Perkins says final tax plan ‘in place’

Monday, July 21, 2003 | 11:17 a.m.

CARSON CITY -- Assembly Speaker Richard Perkins, D-Henderson, said this morning a compromise has been reached on the bank tax that is the only major obstacle remaining to the Nevada Legislature's alleviation of the crisis facing the state's public schools.

"The plan is in place and now we're counting noses" to get a two-thirds vote, he said.

The plan calls for banks to pay a 2 percent on their gross payroll, minus health care insurance costs. And it would impose a fee on each branch bank.

"This protects our community banks" while still requiring larger institutions to contribute their fair share to the state's coffers, Perkins said.

The bank tax is part of a plan would raise $811 million in increased taxes.

"This could be our last day," said Sen. Ray Rawson, R-Las Vegas, assistant majority leader. "We're all gearing towards finally finishing."

Leaders from both houses conducted closed-door negotiations all day Sunday in an attempt to reach a compromise to end the stalemate that has deadlocked a 120-day regular session and two special sessions.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said that regardless of a compromise that her party finds in its best interests, Assembly Democratic leaders were expected to put an end to the special session during a 4 p.m. floor session today.

The Assembly still has Senate Bill 6 -- a measure that passed both houses in various forms, but has not been approved because of the differences in the Assembly and Senate versions.

The Senate was expected to meet at noon today to consider Senate Bill 5 -- a compromise plan the Assembly passed early Sunday.

Buckley said that while neither bill contains the type of plan the Democrats want, her party is willing to give "just to solve the crisis."

"I think at this point, the most important thing is the schools," Buckley said. "The teachers are going to be laid off, the openings are going to be delayed and we've got to get on with the state's business."

Now, she said, it's on to what she hopes is the last day of a very long legislative year.

"We're all working toward this being the last day," Buckley said.

Buckley and Assemblywoman Sheila Leslie, D-Reno, said there is also an attempt to impose a fee on each branch bank.

Assembly Democrats favored a 3 percent tax on the net profits of banks and other financial institutions. But that faced stiff opposition in the Republican-controlled Senate.

Senate Minority Leader Dina Titus, D-Las Vegas, said the new proposed compromise lets the banks off the hook.

"I won't vote for it," Titus said. She said she did not know if there was a two-thirds vote for the plan.

Both sides have been trying to work on a solution that will gather a two-thirds vote in favor of the new plan, despite a ruling from the Nevada Supreme Court that only a majority vote was necessary on a tax plan that would fund the public schools.

Schools districts in the state are going to run out of money by Aug. 15 and have encountered difficulty in hiring new teachers because of the uncertainty of finances.

Nye County has delayed opening of school for two weeks; Washoe County is using substitute teachers in at least 18 classrooms; and Storey County closed a summer school program for special education students about halfway through because of the financial crisis.

Sen. Dennis Nolan, R-Las Vegas, who has been working between the various caucus, said there is a difference of only $6 million in the tax plans.

Early Sunday morning, Assembly Democrats passed a plan calling for a tax increase of $829 million. Nolan said they now stand at $811 and the Republican Assembly has come up from $704 million to $805 million.

"It's like pulling teeth to get the Assembly Republicans to $805 million," Nolan said.

The lawmakers have agreed to scrap $30 million that was to go into the state's "rainy day" fund and to eliminate $5 million of the $20 million that was set aside for the Nevada Department of Taxation to use in implementing the new tax plan.

Republicans are suggesting a $6 million reduction in funding for the University and Community College System of Nevada over the two years; $6.7 million from the state's welfare budget; and $3.1 million from Medicaid.

SB6 calls for a 1 percent payroll tax based on the first $21,500 of wages of a work and a 3 percent tax on profits of financial institutions.

Negotiators Sunday worked off Senate Bill 5 that was passed by the Assembly early Sunday 26-14 with all the no votes coming from Republicans. Republicans Joe Hardy of Boulder City and Chad Christensen of Las Vegas were absent.

SB5 includes an employer tax on gross wages less amounts paid for health insurance. The rate would be 0.85 percent starting in October and then go to 0.65 percent in July 2004. The present $100 per-employee tax would be repealed.

