High Court Conducts Historic Review of Taxes

Nevada Budget Crisis
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A historic petition from Republican Gov. Kenny Guinn to force Nevada lawmakers to raise taxes drew more than a dozen formal responses from lawyers for wide-ranging interests by a 7 p.m. Monday deadline set by the state Supreme Court.

As the high court reviewed Guinn's petition and the other documents, with an eye toward a quick decision, negotiations among key lawmakers continued in efforts to resolve the tax impasse. But hard feelings as a result of the latest failed talks made negotiations difficult.

"We've offered compromise after compromise after compromise,"said Assembly Speaker Richard Perkins, D-Henderson, adding that legislative leaders who support the tax increases to balance a record $5 billion state budget won't give up.

But Perkins said he'd like to deal with someone other than Assembly Minority Leader Lynn Hettrick, and Assemblymen John Marvel and Tom Grady, the three rural-area Republicans involved in a marathon discussion Saturday that produced what many thought was an acceptable compromise.

"We're going to reach out, but not to those who were in the room Saturday,"Perkins said after the deal was rejected and planned Monday legislative voting was cancelled."Hopefully, we can find someone who will deal with us in better faith."

Hettrick, R-Gardnerville, countered that he and the 14 other Assembly members who have blocked repeated efforts to settle the tax impasse"have a conscience and are standing up for what they believe in."

"It is not about getting re-elected despite what everybody thinks,"Hettrick said, adding that his group remains adamantly opposed to new business levies that would amount to income taxes.

Businesses would bear the brunt of any of the various tax plans that have been debated since the 2003 session opened in early February. The session ended June 2 without a revenue plan, and two special sessions since then haven't produced an agreement on the levies needed to balance the two-year budget.

The latest proposal, from Saturday's negotiating session, called for $803 million in new revenues. Main sources of revenue would include a 2.5 percent net profits tax on business, and an employer-paid payroll tax of 0.7 percent on the first $21,500 of wages per employee.

The main tax on casinos, now at 6.25 percent, would increase to 6.75 percent. There's also a 3 percent tax on the profits of banks, and big increases in taxes on cigarettes and liquor.

Also, the plan would set a 0.26 percent tax on real estate sales and a 10 percent tax on live entertainment.

The plan doesn't call for higher property or sales levies, or for taxes on services or amusements such as movies and video rentals. Proponents of the plan said the goal was to avoid direct levies on consumers as much as possible and attempt to get a broad-based revenue source to ease the state's dependence on casino and sales taxes.

Guinn press secretary Greg Bortolin said the delay in approving a tax plan to balance the budget"is putting our school children in jeopardy of not getting a quality education."While most of the budget has been approved, the K-12 funding measure was held up by the tax impasse.

Bortolin declined to criticize Hettrick, other than to say the governor still hasn't seen a list of possible budget cuts that Hettrick had developed.

Senate Majority Leader Bill Raggio, R-Reno, also avoided criticism of Hettrick, and said he wouldn't go around him to try to get others in his Assembly GOP caucus to switch their votes.

But Raggio said legislators should"get off any rigid position,"adding that it would be unfortunate if some of the Assembly Republicans are carrying grudges because of past legislative decisions _ like a compromise reapportionment plan two years ago. Marvel was a bitter critic of that plan.

Raggio also said that if negotiators can finally achieve a compromise, the full Legislature will be convened"any time of the day or night to get this done."