CARSON CITY — Senate Majority Leader Bill Raggio joked recently that the Nevada Legislature has more critics per capita than any other statehouse in the nation. Could that be because the Nevada Legislature does more things worthy of criticizing per capita than any other statehouse in the nation?
Take the transportation compromise. Please.
After days upon days of negotiations with various players — industries that didn’t want to be taxed, a governor who refused to impose taxes — a compromise plan was finally approved on Thursday in a scripted hearing that had the distinct air of a fait accompli.
The result: Money enough to float a bond of about $1 billion.
The shortfall on the state’s list of transportation projects: $5 billion.
We don’t mean to sound ungrateful. Negotiators, especially Assembly Transportation Committee Chairman Kelvin Atkinson, worked very hard to get to that $1 billion. We’re looking forward to having more lanes on the freeways we drive all the time. Thank you, Mr. Atkinson, Legislature, governor and those about to be taxed.
But $1 billion out of $5 billion? That’s less than half of what Gov. Jim Gibbons‘ Screw-The-Las-Vegas-Convention-And-Visitors-Authority-Plan would have raised. At least he got us halfway there, with $2.5 billion, even if it would have destroyed the convention authority.
The compromise plan, then, is this:
• The Las Vegas Convention and Visitors Authority will sell bonds that it will repay with $20 million per year in room-tax money. This avoids a key objection of the authority to the governor’s original plan, the diversion of room tax money outside the authority’s budget to road projects. Under the compromise, the authority will issue the bonds itself and then give the money to the highway fund.
• Reallocating 3 cents of the 5 cents local governments charge per $1,000 $100 of assessed valuation in property tax for capital projects to building roads. This means, of course, that capital projects like parks will not be built.
• Reallocating half of the 4 percent surcharge that car rental companies charge customers to roads. Car rental companies, by the way, use that money to pay automobile registration fees.
And that’s it.
If you’re wondering at this point why there’s no increase in the gas tax, or at least an indexing of the tax to inflation, you’re not alone. If you’re wondering why there’s no increase in the diesel fuel tax, you’re not alone. If you’re wondering why there is no weight-distance tax, you’re not alone. If you’re wondering why taxicabs and limos pay nothing in this compromise, you’re not alone.
In fact, if you’re wondering why in the hell the people who use the roads most — drivers like you — aren’t paying a goddamn thing for the roads that we use every day, well, you’re not alone.
Welcome to Nevada, land of magic, where pixies build roads while we sleep and dream of sugar plums and unicorns. Why, we can have our cake and eat it, too, and it’s all calorie free!
Speaking of bullshit, let’s take a look at the hearing at which the compromise was approved. First up was Gibbons, who made it very clear from the outset that he simply could not stay and answer questions, because he had another engagement. (We’re sure, had the governor’s calendar been free, he could have gone on at length about the plan and all of its details without benefit of notes.)
“I said then and on many occasions that I hoped my plan would generate a dialogue, and that I welcomed additional ideas on how to meet our needs, as long as those ideas did not entail raising taxes on our citizens,” Gibbons said. “Our growth requires these projects and our growth should pay for them.”
(We’ll stop for a second so you can recover from the stunning contradiction in the above. “Growth,” of course, means new citizens. Citizens pay for growth in the form of taxes, in this case, perhaps a gas tax. But Gibbons specifically forbade taxes on citizens. Therefore, our growth — by gubernatorial policy — is not paying for growth. Instead, tourists, car renters and property owners [regardless of how much or little they use roads] are paying for growth. And this passage, we must add, was written, revised and uttered in the space of a single paragraph, with nobody’s head exploding. A miracle!)
“I want to extend my gratitude to the gaming industry leaders and the LVCVA for their leadership and for coming to and staying at the table,” said Gibbons. What did former Nixon aide Chuck Colson once say? When you’ve got them by the balls, their hearts and minds will follow?
“I am proud to have been a part of the solution to this crisis,” Gibbons summed. And the irony is this: Gibbons, whose stubborn refusal to allow taxes to be increased is at the very heart of the inadequacy and fecklessness of this compromise plan, will actually get credit for doing something to solve the transportation crisis. It was the governor’s decision to try to steal a lot of money from the convention authority that got local leaders and the gambling industry to the table, they’ll say. What leadership!
Actually, leadership would have been finding a way to fund the ENTIRE shortfall, rather than leaving more hard choices for another day. But we’re so used to low-fat, low-cal, processed, Pasteurized leadership substitute food product in Nevada, hardly anybody notices the difference anymore.
