LOS ANGELES — Nevada Gov. Brian Sandoval on Tuesday proposed extending into the next budget a package of taxes now set to expire in June 2012, to avoid further cuts to education.
The Republican governor’s decision to work toward extending the temporary taxes represents a significant policy shift, but Democrats, who want to retain control of the Legislature in November’s election, are wary of the proposed “flat budget” Sandoval promised for the 2013-15 biennium along with the tax extension.
Sandoval’s budget director, Jeff Mohlenkamp, is slated to meet with cabinet officials Wednesday to outline the governor’s priorities for his spending plan.
In Nevada, the governor proposes a spending plan a year before the two-year budget expires, which in this case will be June 2013 — and then a full budget, including revenue projections in January 2013 .
Dale Erquiaga, a senior advisor to the governor, said Sandoval made the announcement before Mohlenkamp’s scheduled meetings because state department heads needed to know how much money they have to work with in creating a spending plan.
“Since the governor is proposing a flat budget, they know if they make increases in one area, they will have to follow that with budget decreases in another area,” Erquiaga said.
Sandoval was elected in 2010 on promises that he would not raise taxes
The governor faced criticism from some fellow Republicans when he agreed to extend the same set of $620 million in temporary taxes late in the 2011 legislative session.
The taxes were originally due to expire then, but the Nevada Supreme Court forced Sandoval’s hand when it raised questions about the legality of taking tax dollars from local governments to fund state government, which Sandoval had proposed in his original budget.
The Legislature passed a $6.2 billion spending plan for the 2011-13 biennium.
At least one Republican supported Sandoval’s proposal to extend the temporary taxes, a package that included an increase on business taxes and sales taxes. It also extends exclusion of 115,000 small businesses with annual payrolls of less than $250,000.
“I think it makes sense, from his perspective, to offer stability for K-12 education as he prepares his budget,” said Sen. Ben Kieckhefer, R-Reno. “The alternative is to prepare for a $700 million cut, because between the sunset taxes and Medicaid roll-up costs, that amount would have to be taken out of somewhere else.”
Education represents 55% of the state’s budget, so cuts there may have been necessary to make up for increased costs in Medicaid.
Sen. Moises “Mo” Denis, D-Las Vegas, characterized Sandoval’s support for education by extending the temporary taxes as not going far enough.
“We have cut education now for the last several years,” Denis said. “If we want to make education the best it can be, we need to look for ways to increase education spending.”
Denis added that legislators need to look for long-term solutions.
According to Assemblywoman Debbie Smith, D-Sparks, “We are not generating the kind of revenue that would allow for sizeable cuts to our budget.”
Smith also said state officials need to be mindful of where they stand.
“We have already cut the budget four times, so a flat budget for education is a budget that has been cut four times,” she said.
The governor is likely to take a hard line on any other tax increases — even those aimed at restoring education, according to Erquiaga.
“Don’t confuse a commitment to education with education spending,” Erquiaga said. “We have seen student gains at the K-12 level without additional spending.”
