New year could bring big changes in state

At the ripe old age of 150 years, Nevada is finally growing up.

And 2015 could prove pivotal, with Republicans in charge of all top offices in the executive and legislative branches for the first time since 1929; the Nevada Legislature set to meet; and GOP Gov. Brian Sandoval looking for a second-term legacy.

Here’s a look at issues to watch this year on the way to 2016, when the next presidential election comes around and U.S. Sen. Harry Reid, D-Nev., will be back on the ballot in a high-stakes bid for a sixth Senate term.

EDUCATION

Will major school reform pass the Legislature with the GOP running the show?

On Nov. 4, 79 percent of voters rejected Question 3, which would have imposed a business margins tax to fund education. But improving schools remains a statewide priority, and Sandoval, moderate Republicans and Democrats have all publicly supported more money for education by other means.

Sandoval will press the private sector to build more charter schools, which receive public funding. He also backs tax credits for businesses that contribute to a scholarship fund that would help students at low-performing schools attend the school of their choice.

Sandoval also wants to fund programs to ensure students can read by third grade and to expand the “Teach for America” program bringing new teachers into the classroom.

The governor and lawmakers also want to update the 1960s-era basic school funding formula to factor in a district’s higher-cost English language learners and at-risk students. Such reforms generally are opposed by union teachers and Democrats who enjoy their support.

TAXES

Will significant tax reform happen, or will there just be some tinkering around the edges?

Sandoval has twice extended some $620 million in taxes but might finally allow some levies to sunset, though the Modified Business Tax could become permanent. The MBT, a payroll tax, is the closest thing Nevada has to a business tax. Experts say it’s simple to apply and fairly stable.

Led by the Las Vegas Metro Chamber of Commerce, the Nevada business community helped kill Question 3 and now is backing unspecified tax and education reform. In December the chamber released a study outlining several tax reform options, from an ambitious overhaul to simply fixing or expanding a few existing taxes. It didn’t propose any new tax measures.

The study by the Tax Foundation included applying the MBT to all businesses with more than $62,500 in taxable wages per quarter, eliminating exemptions and rates that vary by industry. The rate could stay at 1.17 percent for general businesses or be raised to, say, 2 percent to increase revenue to more than $400 million a year.

Assembly Minority Leader Marilyn Kirkpatrick, D-North Las Vegas and a leader on tax matters, plans to push to expand the live entertainment tax to cover large outdoor events such as NASCAR, Burning Man and the Electric Daisy Carnival. She also wants to update the property tax, possibly adjusting caps, now 3 percent a year for residential properties and 8 percent for nonresidential.

There’s long been discussion about decreasing the sales tax rate on goods and expanding it to services at the same time. Now, the state’s sales tax rate on goods is 6.85 percent, but higher at the local level: 8.1 percent in Clark County, for example. Expanding the sales tax to services could raise from $150 million a year to $2 billion, depending on how broadly the tax is applied, according to the Tax Foundation study.

ASSEMBLY REPUBLICANS

Will the dysfunctional Assembly Republicans learn to get along or will the caucus be a three-ring circus?

Infighting over leadership of the Assembly Republican Caucus erupted soon after the November election, which saw a surprise shift with the GOP taking 25 seats to 17 for Democrats. While solidly Republican, the caucus is about evenly divided between conservatives who ran on no-tax-hike promises and moderates considered more open-minded on the subject.

Assemblyman Pat Hickey, R-Reno, the former minority leader, was deposed and replaced by Assemblyman Ira Hansen, R-Sparks. But Hansen landed on the griddle because of racist and sexist columns he wrote decades ago for the Sparks Tribune. Sandoval and other Republicans urged him to step down, and he was replaced by John Hambrick, R-Las Vegas.

Hambrick then removed Assemblywoman Michelle Fiore, R-Las Vegas, as the elected majority leader and chair of the Assembly Taxation Committee, citing her ongoing problems with the Internal Revenue Service over unpaid payroll taxes.

Removing Fiore, a no-new-taxes conservative, may also make it easier for Sandoval and Hambrick to sell tax reform in exchange for education reforms.

The Sandoval administration and legislative moderates are now working behind the scenes to shore up support for Hambrick, whose speakership faces a threat from his conservative faction even before the Assembly takes a formal leadership vote on Feb. 2 when the Legislature opens.

Hickey, who could hold a grudge, said he’s hopeful Republicans will put the recent power plays behind them.

“When all is said and done, I believe Assembly Republicans will come to their senses and realize there are so many opportunities for reforms that Republicans have been advocating for that it will be smart to put our differences aside and unite behind those reforms in order to see them passed this session,” Hickey said.

Hickey said those reforms include altering collective bargaining, prevailing wage requirements and construction defect legislation — issues union-backed Democrats have protected from change.

POLITICAL COMEBACKS

Which Nevada politicos will return to public service after losing in 2014?

Topping the likely list is Steven Horsford, who lost his 4th Congressional District seat to former Assemblyman Cresent Hardy, R-Mesquite, in an upset thanks to greater GOP voter turnout. The vast district includes northern Clark County and all or part of half a dozen rural counties.

The district leans heavily Democratic by voter registration, thanks to Clark County, where four-fifths of the district voters live.

As a result, Horsford, a freshman and the first to win the new seat, is expected to run to take back the district in 2016 when the presidential election and the Reid race will boost Democratic voter turnout.

Former Secretary of State Ross Miller is another top comeback prospect. It’s unclear, however, if he would try another run for attorney general after losing a close race to Republican Adam Laxalt.

Miller wants to follow in the footsteps of his father, Bob Miller, as governor one day.

His path may run through the attorney general’s office, although speculation is that he might instead run for lieutenant governor, becoming the No. 2 in the state, or leap ahead and run for governor in 2018.

Others young enough to consider another run for public office include former Assemblywoman Lucy Flores, D-Las Vegas, who lost the lieutenant governor’s race; former state Treasurer Kate Marshall, who lost the secretary of state’s race; and outgoing Controller Kim Wallin, who lost a bid to replace Marshall as treasurer.

PRESIDENTIAL RACE

Who can win Nevada?

As an early voting state, Nevada will see all the top presidential candidates — Republican and Democratic — visit Las Vegas many times in the coming year. In fact, several already have stopped by in recent months, including former Secretary of State Hillary Clinton, a Democrat, and former Florida Gov. Jeb Bush, a Republican.

It’s too soon to say which presidential candidates might find favor in Nevada, although Clinton split the Democratic caucus vote in 2008 when she ran against Barack Obama.

U.S. Sen. Rand Paul, R-Ky., might also have a leg up on potential opponents thanks to strong Silver State support for his father, former U.S. Rep. Ron Paul, R-Texas, a two-time GOP presidential candidate.

Behind the scenes, a long list of GOP hopefuls are already jockeying to gain favor with Sheldon Adelson, CEO of the Las Vegas Sands Corp., who could single-handily fund a White House bid. Adelson donated between $100 million and $150 million to GOP political candidates and causes in 2012, shoring up Newt Gingrich’s campaign for months before switching to GOP presidential nominee Mitt Romney after Gingrich finally dropped out of the White House race.

Adelson is considering starting his own political action committee this time around, according to published reports.

Contact Laura Myers at lmyers@reviewjournal.com or 702-387-2919. Find her on Twitter: @lmyerslvrj.