Negotiators Announce Agreement on Final Nevada Budget

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Nevada lawmakers and Gov. Jim Gibbons announced a compromise Tuesday on a $7 billion state budget for the coming two fiscal years that, while a record amount, provides forno new taxes.

The deal on the budget, which is up about 15 percent over the current two-year budget, also clears the way for possible adjournment of the 2007 Legislature by next Monday's deadline without the need for a special session.

Gibbons, Senate Majority Leader Bill Raggio, Assembly Speaker Barbara Buckley and other leaders disclosed the agreement following
rush-job revisions to a budget plan that Senate and Assembly negotiators had accepted Monday but Gibbons had later rejected.

"With this agreement, we are very likely able to be able to conclude the legislative process on time as required by the statutes," said the Republican governor, who ran a no-new-taxes election campaign in 2006.

Gibbons had refused to sign off on a slight raise in a business tax that would have generated about $4.5 million next year. Assembly negotiators wanted that for education programs, but dropped the bid for a tax source as senators agreed to free up the money from other budget sources.

Buckley, D-Las Vegas, wanted more funding to expand all-day kindergarten in Nevada schools and came away with about $15 million
for that. Gibbons gets nearly $10 million for his education
"empowerment" plan which gives public schools more control over
programs at the local level.

"It hasn't been an easy process," said Raggio, R-Reno, adding that in the end "everybody gave a little."

Buckley called the agreement a "major victory" for education, both for K-12 schools and higher education. She added that that the various K-12 funding additions total $63 million.

The governor's insistence on leaving the business tax rate at 0.63 percent rather than seeing it inch up to 0.64 percent prompted Senate Minority Leader Dina Titus, D-Las Vegas, to call Gibbons a hypocrite for setting conditions on the budget agreement.

Titus, noticeably absent from the budget agreement news conference, said Gibbons led the effort to get 2006 voter approval of an "Education First" initiative that mandated K-12 school funding be completed before other aspects of the budget.

Gibbons has threatened to veto the budget bill if the slight increase in taxes - less than half of 1 percent of the entire budget - was included in it.

Gibbons also got $1.7 million for a Nevada National Guard "Youth Challenge" program that focuses on troubled youths, but didn't get funding for an anti-terrorism intelligence-sharing operation in Carson City. Two such "fusion centers" already are being planned for Las Vegas and Reno.

The budget proposal also includes numerous fee hikes, mainly affecting interest groups willing to accept them.

Highway funding isn't part of the plan, and will be handled in a separate bill - one that Gibbons has threatened to veto if it contains new taxes. That's despite a tentative offer from the trucking industry to sign off on a 3-cent-per-gallon increase in diesel fuel taxes to help overcome a huge shortfall in highway construction funds.

When the $7 billion in general fund dollars are added to federal funds and other revenue sources, the total spending for ongoing government programs hits about $18 billion. That overall figure is up 15 percent over the current two-year budget cycle.

Just over half of all general fund dollars are for education. Another 29-30 percent goes to human services, including Medicaid and mental health services while about 10 percent would be used for public safety, including the state's prison system.

The balance of the spending in the governor's tentative budget would go to commerce and industry-related agencies, constitutional offices and other special-service government operations.

About a third of the projected revenue that would support the spending comes from sales and use taxes, and another 28 percent comes from fees and taxes paid mainly by casinos. The balance comes from various insurance and business levies, real estate transfer taxes, secretary of state fees and from taxes on liquor and cigarettes

(Copyright 2007 by The Associated Press. All Rights Reserved.)