It's the biennial craze that's sweeping Nevada: Let's Make Law 2005. As the Silver State Legislature convenes in Carson City on Monday for the constitutionally mandated process that's said to be second only to sausage-making in grisliness, Las Vegas Weekly tries to find a few choice cuts of meat amidst the gristle and bone.
There was plenty of chewing to be done after Gov. Kenny Guinn's January 24 State of the State speech, a.k.a. Christmas II. Enjoying a hefty revenue surplus, the result of unexpectedly good gaming and tourism numbers, Guinn "had something for everybody," according to Carole Vilardo, president of the Nevada Taxpayers' Association.
Even though Guinn's better-than-Sominex delivery and litany of spending increases may have lulled some viewers to sleep, everybody woke up when he broke out the coal and switches: Incoming state workers will, if Guinn's budget is enacted, have to forgo some retirement health benefits in the future. Guinn giveth, Guinn taketh away. This proposal has played to mixed reviews so far and is almost certain to be one of the gnarliest bones of contention facing the solons in Carson City.
To get a sense of what sort of argle-bargle might be brewing up north, the Weekly talked separately to Vilardo, State Sen. Bob Beers, Senate Minority Leader Dina Titus, UNLV economist Keith Schwer and policy analyst William Thompson, Review-Journal columnist Steve Sebelius and Alden Ries, a member of the Governor's Commission on Higher Standards in Education, and then compiled it here for your edification.
With most of the state's budget going to book larnin', it seems a logical starting point, especially with Millennium Scholarship funds running on empty. Guinn's proposal to borrow $100 million for the scholarships—days after tripling the ante on Beer's mooted $100 million rebate of auto-registration fees—struck some as a cognitive dissonance.
Thompson: The guy frustrates me. He wants to borrow money for a program that is popular, but there's been no assessment to see if it has been all that helpful; 40 percent of the people who have scholarships flunked our English entrance exam. And at the same time he wants to give a rebate on automobiles? That's stupid!
Beers: If our choices come down to going into debt for 20 years in order to prop [Millennium Scholarships] up for 10 years or making adjustments, I support making adjustments. We've seen the percentage of incoming college freshmen from Nevada high schools who take remedial classes grow from around 20 percent to about 35 percent. So it would appear that one of the impacts of the rather unbridled Millennium Scholarship requirements we have in place now is folks going to college who aren't ready.
Much as they might wish otherwise, legislators will also have to grapple with property tax rates. They're caught between rising valuations—especially in urban areas—and the likelihood of a Proposition 13-style revolt, spearheaded by Rep. Sharron Angle. Proposed fixes include curbing the rate at which valuations can escalate (say, at 6 percent), freezing them at their current level and deferring the whole matter until after the 2006 election, or some combination/variation thereof.
Sebelius: That's clearly going to be a contentious issue. You've got Dina Titus, who's proposed this freeze that would give people a little breathing room, that the governor apparently hasn't taken kindly to.
Titus: He was quoted as saying he didn't want a freeze, and then he called me from Dallas to say that's not exactly what he meant. He thinks it's a hard freeze. But a freeze would freeze existing property. Any new houses, new businesses that are built—all that growth money would be outside the freeze. That's enough for local governments and school districts.
Beers: Property tax is not going to be divisive at all. The normal opponents to a property tax-cap are, for the most part, running for governor. I favor granting a property tax-valuation freeze to owners of homesteaded properties who are over 65. On the home being sold or the surviving spouse [dying], the property values step back up.
Titus: You can't do that. That's unconstitutional. Everybody has to be treated the same. I don't think the Legislature can come up with a solution by March. I don't favor a freeze as a permanent solution. It gives us time to work out something fair, instead of just running up there and doing something real quick because we have to.
Vilardo: Conceptually, the 6 percent looks like a viable proposal. We don't have a specific one that we're hanging our hat on at this point. When you deal with taxes, the devil is in the details.
Schwer: It looks as if the market is correcting itself. The signal's out there: You can't create these homes at the rate you have been, because that's faster than the demand. As those prices are going up, that's going to limit the ability of some people to be able to buy. So you've got all those adjustments ongoing.
Vilardo: The bulk of the population in Clark County is feeling [property tax increases] and the bulk of the legislators come from Clark County. So the votes would be there to do something—if there's agreement on what to do.
One "something" that is out there is Titus' proposal for a state lottery, to finance ongoing education expenditures like textbooks. Aside from the predictable opposition of the casino industry and those who view lotteries as a regressive means of taxation, opinions have been heterodox and unpredictable.
