Lawmakers May Have Found Common Ground

Nevada Legislature 2003
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Lawmakers appeared to have struck a compromise Monday night on an $811 million tax plan that could garner a two-thirds majority vote in both houses and end legislative gridlock.

Sen. Randolph Townsend, R-Reno, said that a bill had been drafted and he expected the Senate to vote on the plan.

"I think everybody here is on the same page regarding the two-thirds majority, "Townsend said. "I think there has been a level of understanding about the level of revenue we need to generate, and there is finally an agreement on the components."

Townsend said lawmakers were reviewing the bill so it could be introduced on the Senate floor and possibly the Assembly floor late Monday.

"Everyone is trying to read the bill, many are looking through the bill to make sure it was drafted correctly and that nobody tried to sneak something in or take something out," Townsend said.

The new plan involves a 2 percent payroll tax on banks. Other businesses would a pay a 0.7 percent payroll tax the first year and 0.65 percent payroll tax the second year.

The bill doesn't contain a bank franchise fee. It also does not include a statewide 1 percent tax on hotel rooms, which satisfies gambling companies. The gambling tax would increase by 0.5 percent.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, conceded that GOP efforts to block the tax bill had failed. Hettrick had backed a $805 million tax plan Monday morning to fund education and the state budget. Hettrick said he could not vote for the new plan. It was too much in the end, he said.

"It's fun to fight,"Hettrick said."It's no fun to lose."

Hettrick called his plan a major compromise. Republican holdouts had 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."

But Assembly Speaker Richard Perkins, D-Henderson, said Monday afternoon that the Democrats' final position on a tax increase plan was $811 million, and there was nothing left to discuss with Hettrick.

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

Perkins had threatened 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 banks with a 3 percent franchise tax and a 1 percent payroll tax, which holdout Assembly Republicans opposed.

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 impasse prompted Republican Gov. Kenny Guinn to ask the state's highest court to intervene.

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 to increase taxes.

Hettrick and Republican lawmakers filed a motion Monday with the Nevada Supreme Court asking the justices to reconsider their 6-1 ruling after being turned away last week by U.S. District Court judges in Nevada.

"The (state) 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."

Justices gave both parties until July 25 to file legal argument, and declined to rule on the Republicans' motion for a stay of the court's ruling.

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.