Tax Proposals Loses Again By One Vote

Nevada Budget Crisis
By  | 

An $864 million tax increase needed to balance Nevada's record $5 billion budget failed by one vote to win approval Saturday in the state Assembly - just as it did late Friday.

In contrast to the extensive debate that preceded the first vote, there was no discussion as the Assembly again voted 27-15 for the plan, which focuses on business-related levies and higher"sin"taxes on liquor and cigarettes.

Both votes on SB6 were one short of the 28 votes that represent the mandatory two-thirds'majority needed for any tax measure. All 23 Democrats and four Republicans favored the plan, while 15 other Republicans are blocking its approval.

Despite the deadlock, Assembly Speaker Richard Perkins, D-Henderson, said he thinks the proponents and opponents of the plan are close to reaching a compromise. He scheduled another floor session Sunday to see whether the plan can get one more vote.

"We will stay here right up to the last possible moment to get this accomplished,"Perkins said, adding that he's unwilling to declare an impasse and tell Republican Gov. Kenny Guinn _ a tax proponent _ that there's no point in continuing the special legislative session.

The session is the second called by the governor following the June 2 adjournment of the regular, 120-day legislative session.

Guinn is considering a petition to the Nevada Supreme Court to compel lawmakers to act. The petition would argue that the legislators have a constitutional obligation to adequately fund the state's budget for the next two years.

That budget already has been approved, and lawmakers have been told the deadline for them to act on a funding plan is midnight Monday _ just before the start of the next fiscal year on Tuesday.

State Attorney General Brian Sandoval warned the lawmakers they'd be in dereliction of their duties if they don't provide enough money for public schools and the state budget.

During Friday's debate on the measure, Assembly Majority Leader Barbara Buckley, D-Las Vegas, said the tax opponents shouldn't"shield some businesses from finally paying one of the lowest taxes in the country"

"Step forward and do the right thing,"said Buckley, adding,"Otherwise we're in court on Tuesday."

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, who led the fight against the tax plan, said he resented the suggestion the tax opponents were"protecting corporate America."

"We can say big business will pay (if the plan is passed) but in the end the reality is that consumers pay all the taxes,"he said.

Hettrick also said there's a good chance that a compromise won't be reached by the Monday night deadline. He also said the holdout Republicans won't be intimidated into passing a record tax increase.

The Assembly's two votes were on a revised version of an $873 million tax boost plan that won approval on a 15-5 vote Thursday in the Senate.

The Assembly's amendments reduced the tax increase to $864 million, still enough to balance the record $5 billion budget.

The Senate's tax plan includes 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 imposes 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.

During upper house debate on Thursday, Raggio said he resented"misinformation that is constantly being thrown out to the public"by the 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."

Opponents included Sen. Sandra Tiffany, R-Las Vegas, who 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.