ATTENTION TAXPAYERS: GET READY FOR ROYAL SCREW JOB!
Pop quiz: What was Gov. Brian Sandoval’s proposed general fund budget in January 2011?
If you answered $5.8 billion, you are correct.
In fact, if you type “Gov. Sandoval $5.8 billion budget” into Google, you will find (at the time I checked this morning) 9,710 entries reporting on the governor’s $5.8 billion budget. That’s a key to this column. Keep it in mind; I’ll get back to it later.
Fast-forward to last week’s Supreme Court ruling ordering Gov. Sandoval to remove $62 million worth of funding - which was “raided” from the Clean Water Coalition - from his revised general fund budget of $6.1 billion dollars – which was increased by roughly $300 million in early May thanks to rosier revenue projections from the Economic Forum.
So the simple fact is this: All the governor HAS to do, because all the Supreme Court has thus far ORDERED him to do, is subtract $62 million from his $6.1 billion revised general fund budget, and the new general fund budget would still be over $6 billion….which will still be about a quarter-million dollars over and above the governor’s proposed general fund budget of $5.8 billion in January.
And no need whatsoever to extend the sunsets.
Let me also remind you that in January, and for the better part of four months since introducing his $5.8 billion general fund budget, the governor has said he will not increase taxes, will not approve extending any of the 2009 tax hikes which are scheduled to “sunset” at the end of this month, and will not negotiate tax hikes or sunset extensions for reforms.
Now here’s the problem….
While the Court has only ordered the governor to give back $62 million, some in the administration, including the governor himself, fear that future court decisions *might* order him to subtract other funds from him budget which are vaguely similar, but anything but identical, to the $62 million CWC fund.
Make no mistake, there’s no guarantee any of the local subdivisions will even bring additional lawsuits, let alone win them. I mean, if the locals really want to play hardball and sue to keep their little pots of gold from the state government…fine. The state government can then simply say, “OK, you want to keep that $200 million; here’s $200 million of government services we’re not going to pay for any longer. You pay for them.”
Do the local governments really want to play this game of budget chicken with the state?
And again, using surplus reserve funds for school construction which are over and above what was promised for school construction is not the same as using dedicated funds earmarked for a wastewater treatment project that was never built. So there’s simply no reason in the world for the governor to concede preemptively that the courts would rule against him in additional lawsuits if brought.
But let’s say lawsuits are filed; and let’s say nine-to-twelve months from now the Supreme Court orders the state to return certain pots of money that are currently being used to fund state programs to educate our children, feed the hungry and house the homeless. If so, the governor will likely have to call a special session to either cut spending or raise taxes….or maybe just use additional revenue that likely will continue to come in thanks to an improving economy without either raising taxes OR cutting spending.
The point is, *IF* the Supreme Court issues such an order, it will be the Supreme Court, not the governor or the Legislature, that will be ordering budget cuts or tax hikes. And if the justices wishes to legislate the budget from the bench, let ‘em. And then let the voters/taxpayers deal with them in 2012 the way voters dealt with justice in 2004 after their Guinn v. Legislature debacle in 2003
This is exactly why it is critical for Nevadans to retain their right to vote for our judges!
But for argument’s sake, let’s look at this from Gov. Sandoval’s point of view.
The governor does not want to risk losing any future lawsuits, or have those lawsuits hanging over the state’s head for the next year; nor is he exactly thrilled with the notion of having to call the Legislature back into a special session to deal with any possible future lawsuit losses. Instead, he wants to short-circuit the process and concede defeat before any other lawsuits are even filed.
As such, the governor is arguing that the state might somewhere down the road be ordered by the Court to give back some $600 million worth of funds and, therefore, wants to just go ahead and make $600 million worth of adjustments to his budget now rather than risk having to make them later.
OK, fine. In that case, here are the two options the governor could/should have:
1.) He could keep his word and reduce his current $6.1 billion general fund budget by $600 million and declare that the state needs to live within its means and, thanks to the Supreme Court, that means a $5.5 billion budget. Scalpel!
2.) Split the baby and subtract out the $300 million worth of additional spending the governor added to his $5.8 billion general fund budget in May and extend $300 million worth of the sunsets, keeping his general fund budget at the $5.8 billion level he originally introduced while promising he would not increase taxes or extend the sunsets.
As I’ve said before, I prefer Option #1….but can live with Option #2 and won’t crucify the governor if he gets some significant reforms in return.
The problem is it appears the governor may be going after Option #3.
Option #3 is to extend all of the $600 million worth of sunsets in order to continue spending the $300 million worth of new spending added to the governor’s budget in May before the Supreme Court ruling. In other words, they want to use the Supreme Court decision to have their cake and eat it, too.
If the governor wants to break his word and extend half of the sunsets so as to maintain his original general fund budget of $5.8 billion – a figure he himself said was adequate to run the government – while getting some significant reforms, then I’m not going to beat up on him.
But if he wants to extend ALL the sunsets just so he can spend that additional $300 million above and beyond his original $5.8 billion proposed general fund budget….well, Houston, we have a problem.
Which brings me back to my opening pop quiz: What was Gov. Brian Sandoval’s proposed general fund budget in January 2011?
And again, we all know it was $5.8 billion. But when I inquired of Budget Director Andrew Clinger this morning as to why the new proposed budget in the reported deal being negotiated with legislative Democrats was $300 million above the $5.8 billion figure, his response was: “The Governor’s budget wasn’t $5.8B in January it was $6.4B.”
Wha…wha…WHAT?
Yep, according to Mr. Clinger, we’ve all been using the wrong figure for four months and it’s all the media’s fault. “I can’t help the fact the media focuses on the general fund number.”
