Election holds Nevada tax fate

CARSON CITY - Gov. Brian Sandoval's March 13 pledge to continue $620 million in sales and business tax increases into 2015 won't be jeopardized by the loss of one Republican tax supporter in the June 12 primary, legislative leaders and political analysts say.

But the chances of Democrats picking up enough seats in the November election to pass other new taxes - something Sandoval strongly opposes - will depend on whether the economy improves by this fall, they add.

If things pick up, some Democrats might ride President Barack Obama's coattails and win legislative seats in Nevada, the analysts predict. They need two-thirds of the seats to pass tax increases and override a governor veto.

But if the economy does not improve at least moderately, then Mitt Romney will win and the Republicans will pick up seats, they say.

Either way, there is no doubt that as the general election nears, the economy is on the minds of a lot of Nevadans who are concerned about taxation.

ELECTION RESULTS

In the primary election for Assembly, Republican Jim Wheeler defeated incumbent Kelly Kite in heavily conservative District 39 in Northern Nevada, largely by attacking Kite for his vote last year to continue sales and business taxes that would have expired June 30, 2011.

But Wheeler's no vote won't prevent a coalition of Sandoval-supporting Republicans and nearly every Democrat from crafting the votes needed to extend the $620 million in taxes. At the 2011 session, all 37 Democrats and 12 of the 26 Republicans voted for the tax extensions.

Since then, on the Senate side, tax opponent Sen. Michael Roberson, R-Las Vegas, has announced his intentions to go along with Sandoval next year on the tax extensions. And two mainstream Senate Republicans, if elected this fall, might vote with Roberson, the presumptive Republican Senate leader, if other taxes are not increased.

"The governor is extremely popular statewide," said Assemblyman Pat Hickey, the presumptive Assembly Republican leader for the 2013 session. "I don't think one Assembly person or a handful in either party are going to prevail against the policies of a very popular governor."

Wheeler praised Sandoval for his leadership but added the governor represents the whole state while he represents a district where voters have spoken out against taxes.

"I gave my word, and that is the way it will be," said Wheeler, who signed a pledge not to increase any taxes.

That state revenue will be short of what some legislators want is inevitable.

State Economist Bill Anderson expects a relatively flat to slow-growing economy for the next couple of years with
1 percent to 2 percent job gains. Revenues are running $58.9 million ahead of estimates with the state potentially facing $200 million more in medical costs for the poor.

Eric Herzik, a University of Nevada, Reno political science professor, said two mainstream Republicans won over tea party favorites in Senate Republican primaries in Clark County.

Assemblyman Scott Hammond, who voted to keep the $620 million in tax increases last year, defeated Assemblyman Richard McArthur, who voted no on the tax extensions, in the Senate District 18 primary.

And in District 9, Mari Nakashima St. Martin defeated Brent Jones, who called himself a tea party candidate. The tea party generally takes the position of limiting government, reducing taxes and cutting federal spending.

Neither Hammond nor St. Martin has signed an anti-tax pledge. But Roberson and the other Republicans have not declared any support other additional taxes, besides the tax extensions.

REVENUE CALLED NOT ENOUGH

Presumptive Democrat Senate leader Mo Denis said in March that the
$620 million in tax extensions wasn't enough "for our kids." Democrats have not announced what tax increases they would back to provide additional money for education and other services.

Sandoval said the tax extensions are necessary to prevent further cuts to higher education and public schools, but he would veto any other tax proposal.

He vowed to veto a plan to establish a 2 percent business margins tax that is being circulated as a petition by the Nevada State Education Association and the AFL-CIO. If the unions gather sufficient signatures, the tax plan will be placed before the Legislature in February.

"I think the governor's position has been strengthened," added Herzik about the election.

"He can come out as reasonable on extending the tax sunsets, but he can dig in on no new taxes. The Democrats will have a hard time saying, 'We like the sunsets, but we want more.' "

PRESIDENTIAL COATTAILS

Fred Lokken, a political science professor at Truckee Meadow Community College in Reno, said the economy will determine which candidate wins the presidency, and that candidate will help his party's legislative candidates through the "coattail effect."

