Exit Sandoval

In 2009, the Nevada Republican Party was in serious trouble. It had won the governorship in 2007 with Jim Gibbons, and his shallow views of public policies, lazy work habits, and disorderly handling of his divorce made him enormously unpopular. If he became the Republican nominee when he ran for reelection, the GOP was doomed.

A group of high powered lobbyists and businesspeople had, in 1996, won the governorship for the GOP by financing the candidacy of Kenny Guinn and freezing all other candidates out. They decided it was time to do it again, and their attention turned to Brian Sandoval.

Sandoval had once been a fast rising political star. He went from state legislator to chief gambling regulator to state attorney general in nine years. His rise alarmed Democratic U.S. Sen. Harry Reid, who saw an attractive Latino Republican as a future challenger. Reid decided Sandoval was the ideal person to fill an open district judgeship and gave his name to George W. Bush, then in the White House. Bush nominated Sandoval in 2005, taking the young politician out of politics.

The business/lobbyist cabal convinced Sandoval to resign the judgeship and re-enter politics, both of which Sandoval did on September 15, 2009. The 2010 primary against Gibbons was a milk run, Sandoval beating the incumbent by an incredible 28 percentage points. In the general election, Sandoval faced Clark County Commissioner Rory Reid, who was enormously popular on his home turf—he won election to a second term as commissioner in a landslide—but also faced the difficulty municipal officials often have making the transition to statewide office. He trailed Sandoval through the entire campaign and lost 53 to 42 percent.

The lobbyists and businesspeople had their governor. Sandoval brought two important qualities into office. He had the political protection of the cabal and need not worry about reelection. And, though journalists and other politicians constantly gossiped about his future, Sandoval never showed any desire to reach higher or leave the state of Nevada for D.C.

The backing of the moneymen gave him political security, though it also held him beholden to them. (He will now join a major casino entity as president.) The unwillingness to leave Nevada left him free to take whatever policy positions he wanted without worrying about their impact on his political future. When he passed up his best chance to go to D.C.—a U.S. Senate race when Harry Reid retired—it made it patently clear he was not a threat to other politicians, further enhancing his freedom of movement. It also allowed him to be a real Republican with traditional GOP values.

The greatest limit on Sandoval’s flexibility was self-inflicted. For some reason, he ran on a no-new-taxes pledge, which leaders in both parties thought unnecessary. He was going to win, anyway, and then face massive problems of historic proportion, so why take anything off the table?

Hard times

Sandoval took office in January 2011, a grim time in Nevada. The Great Recession caused by Wall Street deregulation that triggered the financial crisis of 2007-2008 and subprime mortgage crisis of 2007-2009 hit Nevada particularly hard. The state had the highest foreclosure rate, the highest jobless rate, and residents were leaving at rates Nevada had not experienced in the postwar era.

In his first legislative message, Sandoval spoke of Nevadans as a family:

“Nevadans are confronted on all sides with bad news. Our friends have seen their credit ruined. Someone in our family has lost a job. The house around the corner stands vacant. A neighbor has closed her business. A relative is one trip to the doctor away from financial or physical ruin. Some believe government is the only solution to our current plight. I disagree. Unemployment, foreclosures, bankruptcy—the cure is not more government spending but helping businesses create jobs. The key is to get Nevada working again.”

The tone was a disappointment to Democrats and moderate Republicans who had hoped Sandoval would govern in the Kenny Guinn tradition. It is hard times when the public needs government to be there. Guinn left office complaining of those “who don’t believe in government,” and Sandoval seemed to be embracing that group. Moreover, Sandoval’s program included beating up on government workers who were suffering from the recession caused by business.

The state had a $2 billion deficit, and Sandoval proposed a $5.8 billion budget. It included what amounted to a tax on state government workers—a 6 percent pay cut, coupled with loss of longevity pay and step increases. To add insult to injury, workers were forced to take 12 days a year off.

