Las Vegas Sun

March 28, 2024

Assembly adjourns, doesn’t wait for Senate to pass tax plan

CARSON CITY -- The state Assembly adjourned shortly after noon today with leaders saying there is no reason to keep members sitting around waiting for the Senate to pass a tax plan.

With 29 of 42 members present, and Republicans outnumbering Democrats in the Democratically controlled chamber, the Assembly adjourned until the call of Speaker Richard Perkins, D-Henderson.

"With the lack of progress being made, it seems silly to keep our folks in Carson City at taxpayer expense," Perkins said.

Perkins, Assembly Majority Leader Barbara Buckley, D-Las Vegas, and Minority Leader Lynn Hettrick, R-Gardnerville, are expecting to stay in the Legislative Building to work on negotiations.

"If we don't see some movement in the next three or four days, we might just adjourn for good and have the governor call us back at the end of the month," Perkins said after adjourning.

Buckley told lawmakers to be ready to return "at an hour's call," but also told her house's members to go home and see their children.

Perkins adjourned the session with what he called "encouraging remarks" and said: "No one person is to blame."

Senate Majority Leader Bill Raggio, R-Reno, left Perkins' office just before the Assembly's adjournment and told reporters waiting for news: "I have no comment at this time."

Raggio is now going to work with his caucus to amend Senate Bill 5 into something that could pass the Senate and be supported in the Assembly.

Senate Minority Leader Dina Titus, D-Las Vegas, told senators she was flying home before heading to Spain today. However, late this morning she was still in Las Vegas and available to return to the state capital.

The state's constitution prohibits lawmakers in a special session from adjourning for more than three days without consent of the other house. The session would not automatically dissolve after a three-day break.

But Perkins said he would support dissolving it at that point if no progress is being made.

The adjournment came after a tumultous day of activity in the state Senate which saw a tax plan to raise about $870 million fail twice. The Legislature also must pass the state education budget.

The failed votes on tax plans in the Senate on Wednesday left lawmakers far apart so the leaders talked about returning closer to the end of the month to complete their work.

A tax proposal died Wednesday night in a 13-8 vote, one vote shy of the needed two-thirds.

Gov. Kenny Guinn had talked to the leaders of both houses and left the adjournment decision up to them.

Perkins and Raggio had met separately with Guinn on Wednesday evening to report no progress was being made.

"I explained to him I thought we were getting farther apart than closer," Perkins said after his meeting with the governor.

Perkins spoke with Raggio early today to report he wanted to shut down the session. Raggio countered by saying he thought he could still pass Senate Bill 5, the measure that twice failed Wednesday.

The bill came from a compromise plan, reached late Tuesday night between Assembly Democrats and Sen. Mark Amodei, R-Carson City.

The plan includes a payroll tax of 0.6 percent rate which was used to replace the business license tax. The plan also has a franchise tax applied on business gross revenue based on a sliding rate scale. It also has a 3 percent financial institutions tax and a 0.10 percent tax on live entertainment.

The live entertainment tax applies to admissions, food and beverages. However arenas with more than 5,000 seats do not have to pay the tax on their food and beverages.

The plan also includes increased levies on cigarettes, liquor, slot route operators, gaming, real estate transfers and business filing fees.

Raggio said the Assembly could simply amend SB5 and the two leaders could work out differences in conference.

But Perkins said any amendments to SB5 in his house would cause him to risk losing the four Republican yes votes he already has. In addition, Perkins said Wednesday he felt "completely turned around" because the compromise he had helped craft was never considered by the full Senate.

In a second meeting this morning, Perkins asked Raggio to vote on the compromise plan and send it down the hall to the Assembly for consideration.

Guinn told his staff he had wanted lawmakers to remain at work in the capital despite the setback in the Senate, where a tax bill failed to reach the two-thirds majority by one vote on two separate attempts.

But the Assembly and Senate can concurrently resolve to end the session on their own.

