Feature Stories - January 2001

Legislative Outlook 2001:

Can Nevada Lawmakers Just Get Along?

by Pat Hickey

It remains to be seen if America’s recent descent into the muck and mire of presidential politics will result in more or less partisan rancor at the state level. The fact that George W. Bush and Al Gore ended their race in a virulent dead heat for the political soul of the country doesn’t bode well for those hoping Democrats and Republicans composing the Nevada Legislature will come to Carson City this month seeking congenial consensus.

Geography, however, may play a greater role in the Silver State than dimpled chads and lawyers did in Florida. Especially when it comes to the once-in-a decade matter of reapportionment and redistricting the state’s political boundaries, regional interests could easily trump ideology in the electoral turf battles that lie ahead.

A multitude of other critical issues await Nevada lawmakers on February 5. Electric utility deregulation, taxing the Internet, homeowners association reform, the teacher’s union tax initiative, state employee pay raises and the governor’s promised plan for a tax overhaul, are just a few of the matters Nevada’s citizen legislators must tackle in the span of 120 days in 2001.

To Deregulate or Not to Deregulate?

Both energy leaders and consumer advocates gave Kenny Guinn high marks for putting off deregulation of electric utilities in Nevada. And most lawmakers agree with the governor that economic diversification is impossible without the affordable energy sources necessary to fuel economic development. Look for the governor and the Legislature to take a cue from the near "politics of panic" that took place in California when too little electrical supply was available to meet the state’s burgeoning demand.

Guinn and lawmakers in Nevada believe they have a brief window of opportunity in which to speed up the review of power plant applications and erect new transmission lines, while at the same time fine-tuning a fair deregulation settlement.

State Sen. Ann O’Connell believes Nevada will continue to be held hostage to increasing power costs, "until we generate more local power sources," she said. Expect both gamers and miners to be pushing for legislation that hastens new energy sources from within the state. With former House Speaker Joe Dini slated to head the Assembly Commerce Committee, expect him and Randolph Townsend on the Senate side to get the job done on behalf of Guinn and business leaders in the state.

Increased energy demands are due, in part, to the proliferation of computers, printers, fax machines and connections to the Internet. Such high-tech electrical paraphernalia is estimated to account for 13 percent of all current electricity usage. By 2020, it is expected to reach 25 percent of the total.

Ironically, while the Internet generates billions in business profits, it does little to pay for the electrical infrastructure that transmits its success. Nevada lawmakers are hoping to change that.

Taxing the Internet

Chairman of the Assembly Taxation Committee, David Goldwater, plans to introduce legislation he hopes will add a virtual toll road down the Information Highway to eventually help Nevada collect legitimate sales taxes generated by those in the e-commerce business.

Nevada Taxpayers Association President Carole Vilardo believes Nevada has a compelling interest in finding equitable ways to put e-commerce companies with a physical presence in the state, "on an equal footing with main street retailers who pay their fair share."

Goldwater acknowledges that collectible tax revenues are still a few years away down the information superhighway, but believes Nevada must begin addressing several critical issues — such as "sourcing, tax rates, exemption administration and how technology will be incorporated into the new sales tax system."

The Teacher’s Tax

While Internet toll booths are still somewhere down the road, the Nevada State Education Association’s (NEA) initiative for a 4 percent business income tax came rolling into Carson City this summer like a Teamster’s truck loaded with legislative nitroglycerin.

Business interests have mounted a court challenge, but should the tax initiative arrive at the Assembly undeterred by the courts, Minority Leader Lynn Hettrick stands ready to do everything in his power to "kill it." Hettrick predicts a bill will probably get through whatever Democrat-controlled committee(s) it’s assigned to, but believes it will die a contentious death on the floor of the Assembly.

Should it pass, it will face an even tougher row to hoe in the Raggio-dominated, Republican Senate. And Guinn has vowed to "not stand idly by and watch it pass." Hettrick believes reluctant Democrats are between a rock and the hardball teacher’s union that gives many of them the lion’s share of their campaign money.

Should the Legislature reject the referendum this session, business opponents say they are confident they can win the public relations battle in any statewide campaign at the ballot box in 2002. The Nevada Resort Association’s friend-of-the-court filing in the case indicates that business opponents may have not only the PR high ground, but also the high-dollar bucks behind them to stand up to the NEA’s coffers if necessary.

