Nevada's Special Session on Taxes Resumes

Nevada Legislature 2003
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A new Senate tax plan advanced Wednesday to the Senate floor, but then failed to get the two-thirds majority support needed to send it to the state Assembly which has a rival plan for solving the state's budget crisis.

A tentative vote on SB5 showed it with 15 supporters, one over the necessary 14 votes in the 21-seat Senate. But after Senate Minority Leader Dina Titus, D-Las Vegas, questioned some of the wording in the bill, it lost two backers and failed by one vote.

The vote-switchers were Sens. Bob Coffin and Valerie Wiener, both Las Vegas Democrats.

A frustrated Senate Majority Leader Bill Raggio, R-Reno, immediately concluded the floor session and told senators to return on Thursday.

The latest development bogs down a special legislative session already in its ninth day. It was convened by GOP Gov. Kenny Guinn after the regular, 120-day session shut down on June 2 without passing a tax plan needed to balance the state's new $5 billion budget for the coming two fiscal years.

Even if the Senate's nearly $860 million tax plan passes Thursday in the Republican-run upper house, it faces an uncertain future in the Assembly because it lacks a bank franchise fee and a broad-based franchise fee on businesses that the Assembly Democrats had proposed.

Among the main elements of the new Senate plan are higher cigarette and liquor taxes, a real estate transfer tax, a one-percent room tax, increased casino levies, live entertainment tax, and a payroll tax set at 1.1-percent of capped wages.

The plan, which also would phase out a business license tax, would generate just over $859 million over the coming two fiscal years.

The Assembly Democrats' plan also includes a payroll tax that would eventually replace a business license tax, a franchise fee based on the size of a business, a three-percent bank franchise fee and a live entertainment tax. It drops the one-percent room tax increase.

Advocates of both plans say they'd generate enough revenue over the coming two fiscal years to fill a budget hole ranging from $860 million to nearly $870 million.

"This pays the bills for the next two years," Assembly Speaker Richard Perkins, D-Henderson, said in discussing the Assembly plan. "From my perspective, it does get us there. I'm hoping the senators are interested in working with it to get it done."

"The longer we go, the harder it is to have all our members here, especially in the Assembly," Perkins said, adding people have to return to regular jobs and their families.

Some Republican lawmakers have insisted that Guinn reopen the state budget that he's already signed into law, so that cuts can be made and the tax need won't be so high. They have suggested there's room for staff cuts and other reductions.

But Guinn's deputy chief of staff, Mike Hillerby, said the pro-tax governor won't reopen the budget. Referring to the claims that there's room for more budget reductions, he added, "The spinning of numbers is amazing."

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, has said another possibility would be to limit future spending, beyond normal growth, unless there's support from two-thirds of all legislators.

That would put spending on the same footing as taxes, which can't be raised without a two-thirds vote in the Senate and Assembly.

Hettrick, Assemblyman Bob Beers, R-Las Vegas, and other tax foes have called repeatedly for Guinn to reopen the budget.

In ordering the special session, Guinn said he was open to a wide range of new or increased taxes as long as they're broad-based. It's the third special session called in two years by the pro-tax governor.

The governor also said that while there's adequate funding for state government operations once the new fiscal year opens on July 1, the state's k-12 schools and school administration offices might have to shut down because education funding has been held up by the tax impasse.

(Copyright 2003 by The Associated Press. All Rights Reserved.)