It was not a good day for state Treasurer Dan Schwartz.
During testimony in both the Assembly Ways & Means Committee and the Senate Finance Committee, Schwartz faced serious questions over his real-life office budget as well as his “alternative” state budget. Turns out, neither one was complete or ready for lawmakers’ questions.
Schwartz scrambled to answer Ways & Means members’ questions, and had to promise to get more information to lawmakers by next week. But it was in the Senate Finance Committee that both Republican and Democratic lawmakers slammed him for his “alternative” budget.
Apparently, the “alternative” budget (really just a three-page news release that seeks to replace Gov. Brian Sandoval’s proposed progressive business license fee with a combination of other taxes and cuts) didn’t impress.
Among the questions:
• Why? Schwartz has taken a lot of heat for proposing — in his official capacity, on his official letterhead and using official resources — a budget at odds with the one created by the statutory system, proposed by the governor and debated and approved by the Legislature.
In his defense, he says the law allows for it. (SEE, NRS 266.120(1), which says “The state treasurer shall provide information to either house of the Legislature, whenever required, upon any subject connected with the Treasury or any duty of his or her office.”) But since neither house has apparently asked for his opinion, one cannot say it was “required.” So this statute doesn’t apply.
Also, he’s cited Sandoval’s challenge to critics to propose alternatives if they don’t like the gubernatorial alternative, and the governor’s pledge that he’s willing to listen to other ideas. But the governor probably meant viable alternative ideas, which leads us to…
• Huh? Schwartz’s budget initially relied on a per-passenger “head tax” for people moving through airports in Reno and Las Vegas, until he discovered that idea was prohibited by federal law. Whoops. (That left a $450 million hole in Schwartz’s two-year budget.) “That was my mistake, something I should have checked on beforehand,” Schwartz admitted today, according to the Reno Gazette-Journal’s Ray Hagar.
Instead, Schwartz has proposed a “meal-receipts tax,” a 25-cent fee on any meal purchased in a Nevada restaurant, bar or resort. He admitted that he didn’t know how much that tax would generate, Hagar’s story says. But that leads us to…
• Told you so: If nothing else, Schwartz’s fiscal gymnastics admit of a simple truth: The state needs more money than it takes in, unless you want to see severe cuts to education and other state services. (To be sure, Schwartz questioned some of the governor’s spending, including on autism education only to run into a phalanx of critics who supported it. He was left to limp away claiming he’d only “raised the question,” not that he’d said the program should be scrapped.)
But whether it’s Sandoval or Schwartz, there seems to be some consensus building that the state’s existing system doesn’t provide sufficient income to cover its needs. This has been obvious to anybody who’s been paying attention for years. (The Nevada Policy Research Institute, a dark-money policy advocacy shop, is a rare exception.)
But let’s get back to…
• Bad! That’s a bad state treasurer! Lawmakers, especially Schwartz’s fellow Republicans, were unsparing in their criticism. Senate Majority Leader Michael Roberson, R, Henderson, called Schwartz’s budget “an absurdity” that was “disrespectful” to Sandoval and the state budget process.
“I’m in shock and dismay that you would be here today proposing this. I’m embarrassed for you, sir,” Roberson said, according to the Review-Journal’s Sandra Chereb.
“I have no embarrassment whatsoever over what I proposed,” Schwartz told Roberson, a statement all the more shocking in that it is probably 100 percent true.
Finance Committee Chairman Ben Kieckhefer, R-Reno, worried aloud that Schwartz’s move would be seen by credit rating agencies as a sign the state’s investment portfolio might not be in good hands. “Ultimately, there are consequences,” he said. “I find this to be at best in poor judgment and at worst an incredible risk.”
Even Sandoval chief of staff Mike Willden got in on the act, saying he was “insulted” at Schwartz’s attack on “a fair and reasonable [governor’s] budget” that took months to research and produce. “I’m offended by the lack of research” in Schwartz’s alternative, Willden said, according to the Las Vegas Sun’s Cy Ryan.
It shouldn’t be lost on anyone that Republicans led the charge here, even if conservatives will accuse them of being pro-tax RINOs. Typically, a party will close ranks around a fellow member who’s under fire, and would rather stare into the noonday sun than admit one of their own is wrong. Legislative Republicans could have simply ignored Schwartz’s plan — as history surely will — but instead they put themselves on the record strongly opposing it, a move that’s not risk-free politically. But it was nonetheless the right thing to do.
In response, a wounded Schwartz called the Senate Finance Committee “a kangaroo court,” according to Hagar.
“I’m not sure why they brought me here,” Schwartz said. (Answer: For the committee’s review of departmental budgets, in which all constitutional officers and department heads appear and make presentations before lawmakers charged with passing budget bills. Welcome to Nevada, sir.)
“They were not paying attention to the budget I outlined,” he added. (Actually, it seems as if Schwartz’s real complaint was that the committee’s members were paying far too much attention to the budget that he outlined.)
Said Schwartz: “As I said, this is an evolutionary process, we had some great, straight numbers put out there and they were totally disregarded.” (Really? Like the airport head-tax numbers? Or the not-sure-how-much-this-will-bring-in meal tax numbers? And it appears Schwartz doesn’t realize that evolution is the process whereby simple life forms transform into more complex forms while adapting to their environment; his three-page alternative hardly compares to Sandoval’s thick, complete and balanced budget.)
One more? OK, sure, why not: “This is their party and they can play it the way they want to. No one asked us to send any testimony. This was a tagged event.” (Wait, no one asked you to send any testimony to the committee that you were about to appear before and offer live, in-person testimony? That is … totally not odd at all. And if there was a “tag” for this event, it would have to be #ohmydearGodinheavendoelectionshaveconsequencespleaseJesusIpromisetovotefromnowon.)