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October 17, 2017

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jon ralston:

Numbers tell state budget’s back story

As a new administration forms and an incipient Legislature prepares, with all the chatter of confrontation vs. compromise, The Great Budget Debate of 2011 is simple: It’s all about numbers.

But not just one set of numbers.

Of the 64 people who will make the major decisions next year on how Nevadans live, 31 are new to their capital jobs. The breakdown: One new governor, 10 new senators and 20 new assemblymen.

The numbers inside these legislative counts are important, too. Seven of the 10 new senators are current assemblymen, so they are not pure rookies. And one senator (Maggie Carlton), unable to bear the thought of being titleless, was elected to the Assembly. But that still leaves 22 newbies dealing with the greatest financial cataclysm this state has seen.

(One other number to remember: Six. That’s the number of term-limited lawmakers, including Speaker John Oceguera and five senators, who may behave differently — at least those not eyeing higher office.)

And what of the most important newcomer of all, Gov.-elect Brian Sandoval? Like the previous occupant, he was a lawmaker before leaving the capital for many years to pursue other ambitions. Like his predecessor, Sandoval spent the campaign declaring “no new taxes,” with his most unequivocal declaration of closed-mindedness coming, ironically, on a radio show hosted in March by Dawn Gibbons, whose ex-husband Sandoval succeeded. (Nevada: The land of political incest, where everyone is somehow related or will eventually be interviewed by the ex-spouse of the man you defeated.)

As much as he sounds like him, though, Sandoval is not Jim Gibbons. He has sent signals of outreach to legislative leaders and his first hires and retentions have been superb. Like a man he greatly admired, Kenny Guinn, Sandoval talks about a fundamental restructuring of the state budget and, as Guinn did, a two-session solution. “We have a short-term track, where things will have to be done differently,” Dale Erquiaga, a senior adviser to the incoming governor, said this week on “Face to Face.” “The long-term track, what will play out in the next biennium, is to restore Nevada to where it was before.”

Promises, promises. But Sandoval has, thanks to his colloquy with the former first lady and many others, encased himself in a box from which there is no exit. Which brings me to the next set of important numbers:

14 and 28. Those are the numbers that advocates of infusing new revenue into the budget will need in each house to pass a tax increase and override the immovable governor. It’s certainly not impossible with Democrats controlling both houses (11 and 26 members, respectively). I see a pool of three or four possible Republican votes in the Senate and close to the same in the Assembly. (I won’t cause those Republicans any problems by naming them just yet, but they know who they are.)

I believe the key to any revenue package — which probably would have to include a tax decrease (repealing the payroll tax?) with a tax increase (some form of new business levy that would not crush folks in this economy) — is providing political cover for those potential GOP votes. That would mean that groups such as chambers of commerce, retailers and manufacturers would have to be onboard — and they are not clambering on any tax bandwagon, even though some are open-minded, without a quid pro quo. And that surely would take the form of public salary/benefits and education reform, both of which will have wide support in the Legislature and from Sandoval.

And that brings us to our final set of critical numbers: $1 billion or $3 billion. The state’s budget czar, Andrew Clinger, who first came up with the larger figure, recently said the state will have about $1 billion less than is needed to balance the budget. But that does not account for the $1.1 billion in lost funding, mostly stimulus, or the $200 million in increasing Medicaid costs. And the total requests from agencies — yes, they can be pared — put the shortfall before any cuts or furloughs at $3 billion.

Few budget experts believe the state can afford not to infuse some revenue. Maybe Sandoval will pilfer from the locals to make it work. Or maybe lawmakers will override his inevitable veto and pass a tax package. But my fear is no resolution will come until one other, unrelated set of numbers is considered, the ones that determine how many legislative seats will exist North and South and how many Democrats and Republicans will be in Congressional District 4.

Those numbers, in the end, sadly, may be the most important ones of all.

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