Exit Guinn

The mammoth 2003 political battle over Gov. Kenny Guinn’s tax reform and tax hike defined his administration, but it was not the only thing he did in eight years. Some of his best and worst moments are little known because they did not bewitch reporters for long. Nevertheless, many of his actions will have long-lasting effects. No major scandals blighted his tenure. He bequeaths to governor-elect Jim Gibbons a healthy state treasury. Of course, “2003” will probably be written on his figurative tombstone. Considered a dilettante by many pros, he surprised them by being willing to endure abuse and rage from some of his fellow Republicans for an issue he considered important. “So it is a testament to Guinn’s savvy and leadership,” Time magazine observed, “that instead of being wounded in the civil war, he actually came out stronger, eventually broadening his public support and raising his standing among good-government watchdogs.”

1. Tax reform
Since 1981, Nevada’s tax system—never very fair or stable—has been worse because of that year’s “tax shift,” under which state government went to reliance on the sales tax for revenue. That tax fluctuates with the economy, meaning that when times are hard and public services most needed, revenue goes down. The Government Performance Project in 2002-03 ranked the tax systems of state governments and adjudged Nevada as “regressive and dysfunctional,” calling it inadequate in management, fairness and its ability to produce needed revenue. Nevada suffered crippling budget crises in 1981-82 and 1991 and a milder one in 2001-02. Then tribal gambling in California came along and started eroding another Nevada revenue source—casino taxes. It all damaged the state’s economic health, including its bond rating, costing taxpayers money. Legislatures and governors came and went, and except for a small property tax hike under Gov. Richard Bryan, they all flinched from coming to grips with solving the problem. But Guinn bit the bullet. He reorganized state government and followed it by putting a panel of wise people to work on a plan to make state taxes more stable, more predictable and fairer. He took the panel’s proposals, retooled them a little and won their enactment from the Nevada Legislature in a monumental political battle in which he was bitterly attacked by a faction of social conservatives in his Republican Party. He didn’t get all that he wanted—tax equity in particular was not given enough attention—but Nevada is now safer from the hazards of economic downturns and better able to serve the public in hard times.

2. Mental health treatment
For most of the postwar years, Nevada has been known in places like the front page of the New York Times as a state that does not treat its mentally ill well—or, sometimes, even treat them at all. Legislatures and governors have handled mental health as a sort of flexible joint in the state budget, to be widened or narrowed depending on the needs of more popular programs. Guinn committed substantially more resources to mental health than previous governors, and he did not raid it when the economy dipped. Because of what he has done, subsequent governors and legislatures will find it much more difficult to abuse this important and often maligned program.

3. Gambling addiction treatment
Anyone who thinks that the first state to allow wide open casino gambling would also be the pioneering showcase for handling compulsive gamblers would be entirely logical—and dead wrong. Nevada ignored this problem that its major industry produces for 74 years and, at one time, even looked the other way when casinos milked gambling addicts. In 2005, Guinn proposed a small program, costing $200,000 with some hope for grants and gifts to push that amount up. It was what one article called “chump change,” particularly in a state where gambling addictions cause $300 million to $450 million a year in social costs, according to a University of Nevada study. Even then there was resistance in the legislature, but it was overcome, and a program funded by a slot fee was instituted.

4. Medical malpractice
In 2002, Nevada physicians hired an advertising agency to stage a malpractice crisis in Las Vegas to create pressure against malpractice lawsuits. Soon television ads and other techniques were being used to manufacture consent to tort “reform.” Journalists went AWOL. Instead of scrutinizing the claims of this doctors’ campaign, they soon started reporting those claims—such as the assertion that doctors were fleeing the state and OB/GYNs were becoming rare—as fact. The Las Vegas Review-Journal ran this headline: “MEDICAL MALPRACTICE CRISIS: Pregnant women turned away.” (One rare reporter was not so gullible. KVBC’s Beth Fisher produced an enterprising report that showed an appointment with an OB/GYN in Las Vegas was easier to get than boredom in accounting class.) The capper came when physicians at the University of Nevada Medical Center trauma unit went on strike. Guinn called the Nevada Legislature into special session to give the doctors much of what they wanted. It’s difficult to imagine a strike of working people getting such action. The Nevada Board of Medical Examiners and Congress’s General Accounting Office both later conducted inquiries and issued reports suggesting that no “crisis” had existed in Nevada or was exaggerated.

