Assembly Reworking Senate Tax Plan

Nevada Budget Crisis
By  | 

The Nevada Assembly reworked an $873 million Senate tax boost plan late Thursday, voting for a batch of amendments that cut the huge increase slightly to $864 million, still a record amount.

The Assembly action, in a series of voice votes, revises SB6 which won approval earlier in the day on a 15-5 Senate vote as the lawmakers struggled in their second special session since June 2 to find a way to balance a $5 billion state budget.

The Senate wanted a 1 percent payroll tax and a bank franchise levy, higher room taxes and casino levies, and increased"sin"taxes on cigarettes and liquor. Their plan also imposed a cap on how much the state budget can grow in the future.

The Assembly cut the payroll tax to 0.6 percent, kept the bank franchise levy and added a franchise tax on other businesses, revised the"sin"taxes and scrapped the room tax and the cap on budget growth.

The Assembly and Senate agreed on a 0.5 percent tax increase on Nevada casinos and a 10 percent live entertainment tax, and were close on a real estate transfer tax.

Legislative leaders said revenues generated in either proposal are needed to properly fund government services and public schools for the coming two fiscal years.

A formal Assembly vote on the revised SB6 was expected Friday. Differences between the two plans will then have to be worked out by Senate and Assembly conferees _ and leaders said a compromise is needed before the start of the fiscal New Year on Tuesday.

"We're pretty far from a final product,"said Assembly Speaker Richard Perkins, D-Henderson, as the Assembly made major _ but not unexpected _ changes to the Senate proposal.

In the 21-member Senate, the 15-5 vote for its tax plan was one over the minimum 14 needed. Any tax measures require a two-thirds'majority vote.

"No"votes were cast by Sens. Maggie Carlton and Valerie Wiener, both Las Vegas Democrats; Barbara Cegavske and Sandra Tiffany, Las Vegas Republicans; and Maurice Washington, R-Sparks. Sen. Ann O'Connell, R-Las Vegas, abstained.

During the upper house debate, Senate Majority Leader Bill Raggio, R-Reno, said he resented"misinformation that is constantly being thrown out to the public"by anti-tax hard-liners. He said anyone who thinks no tax hikes are needed are"living off this planet."

Senate Minority Leader Dina Titus, D-Las Vegas, voted for the proposal but said she's counting on amendments in the Democrat-controlled Assembly to make it a better bill.

Titus said she favored a broad-based tax, such as a levy on business receipts, rather than the payroll levy, and also opposed the cap on budget growth, which could keep Nevada at the bottom of numerous quality-of-life indexes.

"We're a prosperous state,"Titus said."We should not operate like a Third World country."

Tiffany warned that lawmakers are"going to hear from your constituents"once the full impact of the record tax increase is felt. She also said there hadn't been"a real genuine discussion"of the proposal.

Republican Gov. Kenny Guinn said he didn't want to get involved in the legislative debate because"the ball is in their court"at this point _ but he's pleased to see the lawmakers moving ahead.

Guinn, a tax proponent, also said he could sign the Senate measure although he expected changes in the Assembly _ such as the franchise fee on businesses and not just banks. Such revisions would result in a broader and better bill, he added.

The action followed the opening Wednesday of the second special session called by Guinn since the lawmakers adjourned their regular, 120-day session on June 2 without providing adequate tax revenue to balance the state budget.

Also Wednesday, hundreds of people showed up to participate in pro- and anti-tax rallies in front of the Legislature, and to listen to the lawmakers'arguments.

Tax proponents included Assembly Majority Leader Barbara Buckley, D-Las Vegas, who said the lawmakers'goal should be a broad-based tax package that ensures"big business and gaming should pay."

Other advocates included Assemblywoman Chris Giunchigliani, D-Las Vegas, who told tax foes to"go home"if they're unwilling to negotiate; and Assembly Ways and Means Chairman Morse Arberry, D-Las Vegas, who said lawmakers have known for years that a major tax increase would be needed because of Nevada's fastest-in-the-nation growth.

Arberry also said some lawmakers may fear voter reprisals in the 2004 elections but added,"So you might not be here? So what. Bite the bullet."

Assemblyman Ron Knecht, R-Carson City, defended Republicans in the Assembly who have balked at the massive tax increase, and repeated his argument that"the tax-and-spend crowd wants to turn Nevada into East California."

Assemblyman Bob Beers, R-Las Vegas, said the tax increase would amount to the largest private-to-public transfer of money"since the Bolshevik Revolution."