State Pay Raises

Governor Guinn recently released a Department of Personnel salary survey, saying results confirm his view that Nevada state employees are due for significant pay raises. Guinn’s study shows state employees trail both public and private workers in Nevada by more than 26 percent in salaries. They also receive 43 percent less in benefits than local government workers surveyed. State of Nevada Employees Association boss, Bob Gagnier, is publicly thanking Guinn for anticipated pay raises, which means the union won’t be pushing legislation for pay raises like they have in the past.

Homeowners Associations

Only in Tallahassee have more lawyers gathered than in Las Vegas courtrooms as of late, to do battle over the authenticity of certain political jurisdictions. In one of the session’s potentially most volatile issues, homeowners associations have become in the words of one lawmaker, "something that looked like a dream on paper, that has turned into a nightmare for us in the Legislature." Sen. Mike Schneider is calling his proposed reforms a "way of reinventing government." Schneider refers to the fact that these mostly non-profit organizations behave like mini-governments unto themselves. Some have argued they operate with the same philosophical underpinnings as Baghdad.

Schneider is planning legislation that will deal with capping fines imposed by associations. The Las Vegas Democrat says he is contemplating legislation to create a Homeowners Commission akin to the Real Estate Commission for provide an avenue for citizens to seek redress.

Irene Porter, Southern Nevada Home Builders Association lobbyist, says builders will be submitting legislation to create "landscaping-specific maintenance associations" that would limit association jurisdiction over individual owners. Porter also predicts a novel twist to impact fee law —allowing for parks, police and infrastructure to be included in fees paid by developers and then passed along to consumers.

A Fundamental Review

In his first State of the State Address in 1999, Kenny Guinn promised a "fundamental review " of Nevada’s tax structure. The timetable for release pushed forward, while the committee appointed by the governor methodically worked on his fiscal prescription for what ails the state.

Republican legislative sources acknowledge the governor is proceeding cautiously (or slowly) because he doesn’t want to raise the specter of the "T" word this session. They say he may wait until reapportionment has taken place, and deal with any "new tax plans" if he returns for the 2003 Session.

Beneath everyone’s radar screen in Carson City is the simmering issue of the state’s strained budget and what to do about it. Given Nevada’s explosive growth rate, most lawmakers know they will eventually have to do either of the two things they hate most: cut spending or increase taxes.

The governor has even begun speaking about certain state services being turned over to select counties. Clark County is an obvious choice, given that some, especially in the rural portions of the state, suggest it’s awash with revenues. The cow counties certainly aren’t flush with excess funds, and "home rule" has traditionally been an ace in the hole for Northern legislative leaders like Dini and Raggio to use in reining in the power of the metropolitan south.

Reapportionment

Ten years ago, the U.S Census came and went. Nevada kept its number of state legislators at 63, and its two congressional seats remained the same. Washoe and the rural counties each lost one senator and one assemblyman. The south gained just one seat in the Senate and two in the Assembly.

This time around, Nevada is expected to jump from the 1990 population total of 1,201,833, to exceed the 2 million mark. Clark County now contains almost 62 percent of the state’s residents. And just as money follows power in politics, expect political power to follow the change in population demographics.

Democrats and Republicans share power between the two houses of the Legislature, so like it or not, partisanship will have to play a backseat to consensus, when it comes to the political trade-offs both sides will be forced to make. The real fight will be more geographical in nature. With the growth in Clark County, seats will have to be added to the Legislature. Otherwise, rural and northern Nevada face losing some representation. If no seats are added, Washoe County and the rural areas could lose two Senate seats and four Assembly spots. Either way, Clark County gains in clout.

The south also gains in political juice with the ascension of Richard Perkins to the speakership of the Assembly. Perkins was the most loyal of lieutenants to Joe Dini, longtime champion of rural Nevada. And Dini is expected to have access to the ear of his Henderson successor. Most expect the speaker emeritus from Yerington to exert his mentoring skills mostly around the time of redistricting. And of course, Bill Raggio from Reno will surely find a way to make his advice readily available.

Nevada, as many lawmakers from Las Vegas are quick to point out, has now become primarily a metropolitan state. Republican Minority Leader Hettrick acknowledges that Las Vegas will get roughly 70 percent of all Assembly seats, but points out Democrats may be reluctant to keep seat numbers the same, for fear of consolidating too many Democratic districts, including the two minority seats of Morse Arberry and Wendell Williams. The other big question is the new congressional seat being awarded to Nevada. Plans and scenarios abound, but most insiders expect the new 3rd District seat will be around Las Vegas, with Democrats and Republicans fighting mightily in 2002 to add it to their column.

One big question is whether lawmakers can accomplish reapportionment in the new 120-day period or whether a special session will be necessary. Everyone is now saying they can, but come May, it may be another story.