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Cathleen Allison / Nevada Appeal
Bill Raggio, R-Reno: Won on every issue, including the sunset of tax increases enacted to fill the state’s budget gap.
By J. Patrick Coolican (contact) 
, David McGrath Schwartz
Saturday, May 23, 2009 | 2 a.m.
Steven Horsford, D-Las Vegas: Had no choice but to give in, or he could have been left without an alternative to governor's budget.
Related Document (.pdf)
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Sun Coverage
Senate Republicans scored a resounding victory here Friday, winning a set of concessions from Democrats that they have been demanding for months in exchange for agreeing to a $780 million tax increase.
Indeed, in the past four months, Republicans in the state Senate were often the only legislators here openly acknowledging the need for new taxes, and all along they said they would agree to a tax package only under certain conditions.
Led by Senate Minority Leader Bill Raggio, R-Reno, and their chief negotiator, Sen. Warren Hardy, R-Las Vegas, they said they wanted significant long-term savings in public employee benefits; a tilt toward management in the rules governing collective bargaining for local government employees; sunset clauses on any tax increases so they would go away after two years; increases in existing taxes only and not the introduction of new taxes; and a study to look at tax reform in 2011, though not one tilted toward any specific tax.
Republicans got all of it this week in the bill that passed both houses and now sits on the governor’s desk.
This development wasn’t surprising. Democratic Majority Leader Steven Horsford, D-Las Vegas, in his first term as leader, had very little leverage.
He and his fellow Democrats could not abide the budget of Gov. Jim Gibbons, the Republican whose spending plan was balanced with a 6 percent pay cut for teachers and state workers and a 36 percent cut in higher education.
But any tax increase would require 14 votes in the Senate out of 21, or two-thirds, to override the expected veto by Gibbons. That meant capturing at least two Republican votes.
Although Republicans had also criticized Gibbons’ budget as unworkable and draconian, capital observers expected Raggio, a Senate lion for more than three decades, to use his caucus votes for leverage.
And he did.
Raggio had a significant advantage: Time was not on Horsford’s side.
The Legislature’s 120-day session ends June 1. Gibbons can delay acting for five days after the Legislature sends him a final budget. To get the bill back in time to override the Gibbons veto, legislators needed a deal by 5 p.m. Friday.
When the final bill finally passed, legislative staff ran it across the courtyard to the governor’s office, where it awaits his veto.
Earlier in the week, with prodding from the Las Vegas Chamber of Commerce, Republicans won key concessions that will reduce the long-run costs of public employee benefits, while giving a bit more leverage to local governments in their collective bargaining negotiations with local government unions.
Friday, as the clock ticked down, Republicans secured the final provisions they had sought, most significantly the sunset provision.
By placing a sunset on the $781 million in taxes, which include increases in the payroll tax and the sales tax as well smaller increases in business license and other fees, Raggio will force Democrats in the Legislature to return to Carson City in two years to deal with another fiscal crisis and make more difficult choices on taxes and spending.
Sen. Bob Coffin, D-Las Vegas and chairman of the Taxation Committee, said the sunset provision, which he at one time favored, would create a more than $1 billion hole when the Legislature reconvenes in 2011.
In many respects, Horsford’s back was to the wall. Any failure to win an alternative to Gibbons’ budget would have been viewed as a significant failure of leadership.
Raggio, meanwhile, never faced a similar test on whether he would allow the tax bill to blow the deadline, possibly jeopardizing the spending package they passed, which Raggio called “bare-bones.”
Most of Friday afternoon, Horsford and Raggio were in a stalemate. They had settled the public employee benefits and collective bargaining changes. The only two pieces remaining were the sunset on taxes and an interim commission to study the tax structure.
Raggio offered an amendment to put a firm two-year sunset on most of the tax package. It failed on a voice vote.
An alternative amendment by Sen. John Lee, D-Las Vegas, would sunset the taxes in two years only if the revenue was there to fund the budget. It passed on a party-line vote.
Raggio said he wanted a hard sunset.
Sen. Warren Hardy, R-Las Vegas, called Lee’s amendment a “convenient way to get around the issue.” He said, “I can’t support a tax package without a true sunset.”
At 3 p.m., they were stuck.
A Democratic Assembly member exclaimed, “We need the (expletive) bill.”
Mike Hillerby, former chief of staff of Gov. Kenny Guinn and now a lobbyist, said at 3:10 p.m., “I’m not sure there are the votes in the Senate until someone blinks.”
Horsford blinked.
He came out of a meeting with legal staff, carrying an amendment containing the two-year sunset that Raggio wanted.
“I care more about this state, my children’s education, than scoring internal political victory,” he said.
The amendment also included an interim commission that would examine the state’s tax structure.
Raggio stood and said he appreciated the amendments, but he still wanted more. He was unwilling to give Horsford even the small victory of control over the form of the interim commission and what it would study.
“I was just handed this amendment, and I would like to recess so we can look at this in caucus,” Raggio said. He said the portions of the bill establishing the commission appeared to include language about specific taxes.
Horsford tried to save the interim commission, by committing to work with Raggio on clarifying the commission’s purpose.
Raggio insisted on recessing, and with Coffin shouting “No, no,” Lt. Gov. Brian Krolicki, the president of the Senate, banged the gavel.
Raggio and the rest of the Republicans returned about 10 minutes later.
Raggio said he wanted a tax “study that was credible.” He would not support Horsford’s amendment, unless the commission language was removed — to be reintroduced later in a separate bill.
Horsford again relented. He said he would delete the provision.