Sandoval’s program also showed the foolishness of his no-new-taxes pledge. After the anti-worker proposals, he still needed revenue, and he tried to tap local governments for some of their revenues—in effect, raising state taxes by having them laundered through municipalities. The courts blocked that maneuver at a cost to Sandoval’s budget of $656 million.

Fortunately, the anti-worker policy was a one-time thing, putting the burden of a revenue shortage on a vulnerable group, instead of those who caused it. As his administration wore on, Sandoval represented a throwback to the Republican Party that existed before Newt Gingrich and his allies intentionally polarized the system in the 1990s. He was a civil, agreeable Republican, only occasionally yielding to the temptation to join the party’s extremists.

Sandoval’s other responses to the recession and hard times allowed him to bask in the glories of more jobs and an economic boom without having to do anything about the wreckage those policies created at the local level.

He lured Tesla and thousands of jobs to Storey County with a corporate welfare payout larger than the corporation demanded and larger than any state government had ever offered—$1.3 billion, the equivalent of 16 percent of the Nevada state government’s annual budget—and dumped the consequences into the laps of local governments in Lyon, Storey and Washoe counties, including a housing shortage that drove rents and home prices sky high. The deal was approved by the Nevada Legislature in a special session in September 2014, and the Tesla plant began operating on July 29, 2016, which gave the construction industry almost two years to prepare for the arrival of thousands of workers who poured in looking for jobs. But builders said publicly that they were reluctant to move ahead until the actual need arrived, and Sandoval did nothing to use the governor’s pulpit to jawbone the industry to get moving.

A few local officials anticipated the havoc Sandoval would wreak by reducing school funding and causing a shortage of housing. Reno City Councilmember Jenny Brekhus said, “That is a critique I have of Sandoval. He did economic development on steroids to get the state out of the recession but ignored local government and school districts’ ability to accommodate growth propelled by his policies.”

This and other corporate welfare represented a sharp change in Nevada policies, which previously kept corporate subsidies low. No other governor of either party had engaged in such giveaways. “I don’t see any reason for that,” Guinn had said of the notion of increasing business tax breaks.

At the current level that abatements are being used by Tesla—$240.3 million—and at the current level of Tesla workers—7,059—Brian Bonnenfant of the Center for Regional Studies said that the cost to the public is $34,042 per job. Readers are cautioned against using this figure in isolation. It’s a figure that’s easy to over-simplify because other parts of the Tesla deal could generate public revenues.

“One must figure in the sales and property taxes, fines and fees paid by the 7,059 new jobs brought to the area (induced impact), and weigh these revenues against costs to government to service the new households,” Bonnenfant wrote. “Most, if not all, fiscal impact analyses required by local governments for new housing developments show a net-positive to government revenues from new residential construction over 20 years. Residential developments are shown to provide more government revenues than costs. … Moreover, the net impact to government revenues must also include the indirect impacts from the abatement, which is the real (but often ignored) objective of abatements. The abatement for Tesla helped market our region as an ideal hub for manufacturing and distribution. The global hype about [Tahoe-Reno Industrial Center] and its famous tenants (Tesla, Google, Switch, Apple, Blockchains, Jet, etc.) is now parlaying into relocation and expansion of HQs and high-tech companies with high wages.”

So the jury is still out on whether the Tesla deal produces more revenue than it costs. And it may never be known. Politicians are not wild about research into their governing devices. A lot of people in the state have a stake in corporate welfare and don’t want any computations to undercut it. Ideology sometimes trumps wisdom. Democrats don’t want to hear the evidence that motor voter doesn’t work. Congressional Republicans vetoed follow-up studies to learn if their welfare reform program worked. State legislators and others, including journalists, bewitched by the big names Sandoval brought to Nevada by throwing outlandish tax breaks at them, have done little follow-up to learn whether the investment was worth the return. Will state legislators who approved Sandoval’s deals want to check back on them?

School fight

One of Jim Gibbons’ legacies was his assault on education, which undercut Sandoval’s favorite state concern, economic development.

