Horsford: We’ll deal, not buckle

CARSON CITY -- Democratic lawmakers will bargain on numbers but won't buckle on principle as they seek to break the state budget stalemate.

That's the message from state Senate Majority Leader Steven Horsford, D-Las Vegas, as he prepares for the final four weeks of the 120-day legislative session.

During a recent interview, Horsford, in his second regular session as majority leader, said he's willing to come down from the $7 billion general fund figure he and other Democrats say is needed to adequately fund education and social services.

But he's not willing to approve the $6.1 billion general fund budget Gov. Brian Sandoval proposed for 2011-13.

Sandoval wants a budget that's consistent with his campaign promise to oppose tax or fee increases, and so far he's kept Republican lawmakers united behind the plan.

Horsford and other Democrats who hold a majority in the Legislature want to boost spending about $920 million above Sandoval's proposal.

Their plan, according to Horsford, includes what's best described as $571 million in new taxes on services and business revenue and another $626 million that comes from postponing the expiration date on a series of taxes that would otherwise "sunset" June 30.

Added together, the new and extended taxes plus another $303 million in revenue above earlier forecasts in the Democrats' plan totals $1.5 billion, more than enough to fund the $7 billion proposal.

"Now it is time for us to do the job we were elected to do, not just run off of last cycle's campaign promise," he said.

The Democrats introduced their plan Thursday at a town hall meeting with business leaders in Carson City. The bills to enact it will arrive in the Legislature early this week. The legislative session concludes June 6, but if Democrats and Republicans can't approve a budget by then they could be forced to hold special sessions to finish their work.

"I don't want to be here any longer. I have young kids; my daughter wants her daddy home," Horsford said. "But I'm here for a reason and I'm not going to give in or give up until we accomplish what we need to accomplish."

The Sandoval budget, Horsford said, contains hundreds of millions of dollars in "gimmicks" future lawmakers would have to pay for and doesn't offer enough spending to improve education in Nevada or protect low-income elderly and children who rely on social services.

Sandoval's budget includes about $5.5 billion in recurring revenue from taxes and about $500 million to $600 million in one-shot sources, diversions and advances against future tax revenue.

"He is mortgaging future revenue to pay for today's bills," Horsford said of Sandoval. "And I think that goes to the credibility of those revenue enhancements to begin with."

He's also frustrated by the perception it's the job of Sandoval, not the Legislature, to control the construction of the state budget.

He and other Democratic leaders have referenced Article 9, Section 2 of the state constitution. The provision says, in part, "whenever the expenses of any year exceed the income, the Legislature shall provide for levying a tax." Democrats say that shows once the governor delivers a proposal it is up to the Legislature to finish the job, even if it means raising taxes.

To accomplish the task, Horsford said he'll negotiate with Republicans to get the votes he needs for a budget he says not only restores Sandoval's proposed cuts to education and social services but also puts the state on sounder financial footing going forward.

"It is not my way or the highway," Horsford said. "Is there room in our level of restoration for discussion? Absolutely."

The Democratic vision for the budget is a plan that phases in new taxes to replace money from the "sunset" taxes and American Recovery and Reinvestment Act, or economic stimulus, that kept the state afloat through the recession.

Horsford argues it's the best way to maintain service levels without resorting to borrowing against future revenues.

But he's unlikely to find many Republicans who agree. So far, Republican lawmakers are sticking with Sandoval because, they say, the state doesn't need any new money.

They're betting an economic recovery will result in more tax revenue to fund services without raising taxes, albeit with some pain in the short term.

State Sen. Joe Hardy, R-Boulder City, said if state revenue continues to exceed projections at the current rate, state spending will reach the level Horsford proposes without a tax increase.

Hardy also notes that although legislators approved nearly $7 billion in general fund spending in 2009, the money never materialized because of the recession.

That, he says, combined with an expectation Congress will eventually pass a law to enable Nevada to collect sales tax revenue from Internet transactions is more than enough to support state services.

"You now have funded this state as it has never been funded in the last five to seven years without having a single tax increase," Hardy said.

Sandoval says not only is there no need to increase taxes but that a tax increase could make the state's problems worse, not better.

Sandoval senior policy adviser Dale Erquiaga said that's why the governor doesn't plan to negotiate any tax increase with Horsford or other Democrats, even over just enough in new taxes to replace the one-shot revenue and cash advances liberals and conservatives have criticized.

"The governor has tried to include revenue measures that allow the economy to recover," Erquiaga said. "And meeting halfway on a tax increase will only damage an economic recovery and put a halt to job growth."

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.