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Gov. Brian Sandoval addresses the Las Vegas Chamber of Commerce at a luncheon at the Four Seasons Hotel in Las Vegas on Wednesday, Jan. 26, 2011.
By Anjeanette Damon (contact) 
, David McGrath Schwartz
Published Thursday, May 26, 2011 | 3:36 p.m.
Updated Thursday, May 26, 2011 | 4:15 p.m.
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Gov. Brian Sandoval will include taxes set to expire next month in a revised budget he will unveil Friday, according to a source. The move, which would run counter to his pledge not to raise taxes, comes thanks to a Supreme Court ruling Thursday that prohibits the Legislature from taking local tax dollars to fund the state.
In a statement this afternoon, Sandoval said he would present a revised spending plan on Friday that takes into account the lost funds. "The ruling raises questions about certain assumptions in the proposed executive budget," the statement said. "As governor, I am forced to deal with their ramifications and I am responding by reworking the state budget."
The source close to the administration said "that ruling puts the sunsets in the state budget back in." Sandoval, who has vowed since his candidacy not to raise taxes, has said he would consider extending those taxes to constitute a tax increase.
Passing the sunsets would raise $712 million, though some of it would have to be used to close holes now opened by the Supreme Court ruling.
It was not immediately clear, however, whether Sandoval would back the entire $712 million infusion, or simply allow a portion of the 2009 tax increases to continue in order to address his funding concerns.
The immediate issue ruled on by the Supreme Court involved $62 million held by the Clark County Clean Water Coalition for a now-canceled water project, which the Legislature raided for the state's general fund. But the ruling has wider implications, as Sandoval noted in his statement.
According to sources other funds lost under the Supreme Court decision include:
• $247 million in debt reserve money Sandoval had proposed using from Clark and Washoe county school districts.
• $121 million in property tax money from Clark and Washoe counties.
The ruling could cost the state more money. For example, Clark and Washoe counties could seek to recover the $151 million in property tax taken in 2009, plus the $221 million in room tax money raised from Clark and Washoe counties.
Since the beginning of the session, Democrats have opposed a number of Sandoval's financing mechanisms that now are at risk under the Nevada Supreme Court decision.
As they've closed budgets, they've eliminated Sandoval's proposal to take debt reserve funding from the school districts and rejected the proposal to redirect property tax funds to UNR and UNLV.
The ruling, however, also hurts Democrats' proposed budget, opening up an estimated $120 million hole in the alternative they've been crafting. One source said that hole could easily be addressed by extending the line of credit from the Local Government Investment Pool and eliminating enough mining deductions to net the state between $60 million and $80 million.
Democrats’ budget alternative relies on the entire $712 million from the sunsetting taxes. If Sandoval allows the state to continue collecting only a portion of that revenue, Democrats would be forced to make further cuts to their spending plan.
Republican lawmakers had supported Sandoval's budget. The governor's changing position could provide a political opening for some Republicans lawmakers to support tax increases.
"We've got a big problem. I'm sure the governor is putting pencil to paper and figuring that out," said state Sen. Joe Hardy, R-Boulder City. "The governor's budget is at this point unfunded. I've said I support the governor's budget, but he's got to figure out how we get there."
In today's ruling, the court found the Legislature had violated the Nevada Constitution by taking money from the Clean Water Coalition during a 2010 special session.
The coalition had collected money from Clark County residents to design and build an $850-million system to carry treated sewage deep into Lake Mead. Local governments had collected money from the residents on their sewer bills and turned it over to the coalition. However, the project was suspended in December 2009 due to the recession and slacking growth in Southern Nevada.
In a unanimous opinion written by Justice James Hardesty, the court said the Legislature has "considerable lawmaking authority" under the Nevada Constitution but there are restrictions on this power.
The Legislature is prohibited from enacting local and special laws for the assessment and collection of taxes for the state, rather the constitution requires laws to be general and uniform throughout the state. The court said the Legislature violated this requirement when it singled out the Clean Water Coalition and took money that was collected in Clark County.
The ruling reverses the decision of District Judge David Barker, who ruled in favor of the Legislature.
The governor was briefed on the unanimous Supreme Court decision by the Attorney General's Office and then met with his budget office to evaluate whether additional reductions could be made in his proposed budget.
Sandoval said the ruling has "far-reaching implications for how Nevada governors and Legislatures will do business from this date forward."