Gibbons slashed education spending in his budget recommendations to the legislature, particularly in higher education. The state’s higher education system was cut “somewhere between 36 and 42 percent” during Gibbons’ term, according to Nevada System of Higher Education Chancellor Dan Klaich in 2011. Joblessness in Nevada was at 13.3 percent.

In his first legislature in 2011, Sandoval recommended spending that legislators said was right out of the Gibbons songbook—cutting elementary and secondary education almost six percent and higher education by just under 18 percent. The Associated Press began its report, “Gov. Brian Sandoval wants to improve Nevada’s troubled schools while slashing education spending.” Las Vegas columnist Ken Miller wrote, “But it’s difficult to believe a governor’s priority is getting Nevada back on the right track when he proposes education cuts so enormous they threaten to not only limit the quality and availability of higher education, but make it so cost-prohibitive that few will want to try.”

When Democrats added money back into the education budget, Sandoval vetoed that budget. Clark County students who traveled to Carson City to lobby built a “Sandoville” on the lawn. A coffin full of letters protesting the education spending level arrived.

Sandoval’s veto message said the bill had the “clear intention of casting opponents as somehow ‘anti-education’ while at the same time forcing a tax increase.”

“We are hearing from countless parents, students and educators that the governor’s proposed budget would decimate Nevada’s schools,” said Assembly budget chair Debbie Smith. “They want us to pass a more prudent plan.”

It was at that point that the Nevada Supreme Court overturned Sandoval’s raid on local government revenues, creating a $600 million hole in the budget and uniting Sandoval and the Democrats in getting any schools budget approved. Sandoval ended up breaking his tax pledge and accepted extension for two more years of payroll, sales and car registration taxes that otherwise would have expired. However tense the education budget standoff, Democrats said dealing with Sandoval was still easier than with Gibbons or some of the social conservative Republicans in the legislature. His calm and charm made their disagreements easier to negotiate.

And the message brought to the capitol by actual parents and students was not lost on Sandoval, nor was the repeated importance of education cited by companies looking for new locations. In 2015, after winning reelection without a no-new-taxes pledge, Sandoval offered a $1.5 billion tax program that would be largely devoted to education. Some of it went to new fads like all-day kindergarten and an English language learner program, but no one objected. The important thing was that Nevada was getting serious about education after the Gibbons era had disdained it.

The governor engaged, as so many governors have done in the postwar era, in some reorganization, moving boxes around on the state organizational chart. His proposals, which the legislature approved, removed the lieutenant governor from his roles in economic development and changed that department’s functions into an arm of the governor’s office. He also changed the Nevada Board of Education from an elective board to a mostly appointive board. Appointments were doled out to influential groups like the Nevada Association of School Superintendents. The Nevada Assembly and Senate were given two of the appointments in violation of separation of powers but making it easier to win legislative approval. The governor also now appoints the state schools superintendent, previously the function of the board. The voice of the public in education policy was reduced, and it is particularly detached from the needs of low-income parents and students.

Sandoval’s staff often struck legislators as amateurish. During Gibbons’ one term, he cast more vetoes than any other governor. Some of that was attributed to his not doing his homework and heading off problems before bills got passed, but some of it was blamed on aides who did not alert Gibbons to problem areas in bills. Over his two terms, Sandoval cast more vetoes than any governor, and his staff was similarly faulted.

Administrator

Sandoval was not a strong leader, seeming to rely on the fact that no one could touch him politically as long as his moneyed backers supported him. He tended to administer government, not lead it. When in 2013 the Sacramento Bee broke the news that Nevada mental patients were being given bus tickets and Ensure and shipped out of state where they became homeless, committed crimes and died, Sandoval vanished from sight. As the story unfolded, others said the things the governor should have been saying. “The reason we’re investigating is because this is awful,” said state health officer Tracey Green. “We are saddened by this.”

“We own it—we blew it, and we are taking corrective action,” state Health and Human Services director Michael Willden said, a quote that appeared everywhere from the Bee to a website called End Time Bible Prophecy. Nevada was getting big play.

