State of the State: Education, economy at forefront Wednesday

Gov. Brian Sandoval came into office bullish on a state racked by unemployment, bankruptcies and foreclosures, saying in his first State of the State address, if Nevada were a stock, “I’d buy it now.” On Wednesday, the Republican will report to lawmakers and Nevadans on their return on investment from his policies and set up his priorities for the 2013 legislative session and the remainder of his term.The popular head of state is approaching the session that begins Feb. 4 from a more centrist vantage point than the conservative-talking candidate who became the state’s first Hispanic governor after the 2010 election when he beat a sitting Republican incumbent in the primary and trounced Democrat Rory Reid, son of U.S. Senate Majority Leader Harry Reid, that November.Sandoval has said he plans to run for re-election next year, and his televised speech before both chambers of the Nevada Legislature also will serve as a de facto opening statement for his 2014 campaign. “This is really the re-election session,” said Robert Uithoven, a Republican consultant. “People will be campaigning for him or against him based more on this session than last.”A rising star in the Republican Party, he was considered by national media as a possible running mate for Mitt Romney on the 2012 GOP presidential ticket, despite his repeated denials of having any interest in the job. Economic development, job creation, education reform — priorities Sandoval identified two years ago — will again be front and center in the months to come.Sandoval revamped the state’s approach to economic development, making it a cabinet-level position and establishing a blueprint to focus on attracting key industries such as tech, aerospace and medical services while helping existing businesses to grow. His administration says he’s halfway toward achieving a goal to create 50,000 jobs by the end of his term.His economic development team last year lured tech giant Apple to set up shop in Northern Nevada, in exchange for $89 million in tax abatements. Sandoval also led an entourage on a trade mission to China and South Korea, inking deals for a Las Vegas architectural firm and Reno-area candy maker to enter those Pacific Rim markets. A cooperative agreement also was forged to conduct scientific research.He pushed for education overhauls that give the governor authority to appoint a state superintendent and three out of four voting members on the state Board of Education, and put in motion efforts to abolish using teacher seniority when determining layoffs.A no-new-tax candidate in 2010, Sandoval abandoned that stance late in the 2011 session and showed his conciliatory side after a Nevada Supreme Court ruling put in doubt the funding sources of his bare-bones budget.He forged a compromise with lawmakers in both the Assembly and Senate to extend $620 million in taxes that were set to expire in June 2011. But the move drew harsh criticism from conservative Republicans, who voted against the tax extensions and the overall budget.Last March, Sandoval sought to defuse the lingering tax question over another temporary extension. While still pledging to hold spending to a minimum, Sandoval said he would extend the taxes again in his upcoming two-year state budget to avoid another round of deep cuts to education and vital social services. This time, GOP legislative leaders were quick to line up in support.Hardline conservatives decry the move, and the more left-leaning Democrats say it’s not enough after years of funding cuts to K-12, higher education and social services.But Sandoval’s stance shows a governor now more experienced, said Eric Herzik, political scientist at the University of Nevada, Reno.“He gets the conservative leadership to go with it, and he paints the Democrats into a corner with it,” Herzik said. “He can walk in and say, ‘Hey, I gave you these taxes.’“He comes off pragmatic and likable.”Sandoval also has bucked other GOP platforms. He began implementing Nevada’s health insurance exchange program in 2011. In December he became the first Republican governor in the nation to say he would expand Medicaid eligibility as called for under the federal Patient Protection and Affordable Care Act, even though he strongly opposed President Barack Obama’s signature legislation and hoped for its repeal.But after the U.S. Supreme Court upheld the law’s constitutionality and its individual mandate that everyone obtain health insurance or pay a penalty, Sandoval said he was “forced to accept it as today’s reality.” Sandoval has said he will propose expanding the state’s Medicaid program to encompass people up to 138 percent of the federal poverty level, adding an estimated 78,000 Nevadans to the Medicaid rolls. The federal government will pick up most of the tab for the first three years, though the state will share in added administrative costs.“My decision to opt in assists the neediest Nevadans and helps some avoid paying a health care tax penalty,” Sandoval said when he announced his decision.He also said opting in would save Nevada’s general fund about $17 million for mental health programs that will now be covered by the federal government, at least for a time.“Anybody who bothered to do the math on the Medicaid expansion would have come to the exact same conclusion that the governor did,” said Pete Ernaut, a Republican consultant and Sandoval confidant.Still, Medicaid is expected to cost the state about $200 million more than current spending levels.The state’s Economic Forum has projected tax revenues of $5.8 billion for the upcoming biennium. Combined with extending $620 million in sunset taxes, that would bring the proposed money pot to $6.4 billion, roughly the same as the current budget.State agencies, meanwhile, have requested $419 million more than that for “items of special consideration” — a wish list of wants and needs such as $83 million for the Department of Education and $100 million for the Governor’s Office of Economic Development. At the same time, Sandoval has said he will propose tax cuts for small businesses to help them meet health care reform requirements and has pledged to veto any tax increases. Though Nevada’s jobless rate remains the highest in the nation — 10.8 percent in November — the economy has shown a more steady heartbeat from the record high jobless rate of 14 percent in October 2010.“He’s been held harmless for anything wrong with the economy,” Herzik said. “Most governors looking at double-digit unemployment halfway through their term would be worried.”Though Nevada’s economy is trudging upward, albeit slowly, Sandoval is unlikely to unveil any big policy initiatives.“Usually big ideas require revenues,” Uithoven said. “I don’t think you’ll see major policy announcements that would require large amounts of public funding.”But Nevada’s stabilizing economy will be a platform for Sandoval to champion.“The governor has the luxury for the first time in many sessions to not have a State of the State that is totally driven by budget and talk of taxes or cuts,” Ernaut said. “I think he has the opportunity to think more long range and not just have to apply triage.”