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Gov. Brian Sandoval, fresh off a landslide,  still has to drag his fellow Republicans into  supporting his program.

Drivers Inc.

Uber has been legally enjoined by the courts from operating in Nevada while the Legislature gets a chance to decide what to do with it. Meanwhile, two articles in the Nation magazine suggest that Uber itself—the corporation, not the drivers—is fat that can be trimmed away.

The drivers must pay for their own cars, which is nearly the entire value of the company, so why do they need Uber? the magazine asks.

“Almost all of the actual capital is already owned by the workers, in the form of cars that they pay for and maintain themselves,” the magazine reported. “And these workers labor individually, doing the same tasks, so there’s no need for a management class to control their daily operations. The capital owners maintain the phone app, but app technology isn’t the major cost, and it’s getting cheaper and easier by the day.”

One thing the corporation does do is take 20 percent of the drivers’ earnings. Otherwise, in contrast to its claims of being innovative, it acts much like any other corporation—“They are fighting regulators and hiring lobbyists in order to bring down the incumbent taxi-medallion business.”

Then there’s Uber’s use of an old National Rifle Association tactic. The Wall Street Journal reports that in Washington, D.C., the corporation dealt with regulators by calling on internet denizens to drown the regulators in emails and tweets, which the obedient Uber buffs did, a technique that also worked in Virginia where the governor and other officials collapsed before the flood and gave Uber its way.

In that state the corporation hired different lobbying firms. In Nevada its lobbyists are Scott Bensing, Chelsea Capurro, Tia Dietz, John Griffin, Josh Griffin, Matthew Griffin, Erik Jimenez and Mary Sarah Kinner.

And like airlines, whose ticket prices fluctuate like crazy, Uber has something called “surge” pricing. Prices can change at any time, depending on availability of drivers and the degree of demand.

Sunlight and stagnant wages

There was a time that “Solar energy isn’t practical” was a mantra among energy executives, to the point that Ralph Nader said solar would remain impractical until the oil companies got a franchise on the sun. Those days seem to have passed, and as a sun-drenched state with lots of empty land, Nevada is naturally getting a good share of that kind of economic activity.

A report from the National Solar Jobs Census 2014 was conducted by The Solar Foundation and BW Research Partnership tracked jobs growth in the solar sector by surveying 7,600 solar industry companies.

Its report reads in part, “Nevada’s solar industry employed 5,900 Nevadans in 2014 and added 3,500 solar jobs over the previous year. Nevada’s 146 percent solar industry employment growth allowed it to rise back to seventh in rankings of highest number of solar jobs by state—and number one in solar jobs per capita. Solar employment in Nevada grew more than 53 times faster than the state’s average employment growth rate of 2.7 percent in the same period.”

The margin of error for the survey is plus or minus 2.03 percent.

Unfortunately, weekly wages in the state are still stagnating. During the third quarter of 2014—the most recent quarter for which figures are complete—wages grew by just half a percentage point.

Meanwhile, the Nevada Senate approved a bill that would cut construction wages on public works projects. The Assembly gets the next crack at the measure.

—Dennis Myers

Sandoval can’t get respect

2014 dominance becomes 2015 struggle

It seems like only yesterday that Gov. Brian Sandoval was riding high—coming by off the Tesla giveaway with its Dennis Myers promise of thousands of Nevada jobs, winning easy reelection in an election in which the Democrats couldn’t scrape up a credible candidate, parceling out excess campaign money to other Republican candidates, helping achieve the first Republican sweep of all state executive offices and both houses of the legislature since 1890. Now, however, Sandoval can’t get arrested. And he might wish his party had won one fewer of those executive offices—it’s little-known State Treasurer Dan Schwartz who is taking him on most directly. Republicans in the Legislature, particularly the Assembly, regard Sandoval’s budget recommendations as one option, a sharp change from the respect accorded most executive budget proposals in the past. Sandoval has had a prickly relationship with the intransigents in his party. He played footsie with them in his first term as governor, running for and winning the office on

“If the governor is not successful, this will be the collapse of his governorship.”

Fred Lokken Political analyst a no-new-taxes pledge. But it didn’t necessarily win him their love—they defeated his candidate for chair of the Nevada Republican Party organization in 2013 and have taken shots at him from time to time, as when he sought extension of “temporary” taxes in the last Legislature, a step he wants again this year. And his failure to repeat the no-tax pledge in his second campaign raised their hackles. GOP Assemblymember Michelle Fiore has said Sandoval’s budget should go “down the drain.”

