Tuesday, July 8, 2003 | 11:31 a.m.
CARSON CITY -- Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said today that legislative leaders may be close to settling an impasse over the size of the budget.
But Assembly Speaker Richard Perkins, D-Henderson, says they are not close to solving possible reductions in the $4.9 billion budget.
The two are scheduled to meet later today in another attempt to resolve some of the issues.
The Legislature is deadlocked over a plan to raise taxes and pass an education budget. The Assembly has become the focal point of the talks as Assembly Republicans have blocked a plan to raise taxes.
The budget has been a sticking point, as Assembly Republicans have wanted the budget cut and have asked for the parts of the budget that have been passed to be reopened.
Hettrick says he has ideas on how to reduce government spending and thus the need for new taxes.
Hettrick suggested Republicans and Democrats may only be $23 million apart in proposed reductions to the budget.
Republicans want to cut about $103 million from the budget. Hettrick said he believes there are Republican votes if the size of the tax increase is whittled back from $863 million to $760 million.
Last week Perkins, in negotiations with Republicans, said he made a $783 million offer that was rejected. But he said today that the $783 million figure is "not feasible." He said he backs the $803 million arrived at in negotiations Saturday.
Gov. Kenny Guinn said today that if the lawmakers in both houses agree to the reductions, he will send over a proclamation to the Legislature to allow them to make those changes in the budget.
But he's not going to allow them to reopen the full budget.
Hettrick said "everything is on the table" on possible budget reductions. Among them is delaying the 2 percent pay raise given state workers, schoolteachers and university faculty to start in July 2004.
"We're not cutting the teachers pay," he said, adding there are some options including a postponement of the start of the raises. "We're looking at a chunk of money."
The pay raise would cost the state more than $50 million in the next fiscal year. If it were delayed six months, that would save $25 million.
Perkins said he understood that Hettrick wanted to cut out all of the pay increases in the second year. He said that would not be wise since the state is trying to keep teachers and the 2 percent to teachers, state workers and university faculty is "pretty minimal."
Another item being considered is cutting or eliminating the $30 million to be put in the "rainy day" fund to handle emergencies. Hettrick asked why should taxes be increased with part of the money being put in a one-time fund.
There is an item in the Human Resources budget that is going up 60 percent, said Hettrick who declined to identify the program. He said that might be reduced to an increase of 30 percent, since the population growth is only 6 percent.
He has said previously that the state may hold off an extra payment of the state Public Employees Retirement Fund of $14 million a year and catch up in 2005. But delaying the payment would mean the state would have to pay a bigger increase in future years.
While it saves money now, it would cost the state a lot more in the future, critics of the proposal say.
Over the weekend negotiators agreed to a $60 million cut to $803 million in new taxes. But Hettrick's Republican caucus rejected that proposal, saying it was too high."We can't go there," he said.
Some Republicans said they could go for a $704 million increase in taxes. But apparently there has been an upward movement in support to $760 million.
"I believe there are (GOP) votes for under $760 million and no income tax," he said, referring to a plan that would tax a business' gross receipts.
Besides the budget, there is still the sticking point of what taxes to increase.
Assembly Democrats want a broad based business tax, such as a gross receipts or net profits tax. Republicans oppose that, instead favoring the payroll tax.
Perkins said he doesn't understand why the GOP is resisting raising taxes for big business, such as casinos and financial institutions.
Republicans, in their brief filed Monday with the Nevada Supreme Court, are asking the court to order Guinn to allow the reopening of all of the budget, so cuts can be made that would reduce the needed taxes.
While the tax plan is being debated, the Republicans asked the court to permit the Legislature to adopt a continuing appropriation to allow the school districts to continue to receive money while negotiations are underway.
Guinn said today he had proposed earlier that the Legislature, during its special session, allocate some temporary money to the schools so they won't be strapped for cash. But the Legislature hasn't done that, he said.
Republicans said the problem of the impasse is due in part to Guinn who has not permitted cuts to be made in the part of the budget that has already been approved. That part of the budget funds state government.
Guinn said today that the Republican brief is the first time anybody has asked him to reopen the full budget. He said he has told them time and again that if they send over a list of reductions, agreed upon by both houses, he would put those on the agenda of the special session so they could be acted upon.
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