Assemblyman Tom Collins, D-North Las Vegas, a small businessman with six workers, said his present bill of $600 a year would have been increased by more than $2,000 but he said he was willing to pay that to fund the public schools.

There would be increases in cigarettes, liquor, gaming, restricted slots, and real estate transfer taxes. There would be a live entertainment tax.

Assembly Democrats, Gov. Kenny Guinn and the casino industry sought a broad-based business tax but that effort has been scrapped. Gaming lobbyists and the Democrats had opposed a payroll tax because the gambling business is labor intensive.

But this payroll tax allows the gaming business to cushion the amount with credit for the health care plans that were a big part of the negotiations between the culinary union and Las Vegas hotel-casinos last year.

The new plan by the Assembly Democrats also eliminates a proposed 1 percent increase in the hotel-motel room tax opposed by gambling interests.

Senate Majority Leader Bill Raggio, R-Reno, said Sunday he was "cautiously optimistic" about a deal today. He said it was essential to have all the legislators present today so the new tax plan can be voted on.

Absent Sunday from the floor session that took only five minutes were Joe Neal, D-North Las Vegas, Mike Schneider, D-Las Vegas, Dean Rhoads, R-Tuscarora, Mark Amodei, R-Carson City, and Ray Shaffer, R-North Las Vegas.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, whose 15 GOP members have been blocking the necessary two-thirds vote for any tax plan, said Sunday the new Senate plan was fair. He said it credits businesses with a tax reduction if they provide health insurance and said that is a good public policy and that it could mean less cost for government in providing medical care.

He said the total cost of the tax package was still not determined.

Democrats used some skilled political maneuvers in fashioning the new plan and getting it through the Assembly early Sunday.

The Senate had passed Senate Bill 6 that called for increased taxes of $873 million.

Assembly Democrats held on to SB6 and said they would agree with the bill. But they drafted a trailer bill Senate Bill 5 to amend SB6, calling only for $829.4 million in new taxes. Because that is less than the $873 million in SB6, they said they did not need a two-thirds vote to pass it.

By agreeing with the Senate version of SB6, the bill could be sent to the governor for his signature and the trailer bill, SB5, would amend SB6 down to a lower figure.

Democrats said that averted a requirement for a two-thirds vote in SB5.

Meanwhile the 9th U.S. Circuit Court of Appeals agreed to accept the appeal of 24 Republican legislators and some industry trade groups that seeks to overturn the decision of the Nevada Supreme Court.

The Supreme Court had ruled the Legislature did not have to follow the two-thirds vote for taxes when funding education. The federal district court in Nevada dismissed the suit and dissolved the restraining order that prevented the Legislature from passing any tax without a two-thirds vote.

John Eastman, a California law professor representing the 24 legislators, asked the 9th Circuit to keep the two-thirds requirement in effect while the case was considered. But the court refused, allowing lawmakers to pass anything by a majority.

The court also agreed to an "expedited" briefing schedule that called for Eastman to present his opening brief by Aug. 29 and the Legislature and Gov. Kenny Guinn to reply by Sept. 29.

During the weekend there were periods of name-calling between legislators and long closed-door caucuses from which little movement emerged.

Hettrick and Titus got into a spat. In a televised interview, Titus accused Hettrick of ducking an invitation to appear before Senate to discuss proposed Republican reductions in the $869 million budget.

Hettrick appeared in a later TV interview in which he said Titus lied and that he was standing ready to speak to the Senate.

Titus then took the floor in the Senate to accuse Hettrick of being "reckless and foolish" and added, "I will not forget or forgive this. But I will put it aside." She demanded that Hettrick produce a list of the cuts he wants to make.

On Saturday Hettrick made public a new list calling for reductions of 3 to 6 percent in the budget of a number of agencies, based on how much their budget was increased. The plan would have cut $122 million from the $869 million budget approved earlier by the Legislature.

Democrats quickly criticized the proposal. Assemblywoman Leslie said it would have shaved $53 million from the budget of the University and Community College of Nevada; would have eliminated the $2 million to be used in the fight against Yucca Mountain; and would have delayed efforts to meld the child welfare system of the state into the Clark County program.

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