Sandoval calls for sacrifice by Nevadans; Democrats may seek higher taxes

CARSON CITY-- Gov. Brian Sandoval in his State of the State address mapped out what he says will return prosperity to Nevada, but the path he proposes calls for sacrifice from state workers, school systems and local governments.

The newly elected Republican governor wants to reduce state government spending to 2007 levels, largely with cuts to K-12 and higher education, health and human services and corrections.

The cuts were detailed in a prepared copy of Sandoval's first State of the State speech, which braces the public for reduced spending with assurances that Nevada will be better in the long term if state government doesn't increase taxes.

"Some believe government is the only solution," Sandoval said in the chambers of the Assembly. "I disagree."

However, in a pre-recorded response aired after Sandoval's speech, Assembly Speaker-elect John Oceguera, D-Las Vegas, hinted at the possibility that the Legislature, now controlled by Democrats, might seek to increase taxes against Sandoval's will.

"We know it is never a good time to raise taxes," Oceguera said in his speech, a copy of which was provided to reporters before the broadcast. "There is never a good time to fire employees. But this is the right time to shoulder our responsibility and do the right thing for our state. As the governor said, it is time for a shared sacrifice."

It would take a two-thirds majority of the Legislature to impose any tax increase, meaning every Democrat in both houses -- along with two GOP Assembly members and three Republican senators -- would need to support such a measure.

The governor acknowledged recession-battered Nevada leads the nation in unemployment, home foreclosures and bankruptcy. He urged residents to be patient while his proposals to reform education and boost economic development are put into action.

"In this time of sacrifice, our Nevada family looks to us for reassurance, for solutions and for leadership," Sandoval said.

The four-part speech tackled the state budget, education, economic development and education.

Sandoval seeks to spend no more than $5.8 billion during the 2011-13 budget cycle, a decrease of 6.45 percent from the 2009-11 period. The proposed spending total reflects the amount of general fund revenue the state's Economic Forum estimates will be collected through taxes, fees and other sources.

Sandoval, who won the 2010 election by a landslide margin, campaigned on a promise to oppose tax increases throughout his term, even if it means making painful spending cuts.

In his speech, Sandoval contrasted his budget with proposals from state agencies that called for as much as $8.3 billion in spending to maintain services.

"We rejected that premise," Sandoval said. "The population of Nevada has declined, yet the proposed budget would have increased state spending by 34 percent. That kind of math made no sense."

Major spending cuts in Sandoval's proposed budget include a 5.2 percent cut in spending on K-12 education. That equates to about $270 less per student in each of the two years of the biennium.

"While this is not ideal, I believe the reductions are within reason if the education establishment is willing to make real changes in how those dollars are spent," Sandoval said.

Clark County School Board President Carolyn Edwards, in Carson City for the speech, called the proposed education reductions discouraging.

"It's going to be very hard for us to do," Edwards said.

Without any reductions in state aid, the Clark County School District was already anticipating a budget shortfall of $180 million.

Higher education spending would be reduced by nearly 18 percent, a total inflated by the evaporation of one-shot funding in the last budget cycle that came from the federal American Recovery and Reinvestment Act, or stimulus bill.

Sandoval also proposes reducing the amount of money school districts need to hold in bond reserve accounts, a move he says will save districts $425 million that can be spent to offset the loss of state funding.

He wants to couple the spending cuts with education reforms he says will improve schools.

"While many teachers, professors and students are excelling, collectively they are held back by an antiquated system that emphasizes too many of the wrong things," according to the written speech. "Educators who are effective at teaching and leading schools are paid exactly the same as those who are failing."

Sandoval wants to reduce restrictions on how state money in schools is spent and issue funds in block grants for local districts to spend as they see fit.

He also calls for an end to teacher tenure, a proposal criticized by Ruben Murillo, president of the Clark County Education Association, which represents district teachers in contract negotiations. Teacher contracts are negotiated between the union and the district. The state is not involved.

"I can't believe he's asking for that as much as teachers have had to sacrifice over the last several years in terms of higher class sizes and other mandates that are being put upon them by school reform," Murillo said. "Asking teachers to do more in the face of cutting salaries is just a slap in the face."

Longevity increases are expected to cost the Clark County district $33 million next year, according to district officials. Pay increases based on professional growth are expected to cost the district another $7 million. Without any concessions from the unions, the district expects to pay $40 million next year for those types of employee salary increases.

Democratic leaders oppose the way the governor characterizes his education cuts.

One Democratic legislative aide not authorized to speak on the record said Democrats in the Legislature plan to accuse Sandoval of soft-pedaling his cuts.

They will argue that in reality education would be cut as much as 15 percent once all the details are factored in.

They also will peg the governor's true higher education cuts at around 30 percent, the aide said.

"There is going to be a lot of discussion about the fact this is a bigger cut than the governor has made it out to be," the aide said. "The education cuts are staggering."

Sandoval also calls for eliminating the state worker job furloughs that shaved 4.6 percent from the cost of payroll in favor of a 5 percent salary cut. The change means that instead of working fewer hours for less pay, workers will go back to full schedules at a reduced salary.

The change also saves $90 million in retirement costs because the furlough program didn't reduce employer contributions to the retirement program.

Senate Majority Leader Steven Horsford, D-Las Vegas, is expected to respond to Sandoval. Horsford has called a press conference with legislative leaders following Sandoval's press conference.

Horsford has been a vocal critic and opponent of education spending cuts and has called on major industries in Nevada, such as gambling and mining, to pay more taxes to improve schools and universities.

Review-Journal writer James Haug contributed to this report.

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