Gov. Brian Sandoval reiterated his pledge to education and the state’s youth Thursday and called on lawmakers to pass a huge tax increase to fund his plan, saying the future of Nevada depends on its ability to deliver an educated workforce to succeed in a modern, global world.
In his State of the State address, the governor acknowledged the state’s failures in education and vital social services such as mental health. He called on legislators and Nevada’s business community to support his proposed $7.3 billion general fund spending plan that includes $1.15 billion in new or extended taxes. The current two-year budget is $6.5 billion.
He said he was relying on legislative leaders in the Senate and Assembly to “work with me on what must be done.”
“Having just completed our sesquicentennial, we have proudly celebrated our state’s history,” Sandoval said. “Tonight, we begin writing the next chapter of that story. We must decide if that chapter is about getting through the next two years or about creating a new Nevada for the generations to come.”
Senate Majority Leader Michael Roberson, R-Las Vegas, hailed the governor’s plan and predicted it would win support in the upper chamber.
“For far too long our leaders have elected to accept the status quo rather than face head-on the difficult issues facing our state,” Roberson said in a statement. “That changed today.”
Roberson predicted the Senate would back the governor’s plan and warned opponents to “come to the table with their own solutions.”
Sandoval’s biggest challenge will be in the Assembly, where the 25-member Republican caucus is split between conservatives and moderates.
“The governor is going to have his job cut out for him,” said Assembly Speaker-designate John Hambrick, R-Las Vegas. He said that while he supports the concepts addressed by the governor, the big tax increase will come under fierce scrutiny.
Assemblywoman Michele Fiore and others in the conservative caucus said they will oppose the taxes.
“I voted against extending the sunsets in 2013 and will vote against extending them, in whole or part, again in 2015,” Fiore said. “The people of Nevada were told that this huge tax hike package was only necessary to weather the worst of the housing meltdown and economic crisis of 2009 … It is time for the Legislature to keep its promise.”
Sandoval touted the state’s success, winning a coveted designation from the Federal Aviation Administration as a drone testing site and luring electric car maker Tesla to build a $5 billion battery plant in Northern Nevada that will employ more than 6,000.
“We accomplished much in the worst economic crisis since the Great Depression,” Sandoval said.
But he said the state stands on the threshold of a new beginning and must “be prepared to take its place among the most innovative, visionary and well-educated states in the nation.”
Sandoval proposed infusing prekindergarten through 12th grade education funding by nearly $782 million and a plan to take over persistent underachieving schools. His plan includes more funding to expand full-day kindergarten, charter schools and special education, as well as $5 million a year for gifted and talented students.
Sandoval said the state’s current revenue stream does not keep up for growth and is in desperate need of an overhaul.
“In the current fiscal year alone, despite an improving economy and record job growth, we would be unable to pay our bills without significant adjustments to the approved spending plans.”
To balance the budget, Sandoval said temporary taxes imposed four years ago that have been extended twice would become part of the regular revenue pool.
“It’s time. It’s time that we be honest with ourselves. These revenues are part of our comprehensive budget,” Sandoval said.
He also proposed new taxes through graduated business license fees, ranging from $400 to $4 million a year that would raise $430 million.
“I know I am asking a lot of the business community,” Sandoval said. “I have explored every option and find this to be the broadest, least complicated and fairest solution.”
The governor conceded the political hurdles he faces passing a massive tax hike that requires two-thirds majority in both the Senate and Assembly.
“I know this approach will cause debate,” he said. “You will all find that there is no easy solution.”
Sandoval used his speech and focus on high-tech industry to announce the data center company Switch planned to invest $1 billion in a Northern Nevada expansion and would add 1 million square feet of new data center space in Las Vegas.
“This will make Nevada the most digitally connected state in the nation,” Sandoval said.
Assembly Minority Leader Marilyn Kirkpatrick, D-North Las Vegas, in a separate televised speech, cast the upcoming legislative session as a time of two choices: politically easy ones that do nothing or tough ones.
On behalf of Nevada Democrats, she praised the willingness in Nevada to look at broad-based tax reform.
“This is encouraging talk,” Kirkpatrick said. “But it can’t mean only working families pay more in sales taxes. It also doesn’t mean that all we do is raise fees across the board to avoid the hard choices.”
Kirkpatrick’s speech didn’t directly criticize Sandoval’s proposals. But she said some Republicans in the Legislature need to stop viewing the impoverished as lazy or down on their luck only because of their bad choices.
Lawmakers applauded more than 60 times during Sandoval’s speech, clapping as he spoke of education reform, bringing a medical school to Las Vegas and recognized veterans in attendance.
Sandoval, 51, is beginning his second four-year term, riding a wave of popularity and decisive re-election in November. His landslide victory over a little-known Democratic opponent helped usher in a Republican majority in both houses of the Legislature. It is the first time the Republican Party has controlled the governor’s office and both legislative chambers since 1929.
A pragmatic politician, Sandoval in his first term steered the state through a gripping recession punctuated by nearly 14 percent unemployment and a collapsing housing market by cutting budgets and mostly shunning tax increases. He has focused on revitalizing Nevada’s economy through economic development and providing tax incentives to lure companies such as Tesla.
But years of cost-cutting and holding the budgetary line have left the state playing catch-up on things such as K-12 education, mental health services, roads and information technology needs. Nevada’s high school graduation rate for years has been among the lowest in the nation, a black eye for a state trying to prove it can supply an educated and highly skilled workforce for high-tech jobs.
Review-Journal writer Ben Botkin contributed to this report. Contact Sean Whaley at firstname.lastname@example.org or 775-687-3900. Find him on Twitter: @seanw801. Contact Sandra Chereb at email@example.com or 775-687-3901. Find her on Twitter: @SandraChereb.