With Gibbons safely out of the room and away from reporters, LVCVA President and CEO Rossi Ralenkotter began testifying, and gave his reluctant endorsement, comments intended not for the committee but for future Legislatures, summed thus: Don’t think you can come back to this well again. It’s capped, at $20 milllion exactly. Ditto, said Nevada Resort Association President Bill Bible, who hinted that there were some among his membership who’d just as soon have told the state what to go do with itself. It was Bible, a former state budget director and policy wonk, who said what we were thinking: “The proposed solution before you doesn’t have many wheels other than the car rental tax.” Indeed, it doesn’t.
(We won’t spend time with LVCVA’s comments about how they had no problem contributing to the solution; in fact, the LVCVA’s opposition to the governor’s original plan was immediate, absolute and definitive. But that sort of political posturing is a variety of lie that’s so common in the legislative process, to lock up offenders would be to build a wall around Carson City.)
Never one to read a script, Las Vegas Mayor Oscar Goodman took the mike next, to object to the plan. But his objections had more to do with the fact that Gibbons had still not called him to get the mayor’s blessing for the plan, not the fact that the plan was inadequate and failed to establish a rational nexus between users and service.
Atkinson, to his credit and in accordance with legislative rules, shut the mayor down almost immediately. “I take exception that this was done improperly,” he said. Comments should be directed to the amendments, not the process whereby the bill was written. (Henderson Mayor Jim Gibson, the No. 2 man on the LVCVA’s board, was on hand to make some temperate comments.)
Clark County’s lobbyist Mike Alastuey noted something that few seem to realize when anti-taxers like Gibbons talk about “reallocating existing taxes,” i.e., that money has to come from somewhere, which means something else doesn’t get done. “These contributions are not easy, and they are not without consequences,” Alastuey said, noting that parks that otherwise would have been built now won’t. “We hope that the Legislature recognizes the significance and magnitude of this contribution.”
At hearing’s end, our notes reflect that two representatives of the Las Vegas Chamber of Commerce — Veronica Meter and Sam McMullen — spoke, and for quite a length of time. The details are sketchy, but there was something about an engine running at high RPMs, or something.
McMullen did say roads have been the No. 1 priority for the chamber. (We wonder if he might explain why the chamber endorsed as good for business a man who pledged not to raise taxes, when an increase in taxes is what everybody knows is needed to fix this problem. This realization is not ours, but rather Tim Cashman’s, who helped guide that chamber endorsement only later to stamp his feet and demand the governor show “leadership,” on the issue.)
Assemblyman Mark Manendo, perhaps alarmed that the chamber might be thinking its work was done, then asked McMullen a question, inexcusably extending the hearing. The specific words tossed to and fro are not recorded in our notes, but we did find earlier in the hearing a curious bar code-like inscription reading “SNAFU-FUBAR.”
The plan is slated to be approved by the Assembly this morning, then be sent to the Senate, where it’s expected to go to the transportation committee this afternoon. (An informal legal opinion says that, under another Gibbons-authored measure, a two-thirds vote will be required for passage because it increases state income.) Without shenanigans or amendments, it could be OK’d by the Senate shortly and sent to the governor for his signature. Problem solved, except for the huge transportation problem that’s still out there.
UPDATE: The Assembly just passed the transportation package, 40-2, with just Republicans Francis Allen and Garn Mabey (yes, the minority leader) voting no. Mabey said the bill would sap money from parks and other public works, while Allen said she hoped the Legislature could come back and talk about other solutions in the future. (Maybe even with her in it! A vote against traffic relief could be a powerful political cudgel.)
Majority Leader John Oceguera replied that parks are built with impact fees charged to homebuilders, and maintained with the property taxes that will be siphoned to pay for roads under this bill. And Assembly members Marilyn Kirkpatrick and Dr. Joe Hardy both said they’d rather spend time with their families rather than gridlock.
Atkinson admitted the bill wasn’t a perfect solution, but a first step to help relieve traffic problems. “We must do all we can to keep our traffic flowing,” he said.
The bill now goes to the Senate, for an afternoon hearing in the transportation committee.
CARSON CITY — Lt. Gov. Brian Krolicki finally struck back at auditors who found he violated state law in establishing his own state budget system quite apart from the one everybody else uses. And if this is the best defense he can muster, we’re thinking he’s in big trouble.
