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GOP, Democrats take closer look at looming cuts
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LAS VEGAS REVIEW-JOURNAL CAPITAL BUREAU
Updated: Apr. 4, 2011 | 7:11 a.m.
CARSON CITY -- Painting classes Sonnie Imes takes at the Minden branch of Western Nevada College have helped her find work as an art director on 40 worldwide cruises.
Juan Balles hopes English classes he is taking will lead to better understanding and a better job in his new country.
Chris Trowbridge's construction company collapsed , and he anticipates the engineering classes he takes will lead to a new career.
These three people, middle age or older, have one thing in common: They want their 700-student college to still be open in September 2012.
But that probably won't happen unless legislators find revenue to replace the 22 percent cut in higher education and the 9 percent reduction in public school spending recommended by Gov. Brian Sandoval.
Legislative Democrats hope these and other students will persuade their no-new-taxes Republican lawmakers to retain a handful of existing taxes -- including payroll and sales taxes and car registration and business license fees that bring in $800 million in revenue a year -- which would otherwise expire June 30. Many GOP legislators already have stated their concerns over plans to close branch campuses in their districts.
Republicans want Democrats to agree to at least some elements of a five-point reform plan that includes reforming collective bargaining for public employees as well as privatizing the state health insurance program, ending prevailing wages, and providing school vouchers for parents, among other things.
Up to this point, Democrats haven't budged in their call to extend the taxes and save collective bargaining and the other goals on the GOP's list.
Up to this point, Republicans haven't budged in their efforts to prevent the tax extension and fix collective bargaining, which they say is a big reason local governments are running short of money.
Up to this point, the two sides have not met to resolve their differences.
But now legislative leaders from each party are saying they're ready to deal.
State Senate Majority Leader Steven Horsford, D-Las Vegas, says he is willing to deal with Republicans, but their demands to end things such as collective bargaining and prevailing wage laws are not "realistic."
Assembly Minority Leader Pete Goicoechea, R-Eureka, says he is ready to deal with Democrats, even though he doesn't think they are ready to negotiate.
Although each party's priorities have become clearer in recent weeks, the Legislature's endgame is still a long time away. The 120-day legislative session reaches its halfway point Thursday.
Without compromise, some fear an extended special session is inevitable.
DEMOCRATS SEEK TO WEAKEN GOP RESOLVE
Imes and her friends hope legislators at least will agree to extend taxes approved in 2009 and keep their classes open.
Merrilyn Noble, a nurse from Gardnerville, said campus closure would burden young people, particularly nursing students. Almost all preparatory classes required of nurses -- such as chemistry, math and history -- can be taken on this campus.
She also said people are willing to pay higher taxes to keep the college open.
"It is inevitable," she said. "We can't keep all the advantages of our wonderful community without paying for them. It's the American way."
The students are constituents of state Sen. James Settelmeyer, R-Minden, who is steadfastly against any tax increases.
"If people want services, maybe more should be charged for those services," Settelmeyer said. "This is a college. Maybe there should be tuition increases. We are all going to have to learn to get by on less because we don't have any more to give. I don't know of anyone in Carson City or Douglas County, saying 'Tax me more.' "
The 500 students who attend the Fallon branch of Western Nevada College await the same destiny as the Minden students. Their college also is threatened with closure, and their legislators are the Republican leaders of the Legislature, Minority Leader Mike McGinness and Goicoechea.
The numerous student protests held around the state in recent weeks have been seen as part of a Democrat-backed strategy to weaken the Republican resolve against tax increases.
Last week, Horsford questioned how McGinness can go home and talk to his constituents who realize how damaging closing the campus would be to their community. He said McGinness should listen to his constituents .
"I am listening to my people," said McGinness, R-Fallon. "I am listening to the people who are unemployed, their savings gone. I am listening to people who are struggling to make payroll. It is nasty all around."
McGinness is adamant that Senate Republicans won't break ranks as they did in 2003 and 2009 and give Democrats enough votes to pass about $800 million in tax increases in each of those sessions.