The bill passed the Senate 17 to 4. The governor received the package at about 4:30 p.m., a half-hour before the Legislature’s self-imposed deadline.
Of the nine Republicans, five — a majority of the caucus — voted for it.
It was their package, after all.
It is all a dog and pony show full of smoke and mirrors.
The Republicans agreed to tax increases on employment.
They got token gestures in return of which any can be easily reversed in the future.
The "savings" they got will not go into effect into 30 years from now.
Two years from now there will be another dog and pony show with another big push for new taxes and/or higher taxes.
I am not sure what fig leaf that the Democrats will generate to help their Republican pals 2 years from now.
Even the Sun is trying to help generate a fig leaf for their Republican friends.
The only certain thing in life is death and taxes.
What happens in 6 months when the budget numbers prove to be faulty. When tax revenues don't meet the projected increases, does the Governor have the right to cancel programs to make it fit? Does the state just spend until the money is gone and then come to a halt?
We raised 800 million a few years ago and it cost us a 3 billion shortfall. Raise 800 million more and lets see if it costs us another 3 billion.
don't worry, be happy
tbvegas is right.
It was the tax increases passed in Nevada in 2003 that caused the current shortfall.
Not the global recession.
Not the real estate bubble.
Or maybe it was the 2003 tax increases in Nevada that actually caused the global financial meltdown!
Stop the presses!
The taxpayer is looking like "simmering ribs on a memorial day barbecue" about now. Unemployed need money, cities need money, counties need money, states need money and today on C-span the prez says "we're out of money". gulp
Public spending was essential to creating jobs in the Great Depression. Look at these hundreds of billions now pouring in to everything. This economy will be turning around within months IMO -- found a cool site; Balkingpoints ; incredible satellite view of earth
gotjobs:"the prez says "we're out of money".
So his solution is to just keep on printing more money.. monopoly money..
reg373:"Public spending was essential to creating jobs in the Great Depression. Look at these hundreds of billions now pouring in to everything. This economy will be turning around within months IMO "
As nice as that would be, you haven't seen the bottom yet... where are these jobs? Why do these corporations continue to ask for more money? The economy isn't even close to turning. around... Businesses continue to close, houses continue to be foreclosed upon or abandoned, and more jobs are being lost..
You might want to read up a bit more on the Great Depression...
It's hard to see this legislation, with all the trimmings attached, as a win-win for the core needs of Nevada, certainly urban Clark County, today.
When enough of the old, dogmatic, stereotypical Nevada leadership, legal profession, lobbying machine and constituent demographic move along with the passing of history in Nevada, there will be a new wave of leadership, with new thinking not unlike the thinking among young people and new leadership in highly educated, urban areas around the country emerging today.
These years for Nevada are but "back pocket jean patches" compared to effective public policy leadership and budgeting.
Kudos to Majority Leader Horsford for doing the best he could do this session,and Minority Leader Bill Raggio for being open-minded for some tax increases, presented with a Governor Gibbons who merely posted numbers on the wall representing a far, far right totals, and walked away.
Investors, specifically investors from outside Nevada, some with full or part time residences in Nevada, get the real wealth from Nevadan's hard work, while the uneducated and ill-advised Nevada citizenry get the shaft. Nevada's resort industry is a conduit-engine for their wealth.
Keep reading the broad base of daily crime stories in your local paper, because with your current funding levels for education and super nightclub business, the state leadership and the gaming industry are simply building towards the next generation of toke-happy, month to month, "all about me" citizenry.
Quite perhaps, many of the very young ones in Nevada today will be moving to Cuba as adults, maybe the east coast of Baja for jobs they are equipped for, while Southern Nevada becomes a Strip Corridor with huge floating barges (casinos) that are outdated, too large in scale, too small in customer service, and without years of proper funding for the communities in decline around them.
Sound like a documentary movie?
The Caucasians will blame it on the growth of minority population and leadership. But the truth is long term problems were planted and watered in these times today by the same Nevada citizen defined in the second paragraph, who will be long since gone, with someone else left behind to left to fight the good fight in Clark County.
I am writing this post purposedly "skewed left" beyond my personal opinions, which are more center weighted, because Southern Nevada desperately needs new thinking, and a more open mind to recognize the problems manifesting yearly in it's communities without reply from it's state leadership.
State and local values should have balance with business growth and profits.
Sadly today, too many people with a voice to speak in Nevada are living in the now, "only".
When will people learn that you can't TAX your way out of a recession? The government needs to do what we, the people do in hard times... tighten the belt and cut spending.
Keep Nevada an attractive place to do business, grow the economy and the money will flood back in. This is not a hard concept for people with an IQ above room temperature to understand.
Republicans blew this chance to really make a difference in the direction our great State is headed in.
Without good policy, broad taxes, and cuts in programs that do not work, Nevada will continue to be at the bottom of every list.
I wish Nevadans would pay more attention and cared more about this State. Until we stand up to all these lobbyists and those that want to stop progress nothing will ever change.
Spending more money isn't progress....
It's a pretty sad day when the LAS VEGAS SUN sounds sympathetic toward Republicans. I left the party after McCain became the nominee. I couldn't stand to be in a party moving further and further to the left. McCain, Snowe, Stevens, Isakson, Collins, Chafee, Murkowski" what a train wreck. Republicans are now just a better dressed version of Democrats. 429 is a great engine but stinks as a bill. I should have known something was up 20 years ago when all these California Liberals started moving here. They destroyed MY state and some have the nerve to call themselves Conservative!