Sun reporter Cy Ryan contributed to this report.
So because of the failing of the legislature. Now we need to raise taxes for money the greedy already spent. It will never end. Might as well just write a check now for everything i have so dems can give my stuff to the unemployed.
Don't do it if you give them a dollar today they will ask for 2 tomorrow.
BRIAN SANDOVAL IS A COMPLETE AND TOTAL FRAUD!!!
thank god the supreme court stopped his potential theft...
governor "my kids don't look hispanic" loves to screw southern nevada...
and the court stopped that maggot in his tracks...
he's a fraud...
who seems to enjoy inflicting irreparable harm on the innocent children of the very state he serves...
BRIAN SANDOVAL IS A COMPLETE AND TOTAL FRAUD!!!
Southern Nevada is by far the largest in population and generates most of the revenue in this state. It's high time for Nevada's politicians (both those in the North and those from the South who pretend to support their constituents but really pander to the ideological fanaticism of their respective parties) to recognize that upsetting Las Vegans by dismantling their educational system K-Higher Ed, there will be a heavy price to pay!
Pennsylvania currently has ten casinos, Las Vegas has 260.
The Keystone State levies a 55 percent tax on slot machine revenue, however, while Nevada's tax is only eight percent.
Apparently, this tax has not done much to dissuade gamblers. Revenue from slot machines rose from $13.4 million in 2006-07 to just below $1.75 billion in 2008-09, according to the Center for Gaming Research.
Read more: The Ten States That Profit Most From Sin - 24/7 Wall St. http://247wallst.com/2011/05/13/the-ten-...
While I have never supported Gov Sandoval's budget because I believed there were to many gimmicks and money grabs I do have to give him credit by standing by and refusing to sign the No Tax pledge. This has given him the opportunity to maneuver as he needs to when the writing is on the wall that there now is just not enough money.
This will as well protect the local governments need to layoff more employees after they have already taken pay cuts and other concessions. While some might argue not enough and I might agree it is better then laying off and putting more people in the unemployment line.
Considering that the top 50 businesses that are paying these taxes said they want to keep paying them to support Nevada this should not be a hard decision for him to make.
They are willing, just say yes and keep collecting a tax they have been paying since 2009. $700 Million dollars goes a long way to supporting this state.
Common sense says if they want to pay, let them. To bad to many elected officials are not using common sense.
to our hispanic friends...
you do realize brian sandoval is a coconut...
right...
a complete and total coconut...
and he could give a rat's @$$ about you...
you are frickin losers to him...
even though many of you are in the very same position his parents once were in...
brian "my kids don't look hispanic" is a fraud...
a complete and total fraud...
A FRICKIN COCONUT!!!
there are oreos...
and there are coconuts...
brian "my kids don't look hispanic" is a FRICKIN COCONUT!!!
If he does not keep his word he will never be trusted by his base. He will forever be known as a RINO if he keeps the taxes and breaks with his own pledge.
Our uptick in the economy is because we believed him in his promise. If you wanna see the uptick stop. Then raise taxes and watch the taxes not materialize and then some.
The Nevada Supreme court has to make the decisions this idiot won't or can't make. This is further proof that Governor B.S. in in over is head and that campaigning is not governing.
Brian is done. He has shown the true "republican" way of crushing the lower and middle class, and rewarding the corporations and big businessmen. He has his hypnotic republican legislators causing great damage to Nevada's current and long term health. The voters and constituents will not forget the damage they have done and WILL vote Brian and all the ignorant legislators OUT.
Wouldn't the Repugnicans call this 'flip flopping'
If a Democrat did this?
Lee - The problem with common sense is that it's not all that common.
Ah, to live in a state where common sense rules; I miss that. But yes, I agree: when the very entities that are affected by taxes are saying - screaming, in fact - "Tax us. Funding education and essential social services is essential to any state where business wants to operate," and the Repubs and saying, "DUH, no," you know you are living in a backward, cowboy state where the majority of voters and Republican "leaders" lack the intellectual capacity to even identify what voting against their best interests means.
"Our uptick in the economy is because we believed him in his promise. If you wanna see the uptick stop. Then raise taxes and watch the taxes not materialize and then some."