So the administration has allowed the media, without objection or correction, to use the $5.8 billion figure for over four months now….and suddenly the “real” budget figure is conveniently $600 million higher? What the hell are these people trying to pull?
Now, to be fair, this whole budget mess is EXTREMELY complicated. And our CEO, Dan Burdish, is right now trying to get a meeting with Mr. Clinger to see if he can make any sense of this seemingly absurd claim.
And I’m going to continue, for now, giving Gov. Sandoval the benefit of the doubt and will wait to see if Mr. Clinger can show us that the administration is not trying to take advantage of the Supreme Court decision to jack up spending by $300 million by extending the sunsets that really don’t need to be extended at all because the Supreme Court has only order the governor to give back $62 million, not $600 million.
But I am now in full “trust but verify” mode…and while I might not be from Missouri, I still want them to show me. And if they can’t….all bets are off. Stay tuned, Batfans.
FIRST FRIDAY HAPPY HOUR!
The next “star-studded, fun-filled, action-packed” First Friday Happy Hour will be on June 3, 2011 at Stoney’s in Las Vegas from 5:00 to 7:00 pm. Our special VIP guests will be UNLV basketball coach David Rice and 2nd congressional district candidate Mark Amodei. Free parking, no cover charge and 2-1 drinks. First Friday is co-sponsored by conservative talk-show host Alan Stock and and KXNT 100.5 FM/840 AM.
CONSTRUCTION DEFECTS & LET’S MAKE A DEAL
When Assembly Republicans were in a position of weakness several weeks ago, they preemptively sent Assembly Democrats a list of five demands that would have to be met before they would vote for any extension of the “sunsets” – tax hikes passed in 2009 which are scheduled to expire at the end of June.
And one of the five demands was reform to the “construction defect” law which has allowed the stinking ambulance-chasing trial lawyers to figuratively rape small construction companies with frivolous lawsuits for years.
Naturally, the Democrats just blew the Assembly Republicans off.
But with last week’s Supreme Court ruling that took at least part of Gov. Sandoval’s funding stream away from him, the governor is now negotiating with Democrat leaders for a possible extension of some kind for at least some of the sunsets. And because he can, instead, cut more money from his budget rather than extend the sunsets - and has the votes to back him up in the Senate - the governor is in the catbird’s seat.
Sort of.
Word on the street is that the Democrats are willing to concede, to some degree, on four of the five Assembly GOP demands, but not on construction defects. They are, after all, a subsidiary of Trial Lawyers, Inc.
And the governor, apparently getting some serious concessions on education reform – including changes to tenure and “last in first out” – is reportedly willing to accept a deal without including construction defect reform, asserting that it is private sector reform and not government sector reform.
I disagree. Changing the law to curb lawsuit abuse that is putting construction companies out of business and construction workers out of work is absolutely good government reform. Indeed, it is clearly an important part of the government’s economic development efforts. But I digress.
The problem for the governor and the Democrats is that if all 16 Republicans in the Assembly, who previously already set construction defect reform as one of their five must-have conditions, stick to the guns and INSIST on construction defect reform being part of the deal, neither the governor nor the Democrats will have the 2/3 super-majority vote in the Assembly they need to pass an extension of the sunsets.
Which means Assembly Republicans, not the governor or the Democrats, are actually in the catbird’s seat. That is, as long as they stick together and refuse to vote for any budget deal that doesn’t include construction defect reform.
Will Assembly Republicans, who have it completely in their power to get everything they asked for, have the stones and discipline to stick together in the face of enormous pressure and WIN a huge victory for a key base of GOP support and against a mortal enemy of Assembly Republicans?
I put the odds at considerably less than 50-50. But let’s hope Assembly Republicans “man up” and make me eat those words. I’d like nothing better. And I like a little ketchup with my crow, please.
2011 CLC & PRESIDENTIAL DEBATE!
This year’s Conservative Leadership Conference is one you do not want to miss. It will feature a GOP Presidential Debate along with top conservative/libertarian activists, donors, candidates and elected officials. CLC 2011 will take place this July 9th and 10th at the M Resort in Las Vegas.
Conference-only passes: Only $79 through July 1st ($99 after July 1st). VIP Passes include Conference, Awards Luncheon and Presidential Debate: Only $199.00 through July 1st($249.00 after July 1st). Sponsorship opportunities are also available. For more information contact Felecia Dorchuck at (702) 656-1577.
REPUBLICANS VOTING BADLY: ANOTHER IN A SERIES
AB508 would require moped riders to register their vehicles at the DMV (oh, joy!), pay a new Government Regulation Tax (license fee) and wear a government-approved safety helmet all under penalty of law. Yet another example of the nanny state running amok under Democrat leadership in the Legislature while Nevada continues to “enjoy” the nation’s highest unemployment and foreclosure rates.
And some people want these busy-body yahoos to meet EVERY YEAR?
Alas, as is all too often the case, we have some nanny-state Republicans who are only too happy to vote with Democrats to force adult citizens in the supposedly freest country in the universe to go what the government says is in our best interest. The GOP rogues gallery on AB508:
Ass. Mark Sherwood (big surprise)
Assemblyman Pete Goicoechea
Assemblyman Tom Grady
Assemblyman John Hambrick (Tax Pledge violation)
Assemblyman Scott Hammond
Assemblyman Cresent Hardy
Assemblyman Randy Kirner
Assemblyman Pete Livermore (Tax Pledge violation)
Assemblyman Lynn Stewart
Assemblywoman Melissa Woodbury.
Let’s also give a little credit where credit is due: Three Democrats voted against this mommy-knows-best bill:
Assemblywoman Debbie Smith
Assemblyman Harvey Mumford
Assemblywoman Maggie Carlton
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