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May. 24, 2009
Copyright © Las Vegas Review-Journal

NEVADA LEGISLATURE: Gibbons' veto of tax bill looms

Bill raising hikes to $1 billion on governor's desk

By MOLLY BALL
LAS VEGAS REVIEW-JOURNAL
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Nevada Governor Jim Gibbons talks about the state budget last Thursday in Elko, Nev. As promised, Gibbons vetoed a measure that would authorize the Washoe County Commission to enact a voter approved gas tax increase to raise money to finance transportation projects.
AP

CARSON CITY -- Who won? Who lost? And is it all over?

Those were the questions on a sunny Saturday at the Legislature, the day after the frenzied passage of the budget and taxes.

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    • With state spending for the next two years and tax hikes to fund it waiting for Gov. Jim Gibbons' veto, legislators don't have the business that usually occupies them for the last week of the session, set to end June 1.

    The centerpiece of the budget compromise, a $781 million package of increases to existing taxes, landed in Gibbons' office around 4:30 p.m. Friday

    The bill cleared its final hurdle when Senate Majority Leader Steven Horsford, D-Las Vegas, gave in to Senate Republicans on their condition that the increases to sales, payroll and business license taxes expire after two years.

    Including higher room taxes in Reno and Las Vegas, already approved, taxes in the next biennium would increase by some $1 billion.

    "It was certainly a chaotic finish," said Assembly Speaker Barbara Buckley, D-Las Vegas.

    "But in the end, stepping back, I'm pleased we were able to avoid implementing the governor's vision for our state: closing down UNLV, Draconian cuts to K-12 education, shutting mental health clinics. We made severe cuts but we also added revenue, and I think we achieved the best result for the state."

    In the halls of the Legislature, the buzz was that Horsford, in his first term as majority leader and at 36 the youngest to occupy that position in state history, got schooled by state Senate Minority Leader Bill Raggio, R-Reno, the 82-year-old veteran known for his legislative gamesmanship.

    "Raggio got everything he wanted," said one lobbyist who spoke on condition of anonymity. "He got the sunsets (on taxes), he got his (way on the) tax study, he set the agenda. The old man basically bent the young whippersnapper across his knee."

    It was Raggio who decreed that only existing taxes would be increased and that the tax hikes passed Friday wouldn't exceed about $780 million. The tax bill passed with five of nine Republican votes in the state Senate, by a final margin of 17-4.

    In the Assembly, the final vote of 29-13 included just one Republican vote in favor of the tax bill.

    Horsford agreed to remove a provision from the bill that would have authorized a commission to look for ways to implement a broad-based tax on Nevada businesses. Raggio said he also wanted a tax study but wanted to leave it open-ended.

    Though he was practically strutting through the halls during Saturday's brief session, Raggio declined to claim victory.

    "I'm not looking at political victories or partisan victories," he said.

    "That ought to be apparent at this point in my career. These are all things we've got to compromise on."

    In the end, he said, "We accomplished what we indicated we could support, and I think the important thing is there are no new taxes. We represented to the public that we were dealing with a fiscal emergency and we needed to support essential services, but we insisted the new revenues would be temporary and would sunset, and that was agreed to."

    Asked to evaluate Horsford, Raggio said, "I think he learned a lot in his first year as leader. We all benefit from experience here."

    However, a countervailing view also was circulating, one that held that Horsford had shown surprising toughness and guts through a process that saw him convene the state Senate until 4 a.m. one night, remaining unfazed as Republicans carped.

    "Nobody's going to remember that Raggio got his sunsets or what happened with some tax study," said another anonymous lobbyist. "They're going to remember who rose above that crap and got something done. It took a courageous leader to say, 'I don't care if people in this building think I lost this one. I care that schools don't shut down.'"

    Horsford expressed no regret over the concessions.

    "I was extremely satisfied with the final outcome," he said. "I'm proud that we were able to get a bill that funds our state government to the governor in time, so that education can be funded the way we want and not with the drastic cuts he (Gibbons) wanted."

    Horsford dismissed the notion that he surrendered in the final battle.

    "There were conditions that the Republicans put on their support of the tax plan, and those conditions were met," he said.

    "To me, it's more important that we protect our future, especially education, than some internal political battle. I'm much bigger than that."

    As for what lies ahead for the rest of the session, Horsford said there are plenty of policy bills legislators still want to consider, but he felt confident it would be possible to finish on time for the first time since 1999.

    "There's still a lot of things that need to be done before sine die, but usually it's the budget that holds up the end of the session," Buckley agreed. "On my end at least, there's nothing that is going to keep us here."

    Both houses have today and Monday off and will return to work Tuesday.

    As they await Gibbons' veto and the all-important override vote, lawmakers still must pass the public employee pension reforms on which Republicans conditioned their approval of taxes.

    There are other loose ends, and already Saturday it was clear there would be more mischief.

    A dispute over energy bills between the Assembly and state Senate could not be resolved, leaving the bills' fate up in the air. Both pieces of legislation are important priorities for Democratic leaders.

    And so the week ahead is sure to hold plenty of wheeling, dealing and monkey business. But a major weight has been lifted.

    The outstanding issues are "not complicated matters," Raggio said.

    "From here on out, there are going to be skirmishes. People have all these bills that in their opinion are hills to die for, and they will play political games. But we'll deal with those."

    Contact reporter Molly Ball at mball @reviewjournal.com or 702-387-2919.

    TAX INCREASES

    MODIFIED BUSINESS TAX

    NOW: 0.63 percent of payrolls of nonfinancial businesses.

    PASSED FRIDAY: Drops to 0.5 percent on the first $250,000 annually, rising to 1.17 percent above $250,000.

