New laws will shape Sandoval’s legacy
Flipping the calendar from June to July ushers in a new era in state government and essentially launches the administration of Gov. Brian Sandoval, a first-term, no-new-tax Republican whose administration will be judged by the success or failure of reforms that took effect at the start of the new fiscal year.
Of the 229 new laws effective July 1, the bulk are policy bills – some pushed by Sandoval and Republicans, some by Democrats – to implement smaller government and Sandoval’s call for shared sacrifice as Nevada continues to claw out of the economic pit left by the Great Recession.
Regardless of who sponsored specific bills, all will bear the fingerprints of the new governor.
“July 1 starts the clock … when individual Nevadans will start seeing the effects of the Sandoval administration’s response to the current economic crisis,” said Eric Herzik, a political scientist at the University of Nevada, Reno.
Because of the timing from November elections to the start of the legislative session in early February, a new governor generally builds his first budget from a blueprint laid out by his predecessor.
Sandoval was different, essentially proposing a budget from scratch.
“This is probably a rare situation where there was more of a Sandoval stamp on this first budget than most” new governors, said Fred Lokken, a professor at Truckee Meadows Community College. “It usually takes the second session to leave their mark.”
If Nevada’s economy improves, “he will be able to take credit” for turning the state around, Lokken said. “If Nevada does not improve, he will be blamed and shoulder the consequences.”
For college students, the effects will be felt in the fall when they will face a 13 percent increase in tuition.
State workers will see smaller paychecks and reduced benefits, while Nevada counties will be on the hook to pick up more of the cost of services for the poor, juveniles and public safety.
Those cost shifts to counties, however, cannot be implemented until agreements with counties are hammered out, a process officials concede could take months.
And while the governor called for extending public salary cuts to teachers and making them pay a portion of their salaries toward retirement – a cost until now borne by taxpayers through collective bargaining agreements – it’s unknown how it will play out in reality, as school districts negotiate new teacher contracts.
Per-pupil funding turned out about $400 better than early budget proposals, but with the state cutting about $130 million of general fund support between the past two years and the next two years, districts must negotiate for the lower teacher pay levels as the Legislature recommends, or impose layoffs.
School reform measures pushed by Democrats also took effect July 1. One requires teachers who receive negative evaluations to be placed back on probation; and another prohibits using seniority as the sole consideration when a school district goes through layoffs.
An overall $6.2 billion, two-year general fund budget approved by the Legislature and signed by Sandoval came together in the waning days of the legislative session after a Nevada Supreme Court ruling punched a potential $656 million hole in the governor’s original spending plan.
As part of a compromise, Sandoval agreed to extend for another two years $620 million in temporary taxes that would have otherwise expired June 30, but the deal with Democrats included a tax break for small businesses making less than $250,000 a year.
Besides tax and spending bills, a bipartisan effort to restructure Nevada’s economic development efforts and spur jobs in a state that leads the nation in unemployment also takes effect. AB449 is an attempt to streamline Nevada’s fragmented economic development agencies and consolidate operations under the governor’s cabinet. It also seeks to boost investment in research and development.
Democrats made a late-session push to revamp the state’s tax structure by imposing a new business tax and extending sales tax levies to services, but those efforts were abandoned when they failed to sway any Republicans to their $1.2 billion proposal and despite urgings by some of Nevada’s largest industries that tax reform was desperately needed to stabilize the state’s economy.
David Damore, a political science professor at the University of Nevada, Las Vegas, said lawmakers and the governor missed the opportunity to change a tax structure heavily reliant on sales and casino taxes – sources prone to economic volatility.
“At some point you’d hope the state would grow up,” Damore said, adding that unless Sandoval takes up the cause and can rally Republican support, “Democrats are just going to be talking in a vacuum” and tax reform will remain an elusive crusade.