"They will have to make a decision. I took the time limit off," Guinn said. "They have to make up their minds."

If legislators call it quits, Guinn said he would call them back into session before the end of the fiscal year, which ends June 30.

The bill to provide $1.6 billion in state aid to schools over the next two years hasn't been passed. That needs to be approved before June 30 so the state can start distributing the money.

The theatrics in the state Senate on Wednesday left even veteran lawmakers and lobbyists saying they had never seen anything like it.

The fatal votes on an $866 million tax plan actually took root before the end of the regular session June 2.

Amodei, R-Carson City, had been working with Sen. Mike Schneider, D-North Las Vegas, on a trade-off.

Schneider wanted an amendment on a tax bill to allow time-share properties to move gaming licenses across the county in exchange for paying more in taxes. In exchange for Amodei's help putting that into a bill, Schneider was ready to back Amodei, the Senate president pro tem, in a bid to raise the gross gaming tax and impose a room tax.

That never materialized by June 2, but it proved the end of the tax plan Raggio thought he was about to pass from his house Wednesday evening -- the sixth working day of the special session.

Before that occurred, the Senate Republicans rejected a compromise plan reached between Assembly Democrats and Amodei late Tuesday night.

As Perkins waited on a counter-offer, Republicans were instead drafting their own bill.

When the bill reached the Senate Committee of the Whole just before 4 p.m., Assembly Democrats were furious.

Titus spoke in opposition of the plan because it had thrown out the compromise proposal's franchise tax and bank tax. In its place the Senate relied solely on the payroll tax that the Assembly hates.

Titus took a shot at Amodei by saying: "I'm not as smart or articulate as my colleague, the lawyer from Carson City, but I came to this session prepared to pay for a broad-based business tax."

One by one, her Democrats broke with her saying they simply wanted to move the bill over to the Assembly, or wanted to go home.

"Since I'm not like others who are financially able to stay here till hell freezes over, I don't want to stay here," Sen. Joe Neal, D-North Las Vegas, said.

Schneider said that while he didn't like the proposal, he viewed it as "a good floor plan" that could change in the Assembly.

Sen. Bob Coffin, D-Las Vegas, mentioned slight changes between the Assembly and Senate on cigarettes, liquor, room and bank taxes, but failed to note the lack of a franchise tax on business as a difference between the houses.

"Frankly, I don't see a great deal of difference," Coffin said as Titus shook her head in amazement.

The measure passed 15-6, with 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 Titus, opposed.

The Senate convened in its chambers about 30 minutes later to vote on the package as the full Senate, and not just the committee.

What appeared to be a procedural formality suddenly went south as Titus worked the room before the vote.

"Is your language in here?" she asked Schneider, who shook his head as if he was not sure.

After the motion was made to pass the tax bill, Titus asked if the time-share language had made it into the bill. After Legislative Counsel Brenda Erdoes said it was and pointed out the section, an angered Titus asked: "How did that get in the bill?"

Amodei said the amendment was simply one the Republican caucus agreed to include. "What else is in this bill that hasn't been discussed?" Titus asked.

That upset Coffin, who had been lobbied all afternoon by Michael Gaughan of Coast Casinos, a client of the senator's who disliked the high amount gaming would have to pay under the Senate's tax plan.

"I was unaware this was in here," Coffin said. "It's totally irrelevant."

Although others pushed to pass the plan, Titus kept up the pressure, noting that the time-share language would allow an unrestricted gaming license to move anywhere in the county -- even outside of the gaming enterprise districts that lawmakers had set aside in past sessions to prevent the continued growth of neighborhood casinos.

The ensuing vote was 13-8 with Coffin and Sen. Valerie Wiener, D-Las Vegas, joining the original six no votes and killing the measure.

Neal immediately rose to rescind the vote and called to amend out the time-share language.

