Sun set on session, but it’s not pretty

By Jon Ralston

Wednesday, April 29, 2009 | 2:01 a.m.

“Sunrise, sunset, sunrise, sunset, swiftly fly the years, one season following another, laden with happiness and tears.”

— Fiddler on the Roof

The session that began with so many rays of hope — Democrats with a plan! — now seems destined to end with sunsets that will not be pretty — sunsets on taxes, sunsets on careers, sunsets on thoughtfulness and sunsets on comity.

In just two days the state’s Economic Forum will meet and conclude, most insiders believe, that its previous projections need to be revised downward by about half a billion dollars. And when that happens, all of the marriages of convenience that have seemed to work so well during the session — Speaker Barbara Buckley and Senate Majority Leader Steven Horsford as well as Horsford and Senate Minority Leader Bill Raggio — will be at risk.

Tevye may have been feeling nostalgic, but these little girls and boys are not blossoming under the heat of responsibility as much as they are wilting under the dark reality. Not much happiness this time of session in the capital, but not too many tears shed, either, which may be the problem.

Consider: The Economic Forum is likely to declare that projected revenue has plunged from $5.6 billion to closer to $5 billion — and the original administration budget was $6.2 billion. That does not even include other potential drains on the state coffers such as property taxes, which the forum does not project but which the capital treasury must pay to the school districts if their revenues fall short.

So just to get to the level of spending that The Man Formerly Known as Governor had in his budget — an amount that legislative leaders have strained their adjectives to decry — may require $1 billion or more. And lawmakers don’t even want to consider that number because they will do anything not to exceed the $833 million raised by the largest tax increase in history six years ago.

So the sunrise of January, where the newly christened Democratic team promised a new day in Carson City, is giving way to a May sunset clouded by a sagging economy and political considerations.

Raggio is insisting that any tax increases have sunset provisions, which will automatically create a budget hole next biennium because those taxes will fund ongoing programs. Add in hundreds of millions of dollars in stimulus funds that may fill some of the budget gap — funds that will not be around in two years — and a new governor and Legislature will be greeted with the largest deficit in history. That will be some sunrise in 2011.

So now the issue is not what the best policy might be but what number they can get through. Some legislative sources say the Republicans in the Senate will not vote for more than $600 million in tax increases — and that number is unlikely to reach the level of the administration’s spending plan.

The scary news for Democrats — and even more frightening for local governments, especially in Southern Nevada — is that to drive the tax increases lower, there is only one pot of money to raid. And that puts legislative leaders in a different marriage of convenience, one they may never have anticipated, one with the man across the courtyard whose budget they have excoriated. “They look so natural together ...”

The administration and most lawmakers have signaled they have no qualms robbing from local governments to solve their problems, leaving the municipalities and counties to feel the electorate’s wrath. “If they shift their collective focus to non-tax funding sources (to stay under the $833 million increase in 2003), local governments should be very, very concerned,” suggested one insider.

Anyone who has watched legislative sessions for any length of time knows the sun never sets on lawmakers salivating over local funding sources. And diverting money is not the same as raising taxes, right?

That’s just one of the scenarios bouncing around the backrooms these days as lawmakers struggle to decide how to make the numbers add up. The administration is likely to abdicate any responsibility for fixing the burgeoning hole in its budget, arguing that after the State of the State the spending package belongs to the Legislature. And besides the usual gimmickry — targeting local governments, imposing time-limited taxes — lawmakers are unlikely to approve much more than the original budget.

The legislative years fly swiftly by, but if you have seen one legislative ending, you have seen them all. Lawmakers talk a lot but the administration budget rarely gets changed that much.

And so, a month from now, I’d guess the budget’s sunset will not look much different from its sunrise.