Some Assembly Republicans Backing Tax Plan

Nevada Budget Crisis
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A handful of Assembly Republicans said Monday that they're willing to back a $805 million tax plan to fund education and the state budget.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, guaranteed six Republican votes if Democrats support the plan. That means the new bill could pass with a two-thirds majority vote in the Assembly and possibly break the deadlock that has gripped the Legislature since June.

"If somebody backs out, I vote,"Hettrick told The Associated Press."We don't lie to people."

The new plan involves a 2 percent payroll tax on banks, plus a branch tax that would not affect companies with single banks typically found in rural communities.

Other businesses would a pay a 0.7 percent payroll tax the first year and 0.65 percent payroll tax the second year. The plan also involves a health care credit.

What is more important for some Republicans, Hettrick said, is the bill doesn't contain a bank franchise fee or income taxes. It also does not include a statewide 1 percent tax on hotel rooms, which satisfies gambling companies.

Hettrick called the bill a major compromise. Republican holdouts have pledged not to vote for any tax plan of more than $700 million.

"The $100 million is less important,"he said."The tax structure is more important than the amount."

Banks reluctantly have agreed to go along with the plan, Hettrick said.

"The banks are willing to pay,"he said, adding the new bill was being drafted for the Senate's afternoon session.

Assembly Speaker Richard Perkins, D-Henderson, said Monday afternoon that Democrats'final position on a tax increase plan was $811 million.

"If it moves, it goes up,"Perkins said.

Perkins is threatening to convene the Assembly and pass Senate Bill 6, which made it through the Senate on a two-thirds majority vote last month. SB6 would raise $873 million in taxes and hit the banks with a 3 percent franchise tax and a 1 percent payroll tax.

The competing plans come after a majority in the Assembly passed one bill and amended another Sunday aimed at funding the school budget and raising about $820 million in taxes.

The 26-14 vote, two short of the 28 needed for a two-thirds majority, came after holdout Republicans failed to reach a compromise with Democrats on the size of the tax increase.

The Senate convened briefly Sunday evening, but was unable to accomplish anything other than a status report.

"I am cautiously optimistic that we are very near an agreement,"said Senate Majority Leader Bill Raggio, R-Reno.

Impatient Assembly Democrats bided their time after forging ahead earlier in the day to break the impasse, which included dumping the two-thirds vote.

The Democrats said the constitutional requirement of a two-thirds vote on tax increases wasn't necessary because the bill reduced taxes. Democrats said the bill and the amended one lowered the new tax increases from $873 million to $820 million.

Republicans didn't vote for the bill because it included a modified business tax and a 3 percent bank franchise fee.

Some Republicans have said the fees will drive business out of Nevada. Business lobbyists also have put heavy pressure on Republicans to resist the fees. Democrats accuse the Republicans of"shielding"the banks.

Legislators in both parties and both houses have refused to budge over the taxes needed to balance the nearly $5 billion two-year budget they passed in their regular session.

Two special sessions since the regular session adjourned June 2 have been fruitless.

The Republicans still hope to overturn the Nevada Supreme Court's ruling that said funding education was more important than the two-thirds vote required by the state constitution.

Hettrick and Republican lawmakers filed a motion Monday with the Nevada Supreme Court asking the justices to reconsider their 6-1 ruling.

"The court's ruling has resulted in the violation of the right to due process guaranteed by the state and federal constitutions,"the motion reads."More particularly the remedy adopted by the court _ allowing a tax-increase to be voted into law without the constitutionally mandated two-thirds support of each house of the Legislature, violates the federal constitutional rights"of legislators, taxpayers and voters."

The U.S. 9th Circuit Court of Appeals in San Francisco denied a preliminary injunction late Friday that sought to block lawmakers from passing a tax plan without a two-thirds vote. But the court agreed to expedite the case.

Hettrick has said he'll appeal to the U.S. Supreme Court if necessary.