Guinn Going to Court Over Tax Stalemate

Governor Kenny Guinn
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Efforts by Nevada lawmakers to compromise on a record tax plan fell apart late Monday, and Gov. Kenny Guinn moved ahead with a petition to the state Supreme Court aimed at forcing the legislators to act.

The breakdown prompted Assembly Speaker Richard Perkins, D-Henderson, to say it's "shameful" that lawmakers failed to meet a constitutional duty to properly fund Nevada's $5 billion budget for the coming two fiscal years.

Perkins said Assembly Republicans negotiated in bad faith, never making clear what terms they'd accept. He adds their bottom line on a tax package was "my way or the highway."

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, countered that the Republicans had a reasonable tax and budget compromise. But he said Democrats wanted taxes would" damage Nevada's economy" because they'd tap business so heavily.

Hettrick also rejected Perkins' contention that the tax hardliners didn't live up to their oaths of office, which include a vow to uphold the Nevada Constitution. "He can make all the comments he wants, "Hettrick said, adding, "You have a right to vote your conscience."

Hettrick's proposal was $704 million in new taxes over two years, compared with proposals backed by Republican Gov. Guinn, the Republican-controlled state Senate and the Democratic-run Assembly that are at least $150 million higher.

The K-12 school funding had been delayed because of the stalemate over higher taxes needed to support the schools. Lawmakers are now in their second special session on taxes since June 2, when their regular 120-day session ended.

While school funding is up in the air, there's enough revenue from the state's current tax structure for general government operations.

Guinn's court petition, to be filed just after midnight Monday, asks the state's highest court to intervene because legislators failed to approve adequate public school funding by Tuesday, the start of the next fiscal year. The governor worked with Attorney General Brian Sandoval on the petition.

Senate Majority Leader Bill Raggio, R-Reno, and Senate Minority Leader Dina Titus, D-Las Vegas, both urged the Assembly on Monday to end its impasse, saying court intervention would be a dangerous precedent.

A court petition to force legislative action "ought to be the last resort," said Raggio, adding, "Litigation takes strange turns and usually nobody wins."

Raggio, insisting he wasn't "pointing figures," said Nevada voters may have approved a two-thirds' majority vote on taxes _ but didn't want "a minority to be able to say, 'It's our way or no way.'"

Titus said Nevada's two-thirds' majority requirement on taxes, approved in 1991,"really created the tyranny of the minority. "She added court intervention would continue a weakening of the Legislature's role in state government, and that would be "such a shame ... because we really do represent the people."

Assembly Democrats pushed an $864 million tax increase that includes major levies on business and higher "sin" taxes on cigarettes and liquor. Hettrick said the tax total could be lowered, partly by using a "trigger" mechanism to let legislators release welfare funds during the coming two-year budget cycle only if clearly needed.

He was adamantly opposed to a business franchise tax that was in the plan _ a tax package that in two earlier votes had failed to win Assembly approval by just one vote.

The Assembly's two failed votes were on a revised version of an $873 million tax boost plan that won approval on a 15-5 vote last week in the Senate. The Assembly's amendments reduced the tax increase to $864 million.

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.