Guinn's Final State Of The State A Lack-Luster Affair At Best

Barely Mentions Property Taxes, Presses For $300 Million Vehicle Registration Rebate

by Johnny Gunn

In what should be the glorious final days of his two-term stint as Governor of Nevada, Kenny Guinn's State of the State speech was a lack-luster event at best. His lack of appreciation of the public's reaction to massive property tax increases, coupled with budget proposals that apparently weren't bounced off legislative leader's heads first, has drawn less than enthusiastic response.

His budget for the next biennium calls for a 19 percent increase in spending, and for some, thankfully after the last session, no new taxes. Some legislators are calling the spending proposals out of line with population growth and inflation, both of which are well under five percent.

The massive tax increase from the last legislative session, coupled with a blazing hot economy has produced extra millions of dollars flowing into the state's coffers. Guinn talked about a $300 million DMV rebate for those who registered cars, pick ups, boats, and other vehicles last year, and formalized the idea in his State of the State message. Legislators on both sides of the aisle question the move, particularly since the governor all but abdicated any thought of leading the forces to control property taxes.

Another budget proposal that has come under fire since January 24 is a proposal to stop state worker's retirement plans from providing medical insurance, but only to new hires. State worker unions, teacher unions, and others don't seem to favor the approach at all.

He recommended state workers and teachers get a two- percent raise in each of the next two years, and he is proposing a $100 million dollar grant to schools that are failing the federal No Child Left Behind Act. Guinn says there are at least 122 of these schools statewide. Among the 50 states, Nevada is most often ranked at or near the bottom, and spending for education is also among the lowest of the states. A referendum to force the state to fund schools to the national average failed in the November election.

The budget totals $5.7 billion and indications are the legislature is not going to wait until the final moments of the session to discuss its merits. The regular session begins on February 7 and is scheduled to run for 120 days. In many of the last several regular sessions, the legislature has waited until the closing moments before tackling the meaty budget issues. Many in the state say this has led to very faulty legislation, that items in legislation are often unknown to legislators of both houses. Often legislators don't even know what they are voting for or against.

Amendments are slipped into major-issue legislation, those on the floor don't read the massive bills anyway, and the pressure is on to go sine die. At the last session, the governor had to call special sessions just to get the budget passed, and education money was among the last to be doled out. This led to a referendum led by Nevada Congressman Jim Gibbons (R) and his wife -- now retired Assemblywoman Dawn Gibbons (R-Washoe) -- called "education first." It calls for the legislature to pass education budget issues before any other budget item. The initiative passed in November and will be voted on again in 2006, before it can be passed by the legislature.

As far as the property tax issue is concerned, Guinn seemed to wash his hands of the entire situation, saying only he will leave any property tax measures up to the legislature. For some in the state, there is no more pressing issue than the astronomic property tax increases throughout the state.

Guinn is a registered Republican, but many in his own party question his fiscal thinking, and even Democrats who are in the minority in the Senate but who outnumber Republicans in the Assembly, can't seem to figure the man out. Democratic legislators have been putting together their own lists of things to get passed in this session. First and foremost is a way to control run-away property taxes. We can look for many proposals over the first few weeks of the session, as there isn't a consensus among the Dems.

The Governor says he is fearful of a taxpayer revolt, but he was talking about his proposal to refund some $300 million in vehicle registrations, not property taxes. Some legislators say that proposal isn't fair in that some rich dude with an expensive car and boat will get a full refund while a family with a run down beater and three kids will get $39.

The last legislature totally emptied the state's rainy day fund, and the governor is proposing slipping some $200 million back into it. That money can come in very handy when the state faces serious disasters such as the heavy blizzard snows in the north and the floods and washed out neighborhoods in the south. There isn't enough money in the disaster relief fund at this moment to cover any needs from the weather-related problems currently plaguing the state.

According to the Governor's budget, 33.2 percent of the revenue will come from sales and use taxes while 27.1 percent will come from gaming. The rest of the revenue comes from such things as business tax (8.3 percent), insurance premium tax (8.5 percent), live entertainment tax (4.8 percent), cigarette tax (4.1 percent), liquor tax (1.3 percent), and even Secretary of State fees (3.2 percent.)

The $5.7 billion outflow begins with education, 53.2 percent ,and human services 28.8 percent. Public safety gets 9.2 percent of the revenue while a group referred to as "other" will benefit from 8.8 percent of budgetary dollars.

For information on Gov. Guinn's proposed budget:

Letter of Transmittal to Nevada Legislature

Budget Table of Contents (with links to specific proposals)

•••