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Attention Taxpayer: Get Ready for Royal Screw Job!

Pop quiz: What was Gov. Brian Sandoval’s proposed general fund budget in January 2011?

If you answered $5.8 billion, you are correct.

In fact, if you type “Gov. Sandoval $5.8 billion budget” into Google, you will find (at the time I checked this morning) 9,710 entries reporting on the governor’s $5.8 billion budget. That’s a key to this column. Keep it in mind; I’ll get back to it later.

Fast-forward to last week’s Supreme Court ruling ordering Gov. Sandoval to remove $62 million worth of funding – which was “raided” from the Clean Water Coalition – from his revised general fund budget of $6.1 billion dollars – which was increased by roughly $300 million in early May thanks to rosier revenue projections from the Economic Forum.

So the simple fact is this: All the governor HAS to do, because all the Supreme Court has thus far ORDERED him to do, is subtract $62 million from his $6.1 billion revised general fund budget, and the new general fund budget would still be over $6 billion….which will still be about a quarter-million dollars over and above the governor’s proposed general fund budget of $5.8 billion in January.

And no need whatsoever to extend the sunsets.

Let me also remind you that in January, and for the better part of four months since introducing his $5.8 billion general fund budget, the governor has said he will not increase taxes, will not approve extending any of the 2009 tax hikes which are scheduled to “sunset” at the end of this month, and will not negotiate tax hikes or sunset extensions for reforms.

Now here’s the problem….

While the Court has only ordered the governor to give back $62 million, some in the administration, including the governor himself, fear that future court decisions *might* order him to subtract other funds from him budget which are vaguely similar, but anything but identical, to the $62 million CWC fund.

Make no mistake, there’s no guarantee any of the local subdivisions will even bring additional lawsuits, let alone win them. I mean, if the locals really want to play hardball and sue to keep their little pots of gold from the state government…fine. The state government can then simply say, “OK, you want to keep that $200 million; here’s $200 million of government services we’re not going to pay for any longer. You pay for them.”

Do the local governments really want to play this game of budget chicken with the state?

And again, using surplus reserve funds for school construction which are over and above what was promised for school construction is not the same as using dedicated funds earmarked for a wastewater treatment project that was never built. So there’s simply no reason in the world for the governor to concede preemptively that the courts would rule against him in additional lawsuits if brought.

But let’s say lawsuits are filed; and let’s say nine-to-twelve months from now the Supreme Court orders the state to return certain pots of money that are currently being used to fund state programs to educate our children, feed the hungry and house the homeless. If so, the governor will likely have to call a special session to either cut spending or raise taxes….or maybe just use additional revenue that likely will continue to come in thanks to an improving economy without either raising taxes OR cutting spending.

The point is, *IF* the Supreme Court issues such an order, it will be the Supreme Court, not the governor or the Legislature, that will be ordering budget cuts or tax hikes. And if the justices wishes to legislate the budget from the bench, let ‘em. And then let the voters/taxpayers deal with them in 2012 the way voters dealt with justice in 2004 after their Guinn v. Legislature debacle in 2003

This is exactly why it is critical for Nevadans to retain their right to vote for our judges!

But for argument’s sake, let’s look at this from Gov. Sandoval’s point of view.

The governor does not want to risk losing any future lawsuits, or have those lawsuits hanging over the state’s head for the next year; nor is he exactly thrilled with the notion of having to call the Legislature back into a special session to deal with any possible future lawsuit losses. Instead, he wants to short-circuit the process and concede defeat before any other lawsuits are even filed.

As such, the governor is arguing that the state might somewhere down the road be ordered by the Court to give back some $600 million worth of funds and, therefore, wants to just go ahead and make $600 million worth of adjustments to his budget now rather than risk having to make them later.

OK, fine. In that case, here are the two options the governor could/should have:

1.) He could keep his word and reduce his current $6.1 billion general fund budget by $600 million and declare that the state needs to live within its means and, thanks to the Supreme Court, that means a $5.5 billion budget. Scalpel!

2.) Split the baby and subtract out the $300 million worth of additional spending the governor added to his $5.8 billion general fund budget in May and extend $300 million worth of the sunsets, keeping his general fund budget at the $5.8 billion level he originally introduced while promising he would not increase taxes or extend the sunsets.

As I’ve said before, I prefer Option #1….but can live with Option #2 and won’t crucify the governor if he gets some significant reforms in return.

The problem is it appears the governor may be going after Option #3.

Option #3 is to extend all of the $600 million worth of sunsets in order to continue spending the $300 million worth of new spending added to the governor’s budget in May before the Supreme Court ruling. In other words, they want to use the Supreme Court decision to have their cake and eat it, too.

If the governor wants to break his word and extend half of the sunsets so as to maintain his original general fund budget of $5.8 billion – a figure he himself said was adequate to run the government – while getting some significant reforms, then I’m not going to beat up on him.

But if he wants to extend ALL the sunsets just so he can spend that additional $300 million above and beyond his original $5.8 billion proposed general fund budget….well, Houston, we have a problem.

Which brings me back to my opening pop quiz: What was Gov. Brian Sandoval’s proposed general fund budget in January 2011?

And again, we all know it was $5.8 billion. But when I inquired of Budget Director Andrew Clinger this morning as to why the new proposed budget in the reported deal being negotiated with legislative Democrats was $300 million above the $5.8 billion figure, his response was: “The Governor’s budget wasn’t $5.8B in January it was $6.4B.”

Wha…wha…WHAT?

Yep, according to Mr. Clinger, we’ve all been using the wrong figure for four months and it’s all the media’s fault. “I can’t help the fact the media focuses on the general fund number.”

So the administration has allowed the media, without objection or correction, to use the $5.8 billion figure for over four months now….and suddenly the “real” budget figure is conveniently $600 million higher? What the hell are these people trying to pull?

Now, to be fair, this whole budget mess is EXTREMELY complicated. And our CEO, Dan Burdish, is right now trying to get a meeting with Mr. Clinger to see if he can make any sense of this seemingly absurd claim.

And I’m going to continue, for now, giving Gov. Sandoval the benefit of the doubt and will wait to see if Mr. Clinger can show us that the administration is not trying to take advantage of the Supreme Court decision to jack up spending by $300 million by extending the sunsets that really don’t need to be extended at all because the Supreme Court has only order the governor to give back $62 million, not $600 million.

But I am now in full “trust but verify” mode…and while I might not be from Missouri, I still want them to show me. And if they can’t….all bets are off. Stay tuned, Batfans.