Las Vegas Sun

October 1, 2014

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Budget battle goes before Nevada Supreme Court

CARSON CITY -- Gov. Kenny Guinn and Attorney General Brian Sandoval filed a lawsuit in the Nevada Supreme Court just after midnight today to force the Legislature to balance the state budget and fund education, an unprecedented end to a dramatic day.

Sandoval carried the lawsuit, which seeks as a writ of mandamus, to the Supreme Court from his offices a half-block away. A court clerk accepted the docuents at 12:01 this morning, moments after Sandoval also served the legislative counsel with the same suit.

The suit asks the court to set an unspecified deadline for the Legislature to produce the balanced budget and school appropriations. It says there are no other legal options.

"I am saddened to have to embark on this course of action," Guinn said in a written statement. "As governor, I have an obligation to uphold Nevada's Constitution. ... I have taken this action in hopes of compelling the Legislature to meet its constitutional responsibility to fund education for the children of this state."

Sandoval said the unconstitutional failure of the Legislature to pass a balanced budget and fully fund "the common schools" forced the executive branch to act.

"This is a place where the state and the Legislature has never gone before," he noted.

"The circumstances in this matter reveal urgency and strong necessity to act, and there is no plain, speedy or adequate remedy at law to compel the Legislature to perform its constitutional duty," the suit says.

Sandoval said he did not want to speculate on what the governor or the court would do if the legislative impasse continues despite the court's intervention, but the suit asks the court to allow "additional remedies in the event the Legislature fails to act as required by this court."

Until that issue arises, Sandoval said he would not say what redress might be needed. The court could, however, in extraordinary situations impose its own financial solution on the state, a solution that could resemble other tax plans, tax increases, or some other path.

"We will cross that bridge when we come to it," Sandoval said.

The suit names all the members of the Senate and Assembly individually. Sandoval noted that the court could hold the members in contempt, or throw them in jail for 90 days, for failure to balance the budget and fund the schools.

"We are not seeking that relief," he noted. "That is a remedy that the court could impose."

He said the governor is not asking the court to act by a specified time, but in the face of a constitutional crisis, "We think the Nevada Supreme Court should act as hastily as it can."

Assemblyman Ron Knecht, R-Reno, who is one of 15 Republican holdouts who have blocked tax increases in the Assembly, stood outside the Supreme Court as the suit was submitted. He said the holdouts would not be cowed by threats of jail or court order to vote for the increases.

"I would expect there is a serious possibility that we will file a counter mandamus action to force the governor to reopen the budget, and also seek continuing funding authority," Knecht said. The holdouts have lobbied to open the budget to make cuts, allowing for a balanced budget with smaller -- or no -- tax increases on the businesses and gaming interests targeted in the existing plans.

The seven Supreme Court justices are in Las Vegas and are expected to read the suit this morning. Observers and participants in the process said they do not know how long it will take the court to respond.

Assembly Speaker Richard Perkins, D-Henderson, said Monday evening that he expects to have at least several days before the Legislature is forced to respond. The Senate side, however, was to meet again this morning to pass a resolution acknowledging the Legislature's constitutional duties -- duties that the branch of government did not perform.

The Assembly, in a unanimous voice vote, passed a similar resolution Monday night in its last official action before the adjourning. The resolution acknowledges that the Legislature "has a constitutional duty to provide for the support and maintenance of schools in this state and determine appropriate amount of appropriations for their support and maintenance."

Before voting on the resolution, Assemblywoman Sharron Angle, R-Reno, took a slap at the Assembly leadership. Angle, one of the 15 holdouts who have prevented ,the Legislature from passing the proposed record tax increases, said the Assembly should have passed the school funding separately from the tax increases.

"We cannot pass an education budget without the revenue to support it," Assembly Majority Leader Barbara Buckley, D-Las Vegas, said moments later, after the resolution passed. "That would be like writing a check without having the money in your account."

Perkins told the Assembly that he expects to be ordered back to work by the Supreme Court, although the details of that order and when it will occur aren't clear. He also recited his oath of office, right hand in the air, stressing the promise to uphold the constitutions of the United States and Nevada.

"Nowhere does this oath say, 'Except when I disagree,' " Perkins said, an obvious reference to the Republican holdouts who refuse to vote for a tax package that on the one hand, seems to be constitutionally mandated, and on the other, that they profoundly disagree with.

"We have failed to willfully and faithfully execute the job we were sworn to perform," Perkins said. "How can we not do our duty as legislators?