This makes no sense whatsoever. The very small economic "uptick" NV has experienced has nothing at all to do with Sandoval; it has to do with a larger trend that's affecting the rest of the country, resulting in tourists willing to travel to Vegas and convention business returning to NV. Please, tell me: what does this have to do with Sandoval's proposed budget? His policies? His (ridiculous) no new taxes pledge? Enlighten me, please. Has Sandoval's policies brought construction business back to the state? Has it curbed foreclosures? Has it brought a significant gain to the housing market? Do you even know what you are talking about?
How can any of you say this is not a "reasonable" man and Governor? Remember the previous administration that made only left turns?
Governor Sandoval is doing the best he can with what we've got to work with.
I wonder if this will force both parties to negotiate a little more honestly? Maybe neither party will get all of what they hope for-e.g. rape and pillage of the middle class, the disabled, the children and the elderly, but perhaps will be forced to make real compromise and reasonable budget choices?
Nah, I'm dreamin'
"How can any of you say this is not a "reasonable" man and Governor?"
You're kidding me, right?
The man's hand was forced by the court's decision... he didn't come to this decision on his own. This wasn't the result of compromise or a trade-off, this was the court telling him a huge chunk of revenue he was grabbing was unconstitutional.
Further: this possibly put nearly a half-billion dollar hole in just his budget, which has to be balanced per the amendment. And, as the story states, the state could be on the hook for even more:
"The ruling could cost the state more money. For example, Clark and Washoe counties could seek to recover the $151 million in property tax taken in 2009, plus the $221 million in room tax money raised from Clark and Washoe counties."
Combine the figures and you get an estimated $802 million dollar total liability the judgment could entail.
In the end, if the extension of sunsetting taxes can only draw $712 million as reported, Sandoval would have to cut a further $90 million from his own bare-bones budget.
And if he chooses to ignore those further complications, he may release a budget tomorrow that will end up imbalanced if Clark and Washoe demand their property tax revenue returned.
Reasonable? Give me a break. He was balancing his budget with gimmicks and power grabs and now he has to feverishly rework his entire plan.
Oh, Justin. You are entitled to your own opinion but not your own facts. Its not a tax increase. Its maintaining some taxes that are already here. And its maintaining some Nevada small business tax breaks, too-but you never bothered to research the matter to discover that.
Call you legislator at 1-800-978-2878 and tell them that its time for the foreign mining corporations to have their tax breaks, paid for by Nevada's working families, taken away to help pay for the budget deficit so that working Nevadans can have their taxes lowered instead of raised by the Republicans.
Hey Dr Joe Hardy. If you vote to raise my taxes, I will not forget.
The Governor is doing what he has to to make this state work. He is practical and realistic. Now is not the time to break the unity of the Republican party. We should stand with the Governor.
Besides, this isn't raising taxes, its just not lowering them as expected. He broke no promises to me.
A strict interpretation would mean that the State CANNOT TAX MINING OR GAMING any differently than it taxes every other INDUSTRY's gross revenue or net profit.....
@Roseanrose. Going one step further, since mining taxes are capped in the State Constitution, gaming could have an arguement that they are due a refund of about 350 MILLION in taxes that gaming paid in 2010 over and above what mining paid on the same revenue. Can you say problem?
The issue was highlighted in a recent power point presentation at the Barrick Mining annual meeting. One of the mines highlighted in the power point was the Cortez Hills Mine in Northern Nevada. According to the power point, in 2010, the mine produced 114,000,000 ounces of gold (over 35 TONS) at a production cost of $312 per ounce. During the first quarter of 2011, the mine produced 366,000 ounces (over 11 TONS) of gold at a production cost of $220 per ounce. If you project a sale price of $1000 over cost of production,that results in a profit of over $1,500,000,000. Based on what the mining industry paid in taxes in 2009, the tax payment to the state of Nevada will probably be less than 50,000,000. The power point goes on to point out that the projected production from Cortez Hills for 2011 will be between 1.30 to 1.45 MILLION ounces (40-45 TONS)at a production cost of $235-245 per ounce. This is natural resource that should provide significant benefits to the citizens of Nevada. Unless the Legislature acts quickly, another two years will pass without any significant action to change the tax structure of the state. http://media.lasvegassun.com/media/pdfs/...
"He was balancing his budget with gimmicks and power grabs and now he has to feverishly rework his entire plan"
Right on. Couldn't of said it any better!