By Alejandro Lazo
CARSON CITY, Nevada--In a Republican Party hoping to woo
Hispanic voters in 2016, few can claim the résumé of Gov. Brian
Sandoval. He is the state's first Latino governor and the national
GOP's ideal candidate to run for the U.S. Senate seat Harry Reid
plans to vacate that year.
But Mr. Sandoval has upended GOP politics, declining to say
whether he'll run for the Senate and pushing for the largest tax
increase in Nevada history. His tax-increase proposal has divided
GOP state legislators here during a biennial session.
Advocates say the governor, whose supporters include
independents, Hispanics and one of the state's most powerful
unions, serves as a model for how Republicans can broaden their
appeal. He has been mentioned as a potential vice-presidential
nominee.
Critics say the 51-year-old former federal judge is alienating
conservative Republicans with his policies. This year, he has been
at odds with two of the state's top Republicans, the attorney
general and treasurer, over immigration and taxes.
Mr. Sandoval has defended his proposals, including his $1.1
billion tax increase, saying they are worth his own "political
peril." "I'm as conservative as anybody, but it's not conservative
to have bad schools. It's not conservative to have bad roads. It's
not conservative to have budget struggles every other year," Mr.
Sandoval said in an interview. "Growth isn't paying for
itself."
Mr. Sandoval's moves underscore how complex the political
terrain is in Nevada--a swing state with a strong libertarian
ethos, but also home to a highly transient and mostly urban
population. Powerful labor unions, a rapidly growing Hispanic
population and a weak state GOP infrastructure have all been part
of the political landscape in recent years. The governor says he
has tried to pave a middle path, saying his priority is to
diversify the state's economy from one based largely on tourism and
gambling to one that demands a more educated workforce.
Last year, he lured Tesla Motors Inc.'s $5 billion, advanced
battery factory to the state. The governor hailed the move as a
boon to the state's economy though critics have questioned its
value given the $1.3 billion in tax breaks granted the company.
Nevada has one of the lowest tax burdens in the country,
including no income tax. The governor's education initiatives,
which would be paid for by his proposed tax increase, include
boosting spending for English learners and the poor.
The most controversial part of his plan is a business-license
fee projected to raise $438 million over two years. This levy would
be based on a business' gross receipts and its industry. The fee
would help replace a tax system that has created "a crisis every
two years," Mr. Sandoval said.
Mr. Sandoval, a former state attorney general, was elected
statewide three times, including a victory against Mr. Reid's son,
Rory, in the 2010 race for governor. He led the GOP to a sweep of
statewide races last year and won his own re-election with more
than 70% of the vote.
While he has widened his appeal, Mr. Sandoval also has taken
positions that could turn off a Republican base, including support
for legal abortion and dropping the state's court battle against
same-sex marriage. Recently, he clashed with fellow Republican
attorney general Adam Laxalt over Mr. Laxalt's decision to join a
multistate suit against President Obama's executive order on
immigration.
Mr. Sandoval's ascendancy is partly a product of Nevada's
complex, small-state politics and demographics. While Republicans
won big last year, registered Democrats outnumber them. Labor
unions are a powerful source of voter turnout for Democrats and the
rapidly growing Hispanic population is a key demographic. Last
year, the governor won the endorsement of the influential Culinary
Union Local 226, a vocal advocate of laws more favorable for
immigrants that has a sizable Latino membership.
The GOP's infrastructure is weak, particularly compared with the
formidable turnout machine Mr. Reid built for Democrats, political
experts said.
Eric Herzik, a political-science professor at the University of
Nevada, said the governor's 2014 electoral success "just scared off
any serious Democrats from challenging him. The irony of that is,
he so cleared the Democratic field at the top of the ticket that
many conservative Republicans were swept into office."
Republicans are watching Mr. Sandoval closely for signs he may
enter the Senate race. Mr. Reid's surprise retirement announcement
puts pressure on the GOP. The Senate minority leader has thrown his
support behind Catherine Cortez Masto, a prominent Latina Democrat.
Some say running against Mr. Reid would have been easier. "Until
people know what the governor is going to do, I don't know that
there are going to be a lot of candidates on the Republican side
who are going to jump in," said Mark Hutchison, the state's
Republican lieutenant governor.
For now, Mr. Sandoval is engaged in policy battles. The
governor's proposals have advanced in the state Senate while also
spurring competing budget plans--including one from the Republican
treasurer and controller. His business-fee increase could pass the
state senate as early as this week, an aide to the state senate
majority leader said. It would then move to the state assembly.
Conservatives in the assembly, meanwhile, have vowed to defeat
it. "He is a popular guy--he has got a presidential resume--but his
policies are not as popular as he thinks," said Assemblywoman
Michele Fiore (R-Las Vegas), who opposes the governor's plan.
Write to Alejandro Lazo at alejandro.lazo@wsj.com