"How can we expect our citizens to follow the law when we as lawmakers do not?"

Most of the discussions occurred behind closed doors Monday as Republicans and Democrats caucused and searched for a solution to the revenue impasse. Despite reports over the last week that progress was being made on a plan to raise the additional $860 million needed to balance the budget, both sides appeared entrenched by the end of the day.

Hours before the constitutionally mandated deadline, the Republican holdouts and the Democrats held dueling press conferences.

Assembly Minority Leader Lynn Hettrick, of Gardnerville, said the Republicans offered $704 million in new taxes and no franchise fees, another name for the the proposed gross receipts tax on companies pulling in more than $450,000 annually.

Hettrick insisted that the failure to pass a balanced budget and funding for education is not the fault of the Assembly Republican holdouts.

"We are not stonewalling. We are not delaying the process," he said. "We have an offer on the table."

But that offer was the same one that the Republican holdouts have stuck to throughout the session, Democrats said.

"This is not a compromise. This is no movement at all," said Assemblywoman Vonne Chowning, D-Las Vegas. "It's a shame."

"We compromised every step of the way," Perkins said. Among the concessions were agreements to add a payroll tax, a provision despised by many Democrats; audits of public schools and higher education programs; and a cap on new tax increases down the road.

He said the Assembly Democrats had bargained the tax increase down to $783 million in the $4.8 billion, two-year budget on Sunday night. Perkins added that he and other Democrats thought a deal had been struck.

But that deal, if it ever was a deal, quickly unraveled Monday as the Republican holdouts came back with their original $704 million increase, no franchise taxes and nothing else.

The strain apparently took its toll on Assemblyman Tom Collins, D-North Las Vegas, Monday afternoon. He complained of chest pains while sitting in the Assembly Chambers. Sitting next to Collins was Dr. Joe Hardy, R-Boulder City, one of four Republicans to support Collins and the Democrats in the Assembly. On this day, Hardy also served as Collins' physician for a few minutes.

At 3 p.m., Collins was wheeled out on a stretcher by Carson City Fire Department paramedics. He was taken to Carson Tahoe Hospital and did not return to the Legislative Building, although Assembly leadership reported that Collins did not appear to be in danger.

Monday night, Collins said from the Carson Tahoe Hospital that he was feeling better and hoped to be able to leave the hospital today.

Meanwhile, Senators, who passed a tax plan and a school funding bill last week, remained angry that the Assembly could not pass sister legislation.

Sen. Ray Rawson, R-Las Vegas said the "public has a right to be very upset with us" after the regular session and two special sessions in which a tax plan could not be approved.

The first special session cost taxpayers about $250,000. The total cost of the second special session was similar -- approximately $40,000 per day for the six-day session, according to the Legislature Counsel Bureau.

Senate Majority Leader Bill Raggio, R-Reno, lamented that after all the time and money had been spent, the state's fate now rests with the courts. He warned that litigation "takes strange turns and usually nobody wins."

The majority leader, a Reno attorney, said the court case "could get ugly and could get protracted."

It could get even more complicated if the Clark County School District and the Clark County Education Association officials follow through on threats to sue the state over the failure to fund the school districts.

Raggio said he didn't believe the voters, when they approved the constitutional amendment for a two-thirds vote on a tax plan, intended "a minority to say my way or no way," referring to the GOP block in the Assembly.

Sen. Mark Amodei, R-Carson City, countered that taxpayers knew what they were doing when they approved the two-thirds vote requirement -- they wanted protection against tax increases.

Sen. Mike Schneider, D-Las Vegas, said that the provision had been twisted into a "tyranny of the minority," where 15 Republicans are calling for more cuts in the budget before they will vote for a tax increase. Twenty-eight votes are needed in the 42-member Assembly to pass any tax.

Schneider also complained that the GOP Assembly group won't put anything in writing as to what they want to reduce in the budget.

Senate Minority Leader Dina Titus, D-Las Vegas, complained the power of the Legislature is being "whittled away." The regular session is limited to 120 days, there are term limits and a super majority is needed to pass any tax, she said. Now the issue ends up in court.

"If the court imposes a tax plan, that is setting a terrible precedent," she said.

Sen. Joe Neal, D-North Las Vegas, said he doesn't believe the Supreme Court can tell the Legislature how to vote on these particular taxes.

"That would be a violation of the Constitution," he said.

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