Thompson: Did the governor mention "lottery" at all? It's incredibly stupid unless we do what North Dakota does. North Dakota has one lottery game only: Powerball. That's the only game Nevada citizens want. They do not drive to Whiskey Pete's to buy instant tickets. They go down there to buy the Super Lotto tickets. Lotto is a casino. It's like keno, roulette or a slot machine. We could sell the tickets in the casino, the casino could get the 7 percent commission, we wouldn't have to change the state constitution, and we wouldn't have to wait five years to vote on it. We could probably start it a month after the Legislature passes the thing.
Beers: Lotteries make sense when you can use them to capture the income of the residents of your neighboring states. Therefore, it would not do that there, because our neighboring states all have lotteries.
Ries: The majority of our gambling proceeds come from tourism, not from locals. I'm not going to get in a car, drive out on the Strip and play blackjack. But I'd buy a lottery ticket. To me, it's two different equations, and it appeals to two different groups of individuals, but a lottery would be phenomenal for education.
Sebelius: I have disagreed with my colleague and friend Jon Ralston about this. He has said that it is a tax on the poor. Now, he has moral standing; he can get away with saying that. I don't think the gaming industry—which has really opposed it in the past—can complain about the tax on the poor without indicting themselves as well. As far as how effective a solution it would be, [after] California adopted their lottery, it wasn't that effective in terms of funding education, especially at first.
Another hot potato for legislators to juggle is Guinn's proposal to terminate the custom of providing post-retirement health coverage to state employees, starting with new hires. A Carson City scribe says that State Senate Majority Leader Bill Raggio "seems to think it's a good idea. Most of the other ones say it leaves people out in the cold after they retire from the state."
Lawmakers will have to weigh saving $16.7 million per year in benefit costs against looking like Scrooge McDuck. As Thompson likes to joke, Nevada may be the only state in the union where state-level officials aspire to hold county-level jobs, because the pay and benefits are so much better at the lower level.
Beers: The pros are that, in the future, our government will be able to do more with our tax revenue for the citizens. I can't think of any cons. It's optional right now, anyway, and it's also secondary coverage to Medicare, which is your retirement health plan—and mine.
Titus: It's just like privatizing Social Security. You create a big hole, leave it up to private investments and if people don't make that investment, then you have to take care of them somehow. We're supposed to be looking at making insurance available to more people, because Nevada is at the top of the list in terms of the percentage of people that we have uninsured. So instead of moving towards bringing down the cost of health care, it's just creating a whole new group without any.
Vilardo: [Guinn] was absolutely right. It has become very costly. Will we see that repealed? At this point in time, I would not think so. But will we see a change? Could it be a set stipend that's given as an offset? That's going to be part of the dialogue.
Sebelius: There's a [schizoid] quality to it that you can't escape. [Guinn] says "We need to get rid of these lifetime health payments for retired state workers because it's costing too much." It's a very Republican idea. On the other hand, he moves immediately to say, "Oh, and by the way, we need to get some land from the federal government and put it in trust to the state. Then we can build low-income housing." That's a very Democratic idea.
Thompson: That one came out of the blue. We're going to buy federal land and then give free land to people building houses because they'll be first homebuyers? Let the market take care of itself.
Sebelius: It's hard to pin down and react to the speech because it was all over the map. The longer I cover the guy, the less I can predict what he's going to do, outside of the obvious.
Thompson: Of course it costs the state more, but the state is really chintzy with salaries. If state workers get that little extra benefit, so be it. By getting the little extra, maybe the state has an excuse for giving them low pay. If they take the benefit away you're going to have two classes of workers. I would say: Leave ... it ... alone.
One item that receives lip service in almost every legislative session but is forever left out in the cold by the state is the funding of problem-gambling treatment. Four years ago, a proposal to spend a quarter of a million dollars was introduced without serious opposition, then was whittled down to $75,000, then expired without being enacted.
This, among other failures of political nerve, led Thompson—in a 2001 Nevada Public Radio commentary—to brand the lawmakers the "Just Say 'No' Legislature." This year, Guinn has put forward a proposal for $200,000 in state funds for pathological gamblers, to be matched by private industry. The odds of its passage still appear mighty long.
Titus: I believe that will get funded. Some people think it should be more. Some people think gaming should match that. That'll be where the debate is.
Sebelius: I wouldn't be too optimistic. That has never been a priority, and it's one of those elephant-in-the-room things that no one talks about. Studies show—not surprisingly—that the big percentage of problem gamblers live in Las Vegas, of course. That's where they would go. But the fact is that Nevada has never taken their treatment seriously. We have sort of shunted that issue aside and ignored it, and I don't anticipate that changing.