5. Utility deregulation
Nevada’s trade and commerce overlaps with California to a point that the Silver State is often dependent on the Golden State. Never was that more clear than during the electricity crisis of 2000-2001 that followed California’s deregulation of utilities. Those utilities, according to a Federal Energy Regulatory Commission investigation, engaged in “economic withholding and inflated price bidding, in violation of tariff anti-gaming provisions.” Nevada had also begun deregulating its own utilities before Guinn became governor. California’s rolling blackouts, wild “gaming” of the power market and utility bankruptcies were a sober lesson. In addition, Nevada’s own power prices were severely affected by what happened in California. But stopping Nevada deregulation was very difficult—"The toothpaste is out of the tube,” said Sierra Pacific CEO Walter Higgins, a metaphor that became popular among defenders of deregulation. Nevertheless, at the height of the crisis on Oct. 4, 2000, Guinn (a former utility president) delayed the start of electric retail sale competition for a year, giving the Nevada Legislature a chance to reexamine what it had done. However, Guinn coupled this action with an endorsement of the principle of deregulation. After the U.S. Supreme Court ruled that contracts could be voided if “the prices, terms or conditions of … contracts are unjust or unreasonable,” Nevada moved to try to recover its losses from the California crisis. Economic populists like Andrew Barbano faulted Guinn for not killing deregulation entirely, but utility regulator Judy Sheldrew said Nevada’s law was different—"It never contemplated leaving customers, particularly small customers, at the mercy of unregulated monopolies.” Not everyone is convinced.

6. Workers insurance made private
One state program had long been a chronic pebble in state government’s shoe. Mismanagement and whopping unfunded liabilities in the state workers injury insurance system in the 1980s and ‘90s (some brought on by holding down rates to please employers) nearly brought the system down. The system was “reformed,” mostly at the expense of workers themselves, and it was still state-run and still not entirely healthy when Guinn became governor. He supported turning it into a private company, which relieved the state of more than a billion dollars in liabilities. But a lot of people are not comfortable seeing the private sector in charge of protecting workers’ rights.

7. State worker morale
Guinn’s predecessor, Bob Miller, went out of his way to antagonize state workers, apparently believing that a hostile relationship with them would be good public relations for a Democratic governor. After 10 years of Miller’s enmity, Guinn did a lot to make public employees feel like partners in government’s missions again. The reorganization during his first two years was difficult for state workers, and he tried to make them feel that he appreciated them. (He once phoned this reporter to say that he liked an article about the difficulties faced by public employees.) “State employment is a privilege, but it should not be a sacrifice,” he said once. State government remains a farm team for local governments, which constantly lure some of the best people away with better pay—costing taxpayers money for continual state government retraining—but thanks to Guinn, most state workers feel valued again.

8. Prescription drug program for senior citizens
It didn’t take a lot of political capital to accomplish a program subsidizing senior citizens’ prescriptions—politicians were lining up for the chance to be the one who got the credit. But his commitment to the concept brought enough Republicans along that it kept it from being another Republican-versus-Democrat battle over whether it was the proper role of government.

9. Millennium scholarships
Guinn convinced the Nevada Legislature to use a portion—about 40 percent—of the state’s lawsuit settlement with the tobacco companies to give Nevada high school graduates free college educations. This action was important for more than just the meritorious purpose of education. Until Guinn acted, the health care community and the state attorney general had the process greased to hijack the entire tobacco settlement, leaving nothing for other worthy programs.

10. Educating the public
At the 2003 legislature, social conservatives used a minority control provision in the state constitution to stop Guinn’s tax package, holding the whole legislature hostage. He refused to yield, facing them down for weeks and calling the legislators back into two special sessions until he won, all while trying to reach a negotiated agreement. By waiting out the social conservatives during the 2003 battle, he kept them in the spotlight, and they did not benefit from the exposure. Their intransigence was exposed to public view, and it all backfired on them in the next election. When the refusniks left the capital after that battle they—and nearly every commentator in the state—believed that they would score big in the 2004 election. They were wrong. A couple of Guinn’s allies were defeated in Republican primaries, but in the general election, voters increased the Democratic majority, making it much more difficult for such a deadlock to reoccur.

11. Lack of faith
Guinn did not give the impression that he had great trust in the public. In his first campaign, he told the public very little about what he would do as governor and relied on his handlers to get him elected by starving other candidates’ campaign treasuries. In his reelection campaign, he refused to state his tax position until after the election and said if the public didn’t like it “then the voters won’t vote me in,” an easy stance to take when his backers had made sure his opponent had no resources for a viable campaign. In that same campaign, in which he held a commanding lead in both public support and money over Democrat Joe Neal, he refused to debate.

12. Setting an example
Guinn was one of the few politicians who elevated public discourse in Nevada. His critics among social conservatives tended to use acerbic attacks that described their opponents (including Guinn) as not just mistaken but wrong, immoral, even evil. Guinn’s language was normally restrained (he said that one comment he made about political cowardice was aimed at himself, though legislators took offense at it) and only rarely did he become angry with other public figures, most of whom he genuinely liked. In 2003, after he had been rancorously and repeatedly attacked by Assembly Republicans, a story went around that he encountered one of them—Bob Beers—at a restaurant and refused to shake hands with him. Whether it happened, Guinn did not exhibit such behavior in his conduct as governor. Even when he attended U.S. Rep. James Gibbons’ speech to a joint session of the legislature and Gibbons rudely attacked his tax program, Guinn did not respond in kind. He could be critical of other candidates for their issue stands, but ad hominem attacks were not his style. He set an example too few followed.