballot referendum. And look where it's gotten them. They're in constant crisis mode because voters love to pass all sorts of programs, but hate passing the revenues needed to fund them. So now California voters have a chance at a "do over", and it looks like they may just get it right this time.

However, can they really afford to continue governing by ballot box? And do we in Nevada want to risk total danger by essentially sidelining our own Legislature and taking its due powers into our own hands?

We know what's wrong with our system. We know that we can't keep avoiding "the t word". We need to have an honest conversation on raising the revenue we need to keep the state functioning for now, and get our state working toward a better future.

However, we need to be careful when we start talking about taking decisions that are supposed to be made by our elected legislators and making them at the ballot box. Perhaps it may ultimately be necessary to go to the ballot this time to get the revenue we need to save our state, but let's hope our legislators get the job done this session so that we the people don't have to. After all, that's why we the people voted them into office in the first place.