Thompson: The cheapest answer would be tell the casino that we're going to look at your player-card records, and if you are giving favors to people that are on gambling binges (and we can tell this by looking at the record), then we're going to fine you. In other words, we're telling the casino, "You know who the people are; throw them out." That wouldn't cost the state much at all.
William Flangas, of the state's Ethics Commission, has urged the state to tighten up its ethics laws, an issue that may have additional currency in the wake of the failed Kathy Augustine impeachment. But will his recommendation be enough?
Titus: I totally support [Flangas]. In fact, I've got a couple of ethics bills myself. One of them requires public employees to take a leave of absence without pay, just as I have always done. The other one defines political activity and makes it clear that nobody in office can use their staff or state equipment to be engaged in political activity.
Beers: It seems to me that the combination of you and your colleagues and the FBI remain a far more effective ethics commission than what we've created.
One question that divides observers fairly evenly is whether Guinn does enough—or anything, even—to push his legislative package once he's introduced. Even those accustomed to covering the capitol beat have their differences. Sebelius recalls putting the question to Guinn and getting the governor's version of the old song, "I'm a Bill on Capitol Hill." But a veteran legislative correspondent says, "He's in the hallways fairly often, more so than some other prior governors. Look at the last session on the taxes: He couldn't get anything passed, so he went to the Supreme Court." Considering all the grief Guinn caught for bringing the Supremes in to cut the legislative Gordian Knot, we probably won't see him doing that again.
Titus: Last session, he was criticized for throwing out the tax package and not trying to get public support for it. I don't know what his plans are, but since he wants to leave a legacy, I expect he'll be fully engaged.
Beers: I would counsel his critics—which are actually very few in this area, but with big pulpits—to walk a mile in his shoes.
Ries: Kenny Guinn is a great supporter of education. It took a while to get there. You can't just take over a governorship and, all of a sudden, make that the end-all/be-all just because you believe in it. At least education is getting some attention in the state in terms of needs. We haven't had enough attention [there] and, unfortunately, many of the individuals making the decisions as to the fate of education are people who have never been in schools. They think they know education because they went to school. That'd be like me thinking I could perform surgery because I went to the doctor once.
Sebelius: Kenny is like a buoy at sea that's lost its moorings. It just rises and falls with the tides and the waves. If you think something is a priority, you should fight for it. The greatest example of this is the gross-receipts package that he proposed in 2003 [and] immediately was met with all the enthusiasm of a rack of ribs at a Passover seder. He would have lawmakers over to his office and explain the need and the plan. But he boasted later that he never asked a lawmaker for their vote. Lobbying is part of the legislative process and I don't think he realizes that.
Thompson: That's a little bizarre. If he wants any of his little pet projects, he's going to have to be talking to legislators, wining and dining them. If he does enough of that, maybe he can get some things through, but I don't think he's the leader of his own party. In most states, the governor is the legislative leader and certainly that's the case in the national government. George Bush is the legislative leader, nationally. Kenny Guinn is saying it's not one of his roles.
Regardless of whether Guinn puts his shoulder to the wheel, what's the morning line on the 2005 Lege? Will it finish early, just barely on time or go into extra innings (again)? And why do they always leave the really important stuff until the end, resulting in a mad scramble before adjournment?
Beers: The legislative process is this vast cauldron of bubbling ideas and, toward the end of the four months, we'll start scooping the solid pieces out, drying 'em off and putting them into law.
Sebelius: It's easy to crank out a vote on a new license plate or a commemorative day for somebody or other, the kind of things they do in the beginning. It's a lot harder to craft solutions to some of these vexing problems.
Thompson: They'll certainly use up the 120 and then how many special sessions? I'd say the bet's maybe one week extra. Two weeks, it gets to be a pain in the ass. Everybody gets tired of it. So I'd say 127 days.
Vilardo: They'll do their damndest not to have any special session this year, but may leave some issues on the table. I haven't checked yesterday's list, but as of last Monday [January 24] there were 1,032 bills. We go into session [and] by the middle we usually have some 2,000 bills that have been requested.
Titus: I'd say 120 days. It's not in anybody's political interest to go longer.
Sebelius: It will go to the last hour of the last day, but there will not be a special session. Since 2000, there have been more special sessions than regular sessions. For people like Dina Titus and Richard Perkins, another special session would be disastrous. That's not something you want to use as a springboard to run for governor.
Beers: It will end on time. I wouldn't even take your bet on that one.
So there you have it. And that's without even getting into motor-vehicle rebates, mental health, reopening the can of worms that was the 2003 tax package, means-testing for Millennium Scholarships, or sorting out the per-pupil funding disparity between the universities and community colleges, among other nettlesome policy questions. Not to mention jockeying for position in the '06 statewide races. Just for starters. Let the games begin.