Federal Court Blocks Assembly Tax Plan

Nevada Budget Crisis
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Nevada lawmakers were blocked temporarily Monday by a federal court order preventing them from moving ahead with a record $800 million-plus tax plan to balance Nevada's budget and fund the state's public schools.

The order by Chief U.S. District Judge Phil Pro restrained legislators from"giving effect"to the Sunday vote in the Assembly that sent the tax plan to the state Senate on a simple majority vote, rather than a constitutionally required two-thirds vote.

All eight of Nevada's federal district judges will hold a hearing Wednesday on a complaint filed by tax plan foes. They'll be in courtrooms in Las Vegas and Reno, linked by an audio hookup.

The order was read to state senators just after a committee made up of all 21 senators agreed not to accept the Assembly plan. The Senate passed a different tax plan earlier this month by a two-thirds majority.

Fifteen Assembly Republicans, headed by Minority Leader Lynn Hettrick, R-Gardnerville, and nine GOP state senators joined in the petition seeking a restraining order from the federal court.

Also signing on were representatives of various business groups that have opposed the tax plan _ which focuses heavily on businesses to help balance the state's record $5 billion budget for the two-year cycle that opened July 1.

The complaint, alleging a violation of civil and constitutional rights, names legislative leaders and Republican Gov. Kenny Guinn, who favors a major tax increase similar to measure that won approval Sunday on a 26-16 Assembly vote.

The document was signed by attorney Jeffrey Dickerson, representing the Claremont Institute Center for Constitutional Jurisprudence. Groups that joined in the action included the Retail Association of Nevada, Nevadans for Tax Restraint, Nevada Manufacturers Association and Nevada Concerned Citizens.

A second complaint was filed by Robert Hall in U.S. District Court, Las Vegas, naming the six state Supreme Court justices who held in a historic ruling last week that a tax plan could be approved on a simple majority vote because of the constitutional requirement to pay for public education. School officials have said they will run out of money next month without the tax plan.

Hall alleged the justices violated the separation of powers doctrine and violated Nevadans'constitutional due process rights.

"We believe we have standing (in federal court),"Hettrick said."There are grounds to file for an injunction to hold this to see if the Supreme Court's decision was constitutional or legal."

"The constitution says what it says. It requires a two-thirds'vote on taxes,"Hettrick said.

"The Assembly very clearly violated the state constitution and the U.S. Constitution,"added Assemblyman Bob Beers, R-Las Vegas, another leader in the fight against the tax plan.

Tax proposals in the Senate and Assembly target businesses, liquor, cigarettes, casinos and live entertainment as their main revenue sources. However, the Democrat-dominated Assembly wants a gross receipts tax on business while the Republican-controlled Senate favors a tax based on payroll that business would pay.

The Legislature passed a budget but has been unable to OK a tax plan to fund it during its 120-day regular session and two special legislative sessions.

Guinn petitioned the state Supreme Court to intercede when the Legislature failed to meet a July 1 constitutional deadline to pass a balanced budget and fund public schools.