But departmental functionaries, though trusted inside the state, were not the figures who count when a state’s reputation is on the line. With national news reports relentlessly drumming the patient dumping story, the state needed the governor front and center, denouncing the shoddy practices, instituting reforms, meeting with families and the homeless, silencing underlings who tried to justify the dumping. Sandoval did none of that.

His first comments finally came when a KSNV television crew cornered him at a public event. When a governor could have shaped public response to the appalling news and directed the bureaucratic reaction, Sandoval was below the radar.

He was similarly reticent when Donald Trump came on the scene. Though he has avoided identification as a Latino politician, Sandoval did express his concern over Trump’s anti-migrant stances: “I’ll put it this way—I disagree with him, and I have said that publicly. It is not good for the Hispanic community, and they are not reacting well to it.” He supported Marco Rubio for the GOP presidential nomination, then John Kasich. When Trump became the apparent nominee, Sandoval endorsed him over Hillary Clinton, doing so as inconspicuously as possible (by tweet), not even using Trump’s name: “I plan to vote for the presumptive nominee although it is no secret that we do not agree on every issue. Elections are about making choices and the Democratic nominee is simply not an option.”

As governor when Trump entered the White House, Sandoval has avoided talking about Trump, except when he could not avoid it—not generally being considered a Trump critic in this period when the fate of the GOP is at issue. Republican governors Charlie Baker of Massachusetts, Larry Hogan of Maryland, John Kasich of Ohio (who appears likely to oppose Trump in the 2020 primaries and caucuses), and Susana Martinez of New Mexico had the nerve to oppose Trump outspokenly, and they could have used Sandoval’s help.

When the 2014 dispute over Cliven Bundy’s failure to pay his bills unfolded in Bunkerville, Sandoval made one of his bows to the far right, endorsing Bundy, while the rancher lured people with weapons to Clark County for a standoff with the Bureau of Land Management. What was most interesting was Sandoval’s rationale for that stance.

A free speech zone, common to disaster sites like wildfires, had been established near the standoff to allow reporters and newsmakers to conduct interviews in safety and out of the line of fire. Sandoval issued a prepared statement attacking them: “Most disturbing to me is the BLM’s establishment of a ‘First Amendment Area’ that tramples upon Nevadans’ fundamental rights under the U.S. Constitution.” He called the zone “offensive to me and countless others” and called for it to be shut down, and it was. What’s amazing is that a former federal judge did not know the purpose and history of such zones; that a GOP governor who addressed the 2012 Republican National Convention did not know that convention had such zones; or that a Nevada governor did not know the state has municipal free speech zones. Sparks has one on Tenth Street between Victorian Avenue and C Street, Reno in Idlewild Park on Earth Day. They don’t prevent expression from taking place elsewhere. They just provide a place of safety.

Sandoval was later embarrassed when the rancher he endorsed unsurprisingly started spouting off about race.

Coda

Sandoval led entirely by example and by the strength of his influential lobbyist supporters, never speaking out about what meanspirited, polarizing leaders were doing to his party and society. He embraced the Affordable Care Act enacted by a Democratic Congress, but only by setting up a state health care exchange and expanding Medicaid, not by forcefully endorsing the concept of national health care. The Nevada Independent last year ran the headline, “Despite moderate stances, Sandoval issued most vetoes in Nevada.” That encapsulated some of the questions about Sandoval, leading to questions about whether his moderate style and charm concealed reactionary policies. And he was enabled by state journalists whose scrutiny of his policies was slight. In eight years, he did nothing about the state’s oppressive tax structure that burdens workers more than the one percent.

Merriam-Webster dictionary uses actual sentences from books, magazines and newspapers for examples of how to use the words and terms it defines. In the entry for PATIENT DUMPING, it uses the January 2018 sentence, “On her watch as executive editor, the Bee was a Pulitzer finalist for feature photography in 2013 and stories about Nevada’s patient dumping in 2014,” thus immortalizing Nevada’s behavior.

What Willie Brown said of Jerry Brown during his first 1970s term as governor is true of Sandoval—that he never used his great popularity for something that really mattered.