Tyrus W. Cobb: The train wreck cometh; ready or not | NevadaAppeal.com

Tyrus W. Cobb: The train wreck cometh; ready or not

Tyrus W. Cobb
For the Nevada Appeal

The Legislative session is due to end in just three weeks and there is no compromise in sight on the two-year budget or on redistricting. The latter may end up in the courts, and the delay will have only minor significance. However, the revenue and spending bill must be completed by July 1, the beginning of the new fiscal year, or … well, no one is sure just what will happen, but it won’t be pretty.

We understand that Gov. Sandoval has made it clear that he will not permit the Legislature to end on June 6, and then begin a series of “special sessions.” He has let it be known that if that body fails to pass a budget that he can agree to, he will call the Legislature back into session around June 27 with a very limited and specific mandate – presumably, pass the budget he has approved.

The leadership in the Assembly and the Senate is in Democratic hands, a solid 26-16 majority in the lower house, but a narrow 11-10 margin in the upper chamber. The Democrats have presented a unified tax and spending plan for the biennium that would – if passed – represent the largest tax increase in the state’s history and include at least two new, untried and very complex revenue sources – a Texas-style franchise tax and a levy on “services.”

There is virtual certainty that the Democrats can pass a budget that reflects this increased spending, around $1.6 billion more than the governor’s proposed plan. However, to pass the spending increases would require the leadership to secure a 2/3 majority in both houses, meaning that at least two Republicans in the Assembly and three Senators would have to come on board (and all Democrats supporting, which is not a foregone conclusion). That is a virtual impossibility.

The Legislature could have reached a compromise whereby the taxes slated to “sunset” July 1 could be extended for two years. If the Dems were willing to offer up some reforms on K-12 education, collective bargaining (280/288), and PERS/PEBS contributions, this coalition could be put together.

The problem is that the Democratic leadership has shown zero interest in even discussing real changes in these areas, despite many from the GOP practically begging them to offer up a bone or two on reforms. Apparently the party feels that it is too beholden to its traditional constituencies to even consider doing this.

On the Republican side, there is no Bill Raggio leading a group willing to consider at least the extension of the sunsetting taxes. Given the lack of flexibility from the other party, the Republicans have proclaimed their fealty to the governor’s “No New Taxes” stand.

The governor will give the Legislature a very narrow mandate when he calls them into that late-June session. If the deliberative body fails to pass his budget (anything else he would veto), then we enter unchartered territory. No one knows what will happen. Unlike the federal government, which has gone for decades by passing Continuing Resolutions to keep the government functioning in the absence of a budget, this cannot be easily done at the state level. Could the governor decree a fiscal emergency and run the state by fiat? Doubtful. Can the Legislature pass a series of CRs? Also doubtful.

We hear now that the Democratic leadership may simply decide that since it has zero chance of getting its own tax and spending plan through, it may simply pass the governor’s austerity budget and get ready for the 2012 election campaign. They will be banking on voters getting frustrated by the diminished services they have come to expect from the government, failing education systems, and less help for the poor and needy.

If so, who will win? Will the electorate’s strong preference for no new taxes continue in the face of these cutbacks and provide the governor the political support he needs? Or will the Democrats’ gambit prevail, one that bets that voter frustration over the impact of cuts will give them a clear mandate at the polls next year? Your guess is as good as mine.

• Tyrus W. Cobb is former special assistant to President Ronald Reagan.