Las Vegas Sun

March 28, 2024

Senate, Assembly vote down tax packages, legislature to return to work Tuesday

CARSON CITY -- Both the Senate and Assembly voted down different $860 million tax packages Saturday evening, leaving the state's funding of education in doubt and leaving lawmakers with the task of returning Tuesday to continue work.

"I think everybody's tired," Gov. Kenny Guinn said late Saturday night in his office after lifting the time deadline from his proclamation ordering the special session.

Guinn said the 13-8 vote Saturday in the Senate, just one vote shy of the two-thirds majority for passage, suggested to him that lawmakers are willing to approve the tax package if a slight amendment is made.

An amendment to provide a capping mechanism in the net profits tax -- a device to exempt a certain number of businesses -- will be drafted over the next few days for the lawmakers' consideration Tuesday.

"I think it has the potential to get there," Guinn said.

But Guinn also made it clear that lawmakers must pass the K-12 education budget and the more than $860 million in new taxes to fund it by the end of the fiscal year June 30.

"They'll have to decide -- do they want to shut down K-12 schools on July 1," Guinn said.

Earlier Saturday evening, the Senate voted down the tax bill with one Democrat joining seven Republicans in opposition.

Shortly thereafter the Assembly voted down a similar tax bill, 23-18, along strict party lines. Assemblyman John Carpenter, R-Elko, was absent.

In the Senate, Majority Leader Bill Raggio, R-Reno, counted votes in his house and, with an assurance from Mark Amodei, R-Carson City, that Amodei would vote yes, Raggio brought the tax bill to the floor for a vote.

Few comments were made on the provision and the ensuing vote failed with Amodei joining the opponents.

Others voting against the measure were: Maggie Carlton, D-Las Vegas; Barbara Cegavske, R-Las Vegas; Warren Hardy, R-Henderson; Ann O'Connell, R-Las Vegas; Sandra Tiffany, R-Henderson; and Maurice Washington, R-Sparks.

Carlton, who has said all session that she supports $1.3 billion in new taxes, voted against the $860 million bill because, she said, "it will not get us where we need to be."

She also called the net profits tax a "Band-Aid," and said it was not as broad as it could be.

The Senate's bill included a 3 percent net profits tax that exempted the first $50,000 of a business' net profits. The bill also included a 1 percent room tax increase; a 10 percent live entertainment tax and increased levies on real estate transfers, cigarettes, liquor, slot routes and gaming.

In the Assembly, the party-line vote was sparked early Saturday morning when Democrats voted in committee to approve a tax bill that included the $2 billion education funding bill and a class-size reduction measure within.

Assembly Republicans cried foul, and held up a legal opinion supporting their call that a school budget vote could be taken separately from a tax vote.

"It's unprecedented that we would put these two together," Sharron Angle, R-Reno, said in committee.

Assemblywoman Sheila Leslie, D-Reno, summarized the Democrats' position, saying: "You're either for education and the money to fund it, or you're a hypocrite."

The Assembly's measure, Assembly Bill 1, included a 5 percent net profits tax with no exemption; a 5 percent financial institutions tax and a steeper increase in the business activity tax. The Assembly bill did not include a room tax.

When AB1 reached the floor for a vote at 7:15 p.m., Assemblywoman Chris Giunchigliani, D-Las Vegas, rose in support of the measure, even though she said it did not go far enough by not including full-day kindergarten ro smaller class sizes for kindergarteners.

"We still make 5-year-old babies deal with class sizes of 45," Giunchigliani said. "Shame on us."

Giunchigliani scolded Assembly Republicans who started the five-day special session calling for a new one to re-open the budget and reduce the amount of spending. She suggested the move was simply payback at Gov. Kenny Guinn, who called some of the same Republicans "irrelevant" at the start of the regular session.

"Some individuals never bothered to get over it," Giunchigliani said.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, said his caucus had no choice but to vote down the education budget because of the tricks Democrats had pulled.

"I won't deal in spin or anger in my remarks," Hettrick said.

Hettrick said the only reason the state's appropriations bill passed on the last day of the regular session was because it didn't require a two-thirds majority. Only bills requiring tax or fee increases require the two-thirds.

"Our statement was clearly made in our vote," Hettrick said of passage of the appropriation bill June 2 without any speeches about the level of funding being too high.

The appropriations bill, which has already been signed into law by the governor, passed the Assembly 24-18 in the last hour of the regular session.

Assemblyman Joe Hardy, R-Boulder City, said he loved children, but thought the tax package "can be improved."

Assembly Majority Leader Barbara Buckley, D-Las Vegas, gave an impassioned speech about the state's fiscal problems, overreliance on the gaming industry and need to diversify its tax base.

"We were elected to demagogue, we weren't elected to argue," Buckley said. "We were elected to fix things."

The regular session ended early June 3 after the mandated 120 days without a single vote on a tax package. Guinn ordered lawmakers into a special session June 3 and then extended the session by two days after the Legislature failed to take a vote by the initial 5 p.m. deadline June 6.

Guinn has repeatedly said that if a school budget is not approved by June 30, the schools would be in dire straits.

"The year-round schools would go rapidly," Guinn said Saturday night. "They would not have the money to do it."

Guinn also remarked about the urgent need in Clark County to hire teachers, and bemoaned the just 200 new hires for the 1,400 open teaching positions.

"They need to pass that budget," Guinn said.

Guinn also made it clear Saturday that he will not reopen the $3.8 billion state appropriations bill. Although the measure faced a close vote in the Assembly, it sailed through the Senate unanimously.

"Absolutely not, I am not reopening the budget," Guinn said.

Weary legislators left the building late Saturday night with plans to drive or fly home Sunday.

When both the Senate and Assembly adjourned and set a new time to reconvene, several lawmakers opposed the motion in a voice vote.

The special session, which began June 3, costs about $50,000 a day.

Erin Neff covers politics for the Sun. She can be reached at (702) 259-4062, (775) 687-5037, or by e-mail at [email protected]

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