(The audit, released last week, found that Krolicki hadn’t followed state law with respect to the state’s College Savings Program. Instead of taking fees generated by investments and accounts and depositing them into the state treasury, he ordered contractors to hold the money and spend it at his direction. And what was that direction? To create TV and radio ads, not to mention fliers, featuring the smiling countenance of one Brian Krolicki, who just happened to be a statewide official thinking of running for higher office.)
Let’s deconstruct the Krolicki Defense, as presented in this morning’s Review-Journal:
“There were legal contracts for all the things we were doing. We created one of the finest programs in the country out of nothing,” Krolicki is quoted by the R-J as saying.
Let’s separate those two: First, the legal contracts were mysteriously missing when Krolicki’s successor, Treasurer Kate Marshall, took over. Second, auditors found that while the contracts were legal, Krolicki’s handling of the money generated thereunder was not. (This is a classic liar’s gambit: Make a true, but unresponsive, statement in the hopes nobody is listening too closely.)
Speaking of liar’s gambits, the second part of his quote is also telling, and also unoriginal: Yes, it was a fine program. Everybody agrees on that. The problem is, that doesn’t have a damn thing to do with Krolicki breaking the law. It wouldn’t matter if he was curing cancer and inventing an even-longer-lasting light bulb, if what he was doing was not legal. He shouldn’t be allowed to hide behind the program.
Krolicki claimed there were “conflicts” in state law that allow agencies to hold state funds outside the state’s system of accounting. Take the Public Employee’s Retirement System, for example: State funds are invested for a return for state workers who retire.
“It happens all the time. The Legislature cannot micromanage every contract,” he said.
This defense is so absurd, it’s surprising it was ever put to paper. First, there was no conflict in the state law governing this program. Auditors said the law clearly demanded that money due the state under the contracts be deposited into state accounts. (The investments made on behalf of children have been found unmolested by Krolicki’s scheme; it was only fees owing to the state that were mishandled.)
Second, the Legislature wasn’t micromanaging anything, it was managing its own money, which is not only proper, but legally required. And when Krolicki ordered the contractor companies not to pay the state what they owed, but to keep it and spend it as he directed, he set up a system specifically to thwart legislative oversight, and ended up spending state money well in excess of what the Legislature had authorized. Translated: He broke the law.
Finally, Krolicki says, if overpayments were made (they were) then Marshall should seek to get that money back. (In fact, that’s a fine idea.) Krolicki even said contractor UPromise may have mistakenly used state fees.
There was no mistake about it: Auditors uncovered e-mails in which Krolicki’s office directed UPromise to hold state funds, and then spend them as directed, by Krolicki. This was the flimsiest of Krolicki’s frauds, as e-mails with that contractor (uncovered by auditors) clearly show everybody knew they were talking about state funds.
The case has been referred to Attorney General Catherine Cortez Masto for review, and Krolicki says he’s been in touch, offering to provide information. If it’s as lame as the “information” he provided to the R-J, he most certainly will face some kind of sanction. But Krolicki seems to think that he’s got a certain political charm that can turn everyone to his side. (Hey, could that be why he cast himself in those ads?) It’s high time he realized that charm — much like all the rest of the claptrap he’s offered in his own defense — is no defense for criminal conduct.
• The capital improvements budget was approved Thursday, with $285 million going to prisons, but just $99 million going to the state’s universities and community colleges. (Another $90 million went to the nascent health sciences system, which is scattered around several campuses.)
Irony? Yes, we think so, too.
• Those green building tax breaks were amended once again, as state Sen. Randolph Townsend sought to allow projects that didn’t apply by the original deadlines in the Assembly bill to get their share of revenue, too. As a result, a small increase in raises for teachers may be eliminated.
But at least those teachers will be breathing cleaner air, right? And who can put a price on that?
Meanwhile, Matt Maddox, senior vice president for business development of the Wynn Las Vegas sent an e-mail to state senators objecting to the amendment, saying it will "…have a serious adverse impact on the Encore project for Wynn Resorts. Given we have been moving forward under the expectation that our project has some of the best facts, this new ‘deadline’ of Feb 2007 will exclude Wynn and cause us to lose millions of dollars and abandon many of the energy saving initiatives."
(Townsend’s amendment set a deadline of Feb. 1, 2007 to apply for tax breaks, well after the deadline included in the original bill.)
"The recent amendment inserts an arbitrary administrative achievement that would cause disqualification of a project that is nearer to actuality than many who [sic] would be included under this new standard," the e-mail says.
Now that Wynn has come out against it, it will be interesting to see if the state Senate dances for him, or revises the bill again to make sure that Wynn gets the tax breaks, too. We’re guessing the latter, but we’ll keep you informed.