Treasurer Schwartz has equated the governor’s proposed business license tax to the margins tax defeated in the November election. “Moreover, Nevadans rejected changing the Constitutional cap on mining industry taxes in the 2014 election,” Schwartz wrote online. “In a democracy, shouldn’t elected officials respect the express will of the people?” And Schwartz has issued what he calls “alternative budget” recommendations to the governor’s budget proposals.

Schwartz’s plan was not taken seriously by budget committee members in either party—the governor’s GOP allies tore into him—but still gives the intransigents a rallying point. “He may have bungled the numbers, but they are with him, not the big guy,” said one lobbyist. The Nevada Women’s Lobby has challenged Schwartz’s plan, which is not an ally that brings the governor any gain in credibility with the GOP caucus. For that matter, Sandoval’s strongest supporters in the Legislature so far are Democrats, and they have only enough votes to stop action on taxes (under a minority control provision in the state constitution), not enough to pass Sandoval’s tax plan. In the Senate, Sandoval’s party has just a one vote majority—11 out of 21 members, not enough to pass a tax increase. Sandoval needs every Democratic senator plus four Republicans under the supermajority requirement.

To be sure, calling Schwartz’s recommendations an “alternative budget” is like describing Archie Comics as Moby Dick. It’s only three pages long and deals with state spending in the broadest terms, not including the culling and cutting governors and legislators must do. Article 4 of the state constitution makes the executive budget recommendations (including those for the state treasurer’s office) a function of the governor, leaving the treasurer with no part in the process at all, so Schwartz’s budget falls in to the “Who asked you?” category. In addition, it returns to the otherpeople’s-money approach, using an air travel fee that would make Nevada’s revenue sources still more unstable and unpredictable and is probably illegal under federal law.

But as a challenge to Sandoval, it seems to have gotten Schwartz plenty of ink, and made him a momentary rallying point for Republican critics of the governor—including State Controller Ron Knecht, who jumped onto the Schwartz alternative bandwagon. (One legislative budget committee member said Schwartz’s budget for the treasurer’s office was “just as poorly constructed” as his alternative.)

Schwartz ended his “alternative budget” with the phrase, “We look forward to working with the governor and legislature ...” The sentiment was not returned.

Make or break

Political analyst Fred Lokken said that if Sandoval does his job and uses a governor’s normal behind-the-scenes advantages, his power will return.

“It may still be there,” Lokken said. “The new Republican legislators believe they somehow received a mandate from the votes on Nov. 4, and they can flex their muscles. But these [new legislators] are a lot of inexperienced people that are backed by a broken state Republican Party.”

He said what the governor is aiming at with his tax plan is more revenue, and if that’s what comes out

at the other end of the Legislature, Sandoval will be able to claim success, even if the final tax package is not what he proposed.

“It may not be this tax,” Lokken said, his voice giving the emphasis. “I don’t know that it’s DOA, but it’s certainly a controversial tax.”

In 2003, when Gov. Kenny Guinn proposed sweeping changes in the tax system, he did not get the tax he wanted—a business gross receipts tax—but he did get most of the revenue he wanted, after legislators substituted a modified business tax. But Guinn’s fellow Republicans—the intransigents of that year—blocked action through the regular session and two special sessions before it passed. Then as now, the party came second to ideology with some GOP members. (An alternative budget produced in 2003 by Assembly Republicans was more detailed than Schwartz’s document.)

Though it has been given little news coverage, both the governor and the state have a lot riding on this legislative session. Lokken said defeat of Sandoval’s program would create terrible political problems for the rest of his term.

“If the governor is not successful, this will be the collapse of his governorship.”

And it won’t be any better for Nevadans, he said. If Sandoval’s program stalls, “The legislative agenda is shot to hell. The governor’s agenda is shot to hell. Economic development would fall apart. This is one of the highest stake [legislative] sessions in the history of the state of Nevada.”

Investors and businesses mulling a move watch these things, he said.

“Recession and cuts have made this the smallest state government in the United States,” Lokken said. “State workers haven’t had a raise in 5 or 6 years. They are overworked. Morale could not be lower. They’ve waited for light at the end of the tunnel. We can expect a slide in the quality of our state government if things don’t change. ... State government is hanging on by a thread.”

That would play into the hands of the anti-government intransigents, who like it when government doesn’t work. But the intransigents won’t gain much by blocking Sandoval, Lokken said.

“If this session turns out to be a disaster, I assume it will be put squarely on the backs of the conservatives.”

The business community might not fare much better. Though business spokespeople have been saying for a decade or more that they are willing to accept a new tax system, they have defeated two such plans sponsored by the state teachers—one in court, the other at the ballot box—and have been grumbling about Sandoval’s approach and encouraging Republican legislators looking for a different approach. Ω

“Welookforwardtoworkingwith thegovernor.”

Dan Schwartz State Controller

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