Sandoval budget gives business leaders pause

By Jon Ralston

Sunday, Dec. 12, 2010 | 2:01 a.m.

The voice on the other end of the line radiated frustration.

One of the state’s most successful businessmen was on the phone and he was beside himself — as he said others are — about the upcoming legislative session. But, specifically, about Gov.-elect Brian Sandoval.

“There are a lot of very smart people, and we are all just shaking our heads,” said the business leader, to whom I granted anonymity so he would talk freely. “There were a lot of people who thought he (Sandoval) would get elected and soften his rhetoric.”

Trust me, dear readers, this man is no tax-happy lunatic. He is a thoughtful guy whose business has taken a gigantic hit during the Great Recession. But he — and he says several others who have been meeting to discuss the state’s future — are concerned that the governor-elect’s inflexibility on new revenue could be an impediment to the state’s economic future, especially if cuts in education are implemented.

“The business community is speaking as much as ever with one voice,” he told me. “It’s happening.”

I have heard about this convergence for months, with gaming and mining and chamber types realizing that the lack of a long-term plan while enacting devastating cuts could … obviate the need for a long-term plan.

“If those cuts happen, we’ve gone so far back,” he lamented before his frustration resurfaced. He fretted “people will not stay engaged” and that it “will take 20 years to get back” to a low level of service.

I have picked up on this frustration from other engaged business types, who are sick of the partisan maneuvering and the binary “to tax or not to tax” discussion. And they were counting on Sandoval to be the leader who could move the state beyond it.

“Everyone says he’s a good guy, a smart guy,” he confided. “But they wonder why he is doing these dumb things. He’s not doing what politicians do, which is say what you have to do to get elected, then soften the rhetoric.”

Alas, many folks will hear that and cheer Sandoval for refusing to holster his no-tax guns. As I have written before, Sandoval, who developed a reputation as that good, smart guy, was so afraid of Gov. Jim Gibbons in the primary that he so hopelessly boxed himself with no-new-taxes rhetoric that he has no wiggle room. You cannot soften that rhetoric; you can only contradict it, and he appears unwilling to do so.

I still think Sandoval could have hinted at a billion-dollar tax increase and still defeated Rory Reid because people were simply not going to elect two of that family to the state’s highest offices. Just as more people in 2006 voted against Dina Titus than for Gibbons, I’d guess more people voted against Rory Reid because of his last name than for Sandoval.

Granted, Sandoval has a reservoir of goodwill just because he is not Jim Gibbons. But that could evaporate very quickly because he said so little during the campaign to engender support, other than he wasn’t the guy named Reid.

The business leader told me many in the community embraced state Senate Majority Leader Steven Horsford’s claim this year that the budget needed $1.5 billion in cuts and $1.5 billion in new revenue. “The challenge for him (because of Sandoval’s opposition) is that one of the easiest ways to get (part of the way) there is to not sunset taxes and keep the furloughs,” he said.

My phone pal argued that Sandoval and lawmakers should paint “a realistic picture of what we are talking about with these budget cuts.” But he also acknowledged the political dynamic beyond Sandoval: “A number of people were elected on an anti-tax platform so there are a lot of mini-Sandovals running around right now. We have to turn a few of these people around. It’s just a challenge.”

He added, “We could craft a package; we will craft a package. The solution is not difficult; the politics are difficult.”

Ah, the gift of understatement.

He hung up. But then he called back almost immediately to make two more points. One was that the budget deficit should be pegged at closer to $3 billion by all the politicians to establish a large enough target for negotiations. But, more importantly, he said, “Anybody who is talking about economic diversification — that’s the political buzzword — can’t start by cutting the higher education budget. Study the states that are successful and it starts first and foremost with the higher education system.”

The lesson: Myopia (just cut) by those driving the state will lead to a deadly crash (irreparable damage to the quality of life) down the road.