    ADDITIONAL REVENUE RAISED (over two years): $345.7 million.

    SALES AND USE TAX

    NOW: Varies from 6.5 percent minimum; base rate of 7.75 percent in Clark County.

    PASSED FRIDAY: Additional 0.35 percent on retail purchases.

    ADDITIONAL REVENUE: $280.4 million.

    GOVERNMENTAL SERVICES TAX

    NOW: Annual motor vehicle registration fee depreciates to 85 percent of car's value after 1 year, 10 percent per year thereafter, down to minimum of $6.

    PASSED FRIDAY: Depreciation would begin at 95 percent after one year, 10 percent thereafter, down to minimum of $16.

    ADDITIONAL REVENUE: $94.3 million.

    BUSINESS LICENSE FEE

    NOW: Annual fee of $100 per business license.

    PASSED FRIDAY: Fee rises to $200 per business license.

    ADDITIONAL REVENUE: $60.8 million.

    HOTEL ROOM TAX

    NOW: In Clark County, generally 9 or 10 percent.

    PREVIOUSLY PASSED: Hike of up to 3 percentage points in Clark and Washoe counties. Cannot top 13 percent.

    ADDITIONAL REVENUE: Estimated $220 million.

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    renomation wrote on May 25, 2009 10:16 AM: Let the party of no have their 2 second eruption. Good for them.

    Raggio = FAIL
    Gibbons = FAILURE


    greg wrote on May 25, 2009 12:28 AM: thank ewe Gym GIbbens!!!
    Gym is our "Edge you kayshun Gob'ner".
    He's dooin' a fine, fine job, Gym is.
    Love his veetoes. We R ALL better in the smartz departmint with Gym in charj. Also, he is saving ewe and me
    frum librals thaat want more mony.
    All the time, wanting mony. fur wat?
    skools? heck, ya no we got skools!
    its all a game to seprate us frum hardly erning pay. well, good gumshun frum Gym Gibbens I say! Hi to Helenwiels! SHe is my fren.


    Patrick wrote on May 24, 2009 11:09 PM: All Republicans had to do was hold off 2 more days and they would have won. 2 more days. They didn't really want to win the tax fight. They wanted the tax increase as much as the Democrats.


    Herb wrote on May 24, 2009 10:24 PM: Many of you who are criticizing Gibbons for his marital problems were the first to defend Bill Clinton and his chronic cheating.


    Wha? wrote on May 24, 2009 10:10 PM: Laura,

    Please explain what the amount paid per student annually has to do with the price of tea in China?

    Seriously, this is one of the most ignorant measures of the quality of education in existence - not to mentiont the Laura probably doesn't actually know what Nevada spends per student.


    dwchem wrote on May 24, 2009 10:08 PM: The crack pots are out of the mental institution based on the comments. The budget for the state of nevada is by far the lowest of any state per capita. So all of you people crying over the tax increase. Get over it. We are not even close to the tax and spend state you want to label Nevada. To say you use no goverment resources is a bunch of crap. You obviously have some education because you can type. Not that your logic is above the third grade level. So spare us the slash and burn politics you are spewing here.


    Sam wrote on May 24, 2009 09:51 PM: What idiot wants to pay this excessive sales tax? No person in their right mind would do such a thing. That means your money goes right into teh abusive cops ppocket and makes this the highest sales tax places in the country.

    Clark County is now the most expensive places to live.

    Time to sell out.


    Too_much_government wrote on May 24, 2009 07:59 PM: Laura and her husband are both parasites. There's no better way to put it. Laura's non-profit must receive grants from ... you guessed it. THE GOVERNMENT. If someone is suicidal, slap a straightjacket on him and transport him to our state mental hospital in Sparks. Eliminate Nevada community mental health spending. Such programs only turn this state into a manic-depressive magnet. Kooks make the rational decision to go where the meds are. Keep them out of here.

    CCSN provide REMEDIAL education. How many times do we have to pay to teach kids the 3R's? College was originally for the wealthy few, to mingle at blue-blood institutions like Harvard and Yale. Even the University of Nevada was set up for certain kind of students -- those who could handle applied science curricula. Of course, elitism is not a very politically popular message. Spending on community colleges (and other fluff) enables NSHE Regents to say that college is for all. It also lets crooked Legislators spend taxdollars (and buy votes) in their own districts. NSHE is all about politics, not education.


    Laura wrote on May 24, 2009 07:28 PM: Some of the comments in here astound me.
    Aside from already low funding per pupil in the state, mental health (I'm a social worker but work for a private non profit) is shamefully neglected and is about to get a lot worse. I suppose you want me to kick someone out of the ER if they are psychotic or suicidal, because thats whats going to happen at the rate its going.

    Be careful what you wish for. Soon teachers and professors will have no reason to stay. Why should they? They also pay taxes just like you do. Of course I take this personally since we lost at least 50% of income as my husband has been teaching as a full time adjunct at CCSN. Not everyone is qualified or able to work in casinos or construction.

    As far capitalism and Marxism their really both two sides of the same coins: that life is only about our lives as consumers and that life is about material well being, which does not necessarily mean the good life. They have little to do with freedom or form of government. Most of us in this capitalistic country are not capitalists, but "wage slaves". And of course China has plenty of capitalists. I don't like any kind of concentration of power, government or corporate. There is more to life, much more than money. Or getting that bigger house. (For us, and our two dogs we live in a 795 sq foot cottage in BC, that all we need)

    Perhaps its time to just shut down the whole state and sell it to Microsoft. If you really like private enterprise.


    Sandra wrote on May 24, 2009 06:51 PM: Poor Jim, He just can't get over Chrissy Mazzo.


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