If the economy improves this fall, more jobs are created and unemployment drops, then Obama will win re-election and Democrats can ride his coattails to victories in several expected close legislative races. But if the economy slips, then there is a real opportunity for Republicans to regain control of the state Senate, Lokken added.

Democrats hold an 11-10 membership lead in the Senate and 26-16 in the Assembly.

"The election is kind of like a referendum on the economy," said Victor Joecks,
a spokesman for the Nevada Policy Research Institute, a conservative think tank based in Las Vegas. "Even if there is an economic pickup, people aren't going to forget the last three years. They are going to say the liberal policies of President Obama didn't help the economy."

Herzik said Obama's coattails in 2008 helped Democrats Shirley Breeden and Allison Copening win the state Senate District 5 and 6 seats in Clark County, but "that isn't going to happen again."

Neither senator is running for re-election. Herzik believes that even with an economic recovery, there is far less "enthusiasm" for Obama than occurred in 2008.

Democrats hold narrow leads in both districts, but their advantage in District 5 is less than four years ago

DEMOCRATS PREDICT GAINS

Denis predicts his party will keep and pick up Senate seats in November, in part because several Republican primaries were negative, heavily contested races and the winning candidates had to deplete their resources.

In particular, he mentioned St. Martin's primary against Jones, noting she spent more than $100,000 and got sued by her opponent.

"The Republicans' caucus made serious missteps in their campaigns, putting our Democrat candidates in even better positions to win in the fall," Denis said.

"While Democrats positively engaged with voters in key districts with their messages of focusing on middle-class families, Senate Republicans were busy spending most of their campaign funds to fend off challengers."

But Roberson is confident the Republicans can pick up Senate seats, noting recently that they have been raising more money than Democrats in competitive races.

BATTLEGROUND SEATS

As it stands now, there are five Senate districts where the party registrations are relatively close and either candidate could win with the presidential coattail effect:

■ Senate District 5: Republican Steve Kirk versus Democrat Joyce Woodhouse. Democrats now hold an active voter registration advantage of 21,882 to 20,202, with 9,155 nonpartisans. The seat is Democratic. Through June 7, Kirk reported contributions of $91,623 and expenses of $93,814, while Woodhouse raised $100,297 and spent $41,627.

■ Senate District 6: Republican Mark Hutchison versus Democrat Benny Yerushalmi. Democrats hold a 23,572-to-21,682 advantage, with 8,843 nonpartisans. The seat is now Democratic. Through June 7, Yerushalmi reported contributions of $91,554 and expenses of $29,755, while Hutchison raised $209,549 and spent $50,264.

■ Senate District 9: Republican St. Martin versus Democrat Justin C. Jones. Democrats hold a 17,144-to-15,227 registration advantage with 8,330 nonpartisans. The seat is open. Republican Elizabeth Halseth held the seat until she resigned in February. Through June 7, Jones had raised $125,317 and spent $52,874, while St. Martin reported $123,150 in contributions and $102,708 in expenses.

■ Senate District 15 in Washoe County: Republican Greg Brower versus Democrat Sheila Leslie. Brower was appointed by the Washoe County Commission in January 2011 to the seat to replace Bill Raggio, who retired. Republicans hold a 28,177-to-26,773 registration advantage, with 11,242 nonpartisans. Leslie was a longtime state senator who quit in February when she moved into Brower's district. Through June 7, Brower had raised $239,237 and spent $105,236, while Leslie raised $151,311 and spent $44,519.

■ Senate District 18: Republican Hammond versus Democrat Kelli Ross. Republicans hold a 22,252-to-20,599 registration advantage, with 8,930 nonpartisans. The seat is a new one awarded to Clark County during redistricting but had been a Republican seat in central Nevada. Through June 7, Hammond reported $64,450 in contributions and $58,441 in expenses, while Ross raised $53,115 and spent $26,136.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.