Sandoval pushes compromise, needs Republican support to close deal on spending plan
CARSON CITY — Gov. Brian Sandoval worked Tuesday to sell rebellious Republicans on a two-year budget compromise with revenue from taxes that until last week the governor and GOP lawmakers had refused to even consider.
Sandoval, a Republican, needs GOP support in the Legislature to close a deal on a $6.5 billion to $6.8 billion general fund spending plan Democrats appear poised to approve.
The emerging deal includes education reform Democrats approved over objections from the state teachers union and the extension of taxes Republicans had promised would die on their scheduled July 1 execution date.
To seal the agreement, however, Sandoval needs to convince Republicans they’ve dragged enough reforms out of Democrats to make it worth delaying the expiration, or sunset, date on at least a portion of an estimated $643 million in existing taxes.
After morning meetings with Republicans from the Senate and Assembly, Sandoval credited the legislators for being leaders with their calls for reforms to laws covering education, collective bargaining, construction defect liability and public employee benefits.
But he added that as governor, his decision will rule the day.
“I obviously have the final say,” Sandoval said, adding, “I am relevant.”
Top lawmakers took a break from negotiations Tuesday night as Assembly Minority Leader Pete Goicoechea, R-Eureka, was absent because of his mother’s funeral.
A deal could come together quickly when Goicoechea returns today.
In his absence, legislative Republicans were determined to show Sandoval they’re relevant, too, although many were expected to support him in the end.
“It is almost as if (Sandoval) made an agreement before negotiating,” said one Republican lobbyist who didn’t want to be quoted by name criticizing the governor. “It takes away bargaining power.”
Behind the scenes, some Republicans in the Senate argued that a Nevada Supreme Court ruling didn’t open a potential $657 million hole in the governor’s budget as his office had suggested last week. Instead, several Republicans said legal advice they had seen from the Legislative Counsel Bureau suggested the impact might be about $350 million instead. GOP lawmakers pressed the governor on the issue.
Republicans also were pushing Sandoval to negotiate reforms in the prevailing wage law and in the construction defect law, which the Assembly Republicans said gives lawyers a windfall and hurts the construction industry. Those two issues didn’t gain traction during the day, and Sandoval would have a tough time getting Democrats to agree.
Also in the mix is a proposal to increase the payroll tax rate for mining companies, although it is unclear whether the idea will make its way into the final deal.
The late deal-making frenzy was prompted largely by Sandoval’s decision to consider delaying the demise of the sunset taxes.
It was a shift from a stance he had held for many months that allowing the taxes to continue could hurt the economy and break a promise made by the Legislature in 2009 when it approved the taxes on payroll, sales, business licenses and car registrations on the condition they revert to pre-increase levels July 1, 2011.
Republicans in the Legislature were behind the no-tax pledge, and there didn’t appear to be any willing to defect to provide Democrats the two Assembly and three Senate votes they needed to get the two-thirds bloc required to break the tax stonewall.
But the state Supreme Court ruling Thursday that a 2010 decision by the Legislature to take $62 million from the Clean Water Coalition in Clark County was unconstitutional changed the landscape dramatically.
Sandoval decided the ruling, which came on day 109 of the 120-day legislative session, put as much as $657 million in his budget at risk.
At that point, Sandoval said he would negotiate with Democrats on the sunset taxes.
On Tuesday, Sandoval disputed the notion he is breaking a promise by backtracking on the sunset stance.
“I think that is an oversimplification,” Sandoval said, adding, “The Supreme Court decision has completely changed the dynamic.”
Some Senate Republicans, speaking privately, said they were unhappy Sandoval threw the sunset taxes on the table so quickly after the court decision.
Republicans who think Sandoval has interpreted the high court decision too broadly said cities and counties might not want to legally challenge the state because other issues might be more important and because such fund grabs probably will stop in the future.
Other Republicans continued to press for a tougher deal, insisting that greater reforms be part of the final outcome.
“We’re talking about everything,” Sen. Barbara Cegavske, R-Las Vegas, said after a GOP Senate caucus meeting with Sandoval on Tuesday morning, ticking off prevailing wage, construction defect and the high court ruling as areas of discussion. “I think we’re making progress.”
But those issues didn’t seem to gain support during the day.
Asked about putting more reforms on the table, Assembly Speaker John Oceguera, D-Las Vegas said, “I can’t see that happening.”
Despite the hurdles, Sandoval appears to have the political will to close a deal.
One Republican lobbyist said, “It blew my mind” that Sandoval backtracked so quickly on sunset taxes.
But, the lobbyist added, the newly elected governor’s popularity lies with his personal charisma, and he probably will soothe Republican anger.
“He is just a nice guy,” the lobbyist said. “It is amazing how far that gets you in politics.”
Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861. Contact Laura Myers at lmyers@reviewjournal.com or 702-387-2919.