Hard work begins for new Nevada governor

LAS VEGAS - Brian Sandoval stepped off the federal bench and waltzed through a campaign into the Governor's Mansion. Now he must take the lead in a difficult tango through the worst budget crisis the state has ever faced.

A day after his 12-point victory over Democrat Rory Reid in a campaign that never seemed to test him, Sandoval said he has reached out to legislative and congressional leaders, and began assembling his transition team and executive staff.

"There are a lot of challenges ahead," he said Wednesday. "I've been on the phone all morning. I'm going to work together with both parties across the aisle."

Sandoval later named Heidi Gansert, a Reno Republican and former Assembly minority leader, as his transition director. He named Dale Erquiaga, former deputy Nevada secretary of state and Clark County School District government affairs director as assistant transition director.

"I am honored that Heidi and Dale have agreed to join my team and help me get Nevada working again," Sandoval said in a statement.

When he takes the oath of office in January, Sandoval, 47, will make history as Nevada's first Hispanic governor.

But he also will inherit a state struggling to claw out of a financial abyss not seen before. The Great Recession has battered the Silver State, which leads the nation in bankruptcies, foreclosures and unemployment that hit a record 14.4 percent in September.

He campaigned on a no-new-tax stance, and reiterated his position as the governor-elect.

"I intend to stick to my pledge," he said. "I believe raising taxes would be the worst thing we could do."

Some economists have projected Nevada's budget shortfall at $3 billion - about half the existing budget - for the two-year spending cycle that begins July 1, 2011. Lawmakers of both parties have expressed pessimism that the state's finances can be balanced by cuts alone.

Late in the campaign Sandoval said he will propose "resetting" Nevada's baseline budget to 2007 revenue levels, roughly $5.8 billion. As justification he cites declining population and caseloads in most services except Medicaid.

But getting lawmakers to support his plan will require tact and political compromise.

"It's still a separate branch of government," said Senate Minority Leader Bill Raggio, R-Reno, who said Sandoval shouldn't expect blanket approval of his proposals, even from Republican lawmakers.

Democrats retained control of the state Senate and Assembly after Tuesday's election, but lost the supermajority in the Assembly they enjoyed in the 2009 session. Democrats have a slim 11-10 margin in the Senate and a 26-16 advantage in the lower chamber.

Neither party will have the partisan clout to approve taxes or override a veto when the 2011 Legislature convenes in February.

"We've got the same issues that we left there last time and probably magnified," Raggio said. "All of us agree that raising taxes is a last resort."

Before the election Sandoval suggested some services provided by the state could be delegated to counties and local governments - a position sure to draw the ire of cities and counties that have seen hundreds of layoffs under the recession's grip.

"Even if not a tax increase, somebody's going to have to pay for those issues," Raggio said.

"I'm not going to prejudge it," he added, "I'll wait and see what the executive budget is when it's presented."

Senate Majority Leader Steven Horsford, D-North Las Vegas, who has said a combination of tax increases and budget cuts were likely needed to plug the state's budget hole, urged bipartisanship.

"Nevada faces many difficult challenges that require all of us to work together," he said in a statement. "We must put Nevada back to work, improve our education system, and make state government more efficient and accountable."

Sandoval served two terms the Assembly in the 1990s and is a former chairman of the Nevada Gaming Commission. In 2002, he was the first Hispanic to win a statewide Nevada election as attorney general, but left that job three years later when he was confirmed as federal judge.

Sandoval resigned his lifetime appointment in September 2009 to challenge incumbent Gov. Jim Gibbons in the GOP gubernatorial primary. He defeated Gibbons by a two-to-one margin and ran comfortably ahead of Reid, even though the Clark County Commission chairman and son of Senate Majority Leader Harry Reid ran an aggressive campaign and outspent Sandoval by about $2 million.