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Sandoval keeps tax promise as Legislature nears end

CARSON CITY — When the 2013 legislative session adjourns at midnight June 3, Gov. Brian Sandoval and Republicans can tell Democrats “I told you so.”

The GOP informed Democrats long before the session began that they would not support any new tax increases — but would continue $649 million in so-called temporary taxes that otherwise would expire June 30.

Unable to pick up the four Republican votes needed to secure a two-thirds majority to pass additional taxes, Democrats have failed to do anything to boost state revenue.

So little happened in Carson City this year that, barring an earthquake toppling the Capitol, the 2013 session will be remembered as the most uneventful in decades. There is little excitement in the Legislative Building, hardly any emotion over pushing the hundreds of bills calling for mostly technical changes to state laws.

One veteran legislative staff member called 2013 “the session that never started.”

He was right. Through Thursday, just 12 of the 1,031 bills introduced during the session had been signed into law. If a bill cost money to implement, it went nowhere.

But while Democrats might not win their battle for new education money this session, they might win their war for taxes and education in the long run. In 2014, voters will be asked to support a 2 percent business margins tax proposed by the state teachers association. The measure would bring in an estimated $800 million more a year for public education.


So what has been the biggest difference from past sessions?

Republicans have kept their word not to levy new taxes. Neither the Democrats’ plan to raise $255 million for education through higher payroll taxes nor the $50 million plan to levy and broadly apply an 8 percent entertainment and admission tax stands any chance of passing, unless Sandoval commits re-election suicide by backing tax increases.

He has vowed to veto both tax bills, as well as a Senate Republican plan to place before voters a proposal to raise $300 million a year for education through a 10 percent mining tax. Democrats have not even introduced their long-range plan to appropriately fund state government, probably a corporate profits or gross receipts tax plan. Why would they introduce it now, two weeks before adjournment, if there aren’t votes to pass it?

“The idea there was going to be major tax reform was laughable from the beginning,” said Eric Herzik, a political science professor at the University of Nevada, Reno. “Democrats didn’t have a bill, or a plan before the session. You aren’t going to work that out in the brief time they are meeting.”

But that’s not bad, according to Herzik.

“Compared to the last three sessions, this was the best session,” he said. “The governor was more skilled. He put what money there was into full-day kinder­garten and English language learning, the areas where it was most needed and can improve education performance the easiest. No one was laid off. The Democrats are going to have a hard time recruiting a good candidate to face him in 2014.”

Sandoval prefers not to gloat now. He will wait until after the session adjourns to make statements.

Instead he said the comments he made in his State of the State message Jan. 16 still ring true.

“I committed to taking the steps necessary to get every Nevada child to read by third grade. As more resources have become available, I have continued to invest in our children’s education. We must provide our children with the skills they need to compete in the 21st century. This approach should be one that is comprehensive and includes school choice, funds English language learner programs and reduces class sizes for kindergarten. However, we must be mindful that while Nevada’s economy is growing, we must avoid actions that will slow our economy. Tax increases will only hurt job growth. I have no doubt we can fund our state’s priorities without increasing taxes.”

But Democrats have a hole card. They could refuse to act to reauthorize the continuation of the temporary taxes unless Republicans back other tax plans. That step would force the governor to call a special session since the state’s $6.5 billion general fund budget would not be balanced on June 3.

Senate Majority Leader Mo Denis, D-Las Vegas, hinted at this strategy in an informal talk Thursday, but he is well aware of the public outcry that would come if the Legislature went into an extended session — one that probably would cost $50,000 a day.


Of course, Denis and Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, won’t be giving up yet, at least not until May 29, the day when they must introduce the bills that fund state government for the next two years.

Denis still hopes for a miracle.

“It is the right thing to do,” Denis said about the tax increases. “Our kids cannot wait any longer for lower class sizes and English language learning. I am tired of us being last in education achievement.”

Education Week in January actually ranked Nevada the second worst school system in the nation, with the lowest graduation rate, 59.2 percent, and the second lowest per pupil expenditure rank, $8,419. Only North Dakota was worse.

Since that study, the state’s two top public school educators have fled. State Superintendent of Instruction James Guthrie either resigned or was fired by Sandoval after a scant year on the job. He had a tiff with Democratic legislators over the need for smaller class sizes. Also, Clark County School District Super­intendent Dwight Jones bailed after two years on the job to care for a sick mother.

Denis is a former state PTA president. His wife teaches a first-grade class with 24 students, eight more than what it was supposed to be under the class size reduction launched by Gov. Bob Miller in 1991. As a kindergarten teacher, she taught 34 children.

Kirkpatrick began her public career as a PTA member and Girl Scouts volunteer.

“Since I was first elected to the Legislature (in 2004), my No. 1 goal has been improving education,” Denis said. “That’s what our constituents elected us to do. Spending more on education is an issue that everyone now agrees on.”

Senate Republicans led by Minority Leader Michael Roberson, R-Las Vegas, are even proposing a question to let voters decide whether to increase mining taxes by $300 million a year to fund public education. Sandoval and Assembly Republicans oppose the Roberson plan. Like the Democrats’ calls for taxes, it’s destined to die.

Sandoval, however, has increased education spending by $484 million in his budget. Much of the new money was earmarked for full-day kindergarten and English language learning, two areas Democrats identified as of greatest need on Jan. 9, as did he in his State of the State address.

Democrats say that is not enough, contending only about $135 million goes to improvements, the rest to covering increased enrollment. Still when the session began Feb. 4, only $45 million was dedicated for improvements.

But Democrats have not done anything to endear themselves to Republicans. They gave scant attention to the GOP’s goals of reforming the Public Employee Retirement System, the prevailing wage law and the construction defects law.

At one point, Assembly Minority Leader Pat Hickey, R-Reno, suggested his party might look favorably on the tax bills if the Democrats would pass their bills, bills they asserted would reduce state spending and help revive the economy.

Nothing changed.


Republicans may prevail in the tax battle of 2013, but in the long term the Democrats can become the winners in their quest to provide much more spending for education.

Voters in the 2014 general election will decide whether to enact the Nevada State Education Association’s 2 percent business margins tax — a tax that sponsors say would bring in $800 million more a year for public education.

In the same election, voters also likely will vote on Senate Joint Resolution 15, a proposed constitutional amendment that would remove the requirement that mining must be taxed at a 5 percent rate of the selling price of minerals, minus deductions. With approval, the Legislature could come back in 2015 and levy higher mining taxes.

Don’t forget that the Democrats in 2011 tried to pass a business margins tax but were blocked by Republicans. Now they can let the voters do it for them.

Sandoval said he will campaign against the teachers tax, but a Retail Association of Nevada poll showed it could win public approval.

Expect the teachers to spend millions of dollars on ads to pass the question, and businesses to spend millions to defeat it.

Denis insisted his goal was providing money for education now, not waiting until 2015. But he concedes that with voter approval of the two questions, future Legislatures would have the money they need to fund education and state government sufficiently.

“It’s also going to take two, three, four years to implement them (the ballot questions). We cannot wait when we should be doing something for education now.”

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

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