As the amendment was being readied, Assembly Democrats swarmed over Coffin and Wiener trying to keep them in the no column. Schneider spent some of the waiting time yelling at Titus on the floor.

Thirty minutes later when the amendment was printed and the vote was taken again, it had the identical result -- failure by the exact same tally.

Schneider, who helped develop the time shares at the Royal hotel east of the Strip in Las Vegas, is friends with the current owners who want to move the license and open a new property. Schneider said he sold his interest in the Royal two years ago and thought Titus exposed the amendment simply to make him look bad.

"She's (ticked) because I voted for this to get it into play," Schneider said of his vote in committee. "Now we don't have anything in play."

Coffin said he kept his no vote even after the time-share language was removed, because: "When you see a 200-page bill and all of a sudden a surprise is put in there, you haven't seen God's green earth. This whole process is about trust."

He said the increased levies on the gaming industry had nothing to do with his opposition.

"I don't care what they like," Coffin said.

If lawmakers do disband the special session, they will have to return in a new special session -- the 20th in state history -- to pass a tax plan and education budget by the end of the fiscal year June 30.

Guinn said the two sides now appear focused on a payroll tax in the Senate and a franchise fee in the Assembly. "Both areas fit the criteria for me," he said. He said the lawmakers are "pretty close on the ancillary taxes," on such things as cigarettes, liquor, entertainment and real estate transfer taxes.

The governor said the 10 to 11 bills that he will ask the session to pass could wait until the end of the month. But he said he is getting all kinds of requests to put additional subjects on the special session.

The only ones he will include on the agenda, he said is those that passed but got hung up in the processing before the regular session closed June 2.

If no K-12 education budget is in place by June 30, schools will face serious trouble, Clark County School District spokeswoman Joyce Haldeman said.

"All the planning that goes into starting the school year, hiring teachers or opening schools is on hold," Haldeman said. "This is absolutely no way to recruit and attain quality teachers."

Haldeman said she is unsure whether the district's contracts that begin July 1 will remain intact. She said the 10 schools under construction in Clark County will have no staff to prepare them for opening and she said the district might have to cancel summer school.

The 76 year-round schools will be funded and continue operating with revenues from local sources, Haldeman added.

The biggest problem continues to be recruiting teachers. Clark County needs 1,400 and has hired just 400.

"They read the papers and they want to know whether their contact will be funded," Haldeman said.

In addition to trouble recruiting, the new hiring requirements contained in the federal No Child Left Behind Act take effect July 1.

After the two Senate votes, Perkins lamented the lack of support from Republicans in his house that forced the Senate to take the lead.

Five Republicans need to join the 23 Democrats in support of any tax plan to reach the two-thirds majority in the Senate. Four are solidly in support, but efforts to find the elusive fifth depend largely on having the conservative house pass the tax plan first.

"Right now it doesn't look like anything's possible over there," Perkins said.

Immediately after the Senate vote, lawmakers began leaving the building toting their luggage. Many have been staying in hotel rooms since their apartment and house leases have run out, and many had promised to return to work or family vacations by now.

Two Democratic yes votes -- Morse Arberry and David Goldwater -- said goodbye early Wednesday evening. In the Senate, Neal left immediately after the second failed vote announcing: "I'm going home to Vegas tonight."

Despite the boast, Neal was back in the Legislative Building this morning.

Perkins said that while he believed a majority of his members would still be in town today, he realizes how difficult it will be to make up missing yes votes by tapping Republicans.

Throughout the special session, Assembly Republicans have said they want the governor to reopen he appropriations bill that has already been signed into law. They say they want to cut hundred of millions of dollars to reduce the total need for taxes.

But the appropriations bill was approved by 71 percent of all lawmakers and Guinn has adamantly refused to budge from his decision not to reopen the budget.

Perkins said Wednesday that if lawmakers return to work at the end of the fiscal year there will be a greater sense of urgency to reach consensus. He also said legislative leaders would probably still meet during any time off to help forge consensus.

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