Las Vegas Sun

March 28, 2024

Assembly panels OK tax plans

CARSON CITY -- A series of whirlwind votes in the Assembly on Wednesday set the stage for a final showdown between the Assembly and the Senate on a budget and tax plan that will result in roughly $900 million in new revenue.

The Assembly Ways and Means Committee finished the budget that funds local schools by including 3 percent raises for teachers in each of the next two fiscal years.

By adding that, lawmakers would need $930 million in new revenue to balance the $4.9 billion two-year budget. The Assembly Taxation Committee came close to that number a few minutes later down the hall, with passage of an $858 million tax plan.

About two hours later the Ways and Means Committee added $23 million to the package by moving the implementation dates of three taxes, bringing the rounded total to $881 million.

The tax plan of $858 million passed the Taxation Committee 8-4, with Republican Josh Griffin, of Henderson, joining seven Democrats in support of the measure.

"This is a scary time for all of us," Griffin, a first-year lawmaker, said. "As freshmen, we didn't create this problem."

Griffin said he had some concerns with the tax bill, but hoped to work with his colleagues in the waning days of the session to possibly lighten some of the load for specific industries that would be hit harder under the proposal.

The tax plan is similar to the Assembly Revenue Plan introduced last week and includes the Unified Business Tax, a gaming tax increase, higher business license fees, a live entertainment tax and increased levies on cigarettes, liquor, real property transfers and restricted slot licenses.

The plan does not include a proposal to reduce the Governmental Services Tax, which is paid with vehicle registrations, by 25 percent. That plan is still alive in Senate Bill 370, but will not be tied to any increases in specific taxes to offset the loss of the revenue.

Assemblywoman Dawn Gibbons, R-Reno, voted against the measure, saying it was too punitive to business.

"I think business is prepared to pay their fair share, and we've got to be fair," Gibbons said.

Gibbons was joined in opposition by Tom Grady, R-Yerington, John Marvel, R-Battle Mountain, and Assembly Minority Leader Lynn Hettrick, R-Gardnerville.

Earlier Wednesday the Senate Finance Committee finished its work on the school account with 2 percent raises for teachers in each of the next two years. The total new revenue needed to fund the Senate's budget is $849 million.

Both the Senate and Assembly included raises for university employees and state workers for the 2005 fiscal year. The Senate included a 2 percent raise, while the Assembly went with a 3 percent raise.

The difference between the two houses is still being negotiated in private talks.

With five days still remaining, lawmakers insisted Wednesday there was still time to work out a deal on the budget and taxes.

The Senate was expected to take up its tax proposal today on the floor, possibly to bring the measure to a vote with hopes of sending it to the Assembly. The Assembly budget and tax plan is still in drafting and not yet ready for the floor.

Legislative leaders believe that ultimately, the bills passed by the Senate will not be accepted by the Assembly, and vice versa. It is expected that conference committees will be established to work out the differences between the two houses.

Senate Majority Leader Bill Raggio, R-Reno, said Wednesday he cannot go much higher than $850 million and get two-thirds support for a tax plan in the Republican-held Senate.

"The higher you go the less support you have," Raggio said. "I'm trying to be responsible to the state's needs at the same time I'm trying to be practical about passage of the money to fund them."

In the Assembly, five Republicans need to join with the 23 Democrats to form a two-thirds majority on any tax vote.

On Wednesday the Assembly Ways and Means Committee voted 9-5 to put the budget and tax plans into the same bill. While budget votes require just a simple majority, tax votes require two-thirds.

A lawmaker will thus be forced to vote for taxes if he or she wants to vote for the $4.9 billion budget.

"We're not going to give anyone a chance to support education without funding it," Assembly Speaker Richard Perkins, D-Henderson, said. "The coward's way out is not going to be accepted.

"People are either going to stand up and be counted, or they're not."

The evening Ways and Means Committee meeting was a mess, as staff members admitted the earlier Assembly Taxation Committee vote had erroneously failed to consider $23 million needed to balance the budget.

Republicans already skeptical about the number grew moreso with each stammering answer from staff and committee leaders.

"Call it fluidity or shiftiness," Assemblyman Bob Beers, R-Las Vegas, said. "I'm actually going to vote against it because it's obscene."

Attempts to win support for the bill center on the $850 million number. But the Assembly's $930 million budget would require $80 million more in funding.

Democrats said the difference will be made up by increasing Secretary of State office fees and instituting passive revenue generators, like lifting tax exemptions and closing loopholes to save money. Those measures will be included in a separate bill.

The Senate also has a difference between the budget number and the tax plan approved to fund it. The Senate Taxation Committee has approved $560 million in taxes to fund $849 million in new revenue needs.

The Assembly's school budget includes $11 million to add one day to the school year. The budget will also include $18.5 million in 2004 and $19.2 million in 2005 for a $50-per-pupil increase in textbooks.

The school budget calls for class sizes of 16 students in grades one and two and 19 in third grade. It also would pay for the addition of 22-to-1 kindergarten class sizes in 2005. That will cost $116.7 million in the 2005 fiscal year.

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