Cathleen Allison / AP
Tuesday, May 14, 2013 | 2 a.m.
When Senate Democrats on Monday released details of a tax increase they say is needed to adequately fund education, they swung a partisan hammer that shattered the patina of cooperation and comity that had dominated this legislative session.
With just three weeks to go until the Legislature must constitutionally gavel to a close, the tax fight has sparked a Republican versus Democrat rancor that threatens to control the debate until the final days.
Democratic leaders have floated two tax plans:
• The first proposal would levy an 8 percent admissions and entertainment tax that would be charged on activities such as concerts, movies and gym memberships. The tax could generate $50 million or more.
• The second proposal would increase the state’s modified business tax levied on payrolls. The $255 million tax plan would increase the mining industry’s tax rate to 2 percent from 1.17 percent. Businesses with payrolls larger than $250,000 would be charged 1.5 percent.
Republican leaders, backed by the veto-pen-wielding governor, say no way to both.
It’s a far cry from the scene Feb. 4 when legislators promised friendliness and a willingness to work together. Now, they are facing off in testy exchanges, retreating to their partisan camps to draw new battle lines as the calendar marks the 100th day of the 120-day legislative session.
At stake is the size and scope of government, as well as the viability of state education, health, public safety and transportation programs.
Republican Senate Minority Leader Michael Roberson, who called Senate Majority Leader Mo Denis, D-Las Vegas, a “fine man and a good friend” on the first day of the legislative session, lambasted the Democrat’s payroll tax hike proposal on the Senate floor Monday and accused the party of kowtowing to the mining industry’s lobbyists.
“I did tell him on the floor that their proposal is dead,” Roberson said.
Not long after Roberson’s floor speech condemning the Democrats’ plan, Gov. Brian Sandoval appeared at a news conference flanked by the two Republican leaders to tout his decision to direct more money to education without raising taxes and reassert his veto authority over the Democrats’ two tax plans.
“I oppose them,” he said.
Shortly after that press conference, Democrats unleashed a pair of strongly worded press releases accusing Republicans of “stonewalling” on any lasting tax fixes and attempting to “shortchange” students by opposing their efforts to raise revenue.
Both sides agree more revenue is needed for class-size reduction, English-language learner programs and full-day kindergarten. But the vehement disagreements over exactly how much more revenue is needed are coming to a head.
Democrats have called for an additional $300 million in education programs, which they say their tax plans would address.
Sen. Debbie Smith, D-Sparks, said that much of the governor’s new education spending reflects the costs of educating more children than in previous years.
“That’s not new programs or (replacing) programs we’ve cut,” she said. “It’s the cost of doing business and enrollment growth.”
The $120 million spending for new programs pales in comparison to what Sandoval and former Gov. Jim Gibbons slashed from state education budgets during the recession. Smith pegged that number at $700 million.
At the press conference, Roberson and Assembly Minority Leader Pat Hickey, R-Reno, flanked the governor, presenting a united front that would make it difficult for Democrats to peel away Republican votes necessary to pass their tax plans.
Raising taxes requires a two-thirds vote, so Democrats need three Senate Republicans and one Assembly Republican to join with Democrats to pass tax bills.
Sandoval’s opposition and his promise of a veto if either tax bill reaches his desk reinforce the political risks Republicans face if they break from their governor and legislative leadership to vote with Democrats to increase taxes.
Further complicating the scenario, however, is that Roberson has put forward his own tax proposal — opposed by the governor — to ask voters to approve doubling the levy on large gold and silver mining operations.
The debate is far from over, even as the last day of the legislative session draws nearer.
Senate Democrats say their payroll tax increase is a temporary “bridge” to tide the state over until a permanent solution can be found — either a legislatively approved one or a ballot-approved one.
Lawmakers are up against a ballot initiative backed by the teachers union to impose a 2 percent margins tax on businesses. Few legislators are thrilled with that tax.
The overall end game for Democrats, therefore, seems to be crafting a package that can both pass Sandoval’s muster and compel the teachers union to back off the margins tax ballot question.
But Denis said Senate Democrats aren’t prepared to release the details of their “permanent solution.”
“I’m not prepared today to do that because there are just a lot of different variables right now,” he said.
Roberson doesn’t seem to be on board with the “permanent solutions” under consideration at the moment.
“It’s a bridge to nowhere good,” he said.
Sources familiar with the deliberations say it includes a possible ballot measure for a 3 percent corporate income tax and a mining excise tax proposal.
The moribund tax-on-services idea could also be resuscitated in the interim.
The problem, as Sandoval pointed out in his press conference, is that June 3 is fast approaching.
“We’ll see what that conversation is as we try to shut this thing down,” Sandoval said about the 120-day session. “This budget is supposed to be closed by this Friday. We are going to be meeting with leadership tomorrow, and we are going to be having these conversations that there is very little time left.”
Addressing when the legislative session is closed, Denis said that Sandoval “doesn’t get to choose that.”
“He gives recommendations,” Denis said. “We determine what gets funded.”
While Democrats need four Republicans to join them to meet the two-thirds majority to pass a tax plan, Republicans need Democrats to pass any bill whatsoever.
“They need us,” Denis said. “They can’t do anything on their own.”