GOP SEEKS COLLECTIVE BARGAINING REFORM
Goicoechea said if Democrats agree to adopt Republicans' five-point reform plan, then Assembly Republicans will vote to reauthorize for two more years the $800 million in tax increases set to sunset on June 30.
Goicoechea said Republicans are flexible on their plan, particularly their goal to do away with collective bargaining by public worker unions. Sandoval himself has said he does not want to do away with collective bargaining.
Laws block collective bargaining by state workers, but since 1969 have allowed it for other public employees.
Under collective bargaining, school districts and local government must negotiate in "good faith" with unions on wages and benefits, layoffs, dismissal and other policies. Critics, such as the conservative Nevada Policy Research Institute, contend the good faith requirement means they always must give something to the unions.
Gary Peck, executive director of the Nevada State Education Association, sees the Republican reform plan as nothing more than a "full-blown frontal assault on collective bargaining." He said the teachers and their union repeatedly have agreed to financial concessions to help schools through the recession.
The call for such reform is sweeping through legislatures nationwide. Ohio's governor recently signed a bill limiting bargaining rights of 350,000 public workers. Wisconsin's governor did the same earlier, but a judge on Thursday held up its enactment. At least a dozen other states are considering similar actions.
"There is going to be no give in our caucus unless they agree to the reforms," Goicoechea said. "Closing these campuses is kind of a threat. It also looks like they (Democrats) are holding our bills hostage. We need to see some movement by them."
Senate Revenue Chairwoman Sheila Leslie, D-Reno, said the continuation of the $800 million in temporary taxes is not enough to fix holes in Sandoval's budget.
Horsford said about half of what he perceives as a $2.5 billion revenue gap should be made up in tax increases. That would be a record $1.25 billion.
"We need the sunsets just to deal with the funny money ($1.1 billion in non-tax revenue plans by Sandoval to fix the budget) in my opinion," Leslie said.
REPUBLICANS VOW TO REMAIN UNITED
Goicoechea said that in past sessions individual Republicans could be bought off by Democrats for a favorable vote on their personal bills, but that won't happen this session unless Democrats adopt most of their reforms.
Those reforms include ending prevailing wages and collective bargaining by public employee unions, privatizing the state health care program for employees, turning state and teacher health care programs over to private insurance companies, and making it easier to fire bad teachers.
He said his caucus has agreed that every Republican will vote no on tax increases, or on reauthorizing existing taxes, until at least nine of the 16 members have given their consent to support tax increases.
Assistant Minority Leader Lynn Stewart, R-Henderson, said the reason Republicans will trade temporary tax increases for their reforms is because the savings on the reforms will be far greater in the long run than the temporary taxes. But he does not have a specific figure on what the reforms would bring in.
Two yes votes by Republicans is all the 26 Assembly Democrats need to achieve a two-thirds vote required to pass tax increases and override a governor's veto.
The task will be more difficult in the Senate, where Democrats hold a 11-10 membership advantage. Democrat John Lee has gone on record against tax increases. That means at least four Republicans would have to vote for tax increases before they could go into effect.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.
What Assembly Republicans want in exchange for extending $800 million in taxes
1. Repeal laws that mandate collective bargaining by local governments and school districts with public employee unions. Assembly Minority Leader Pete Goicoechea, R-Eureka, said his caucus is flexible on this demand and doesn’t want Nevada to turn into another Wisconsin with strife between labor and legislators. The demand also runs afoul of Gov. Brian Sandoval, who asked legislators to ignore a bill drafted by former Gov. Jim Gibbons to end collective bargaining.
2. Privatize the Public Employee Benefits Program, a step they believe would reduce health insurance rates by as much as one-third for state employees. Require the teachers union to bid out the running of its Clark County Health and Welfare Trust, the health care program for teachers in Southern Nevada. They say the later change could save $40 million to $80 million, which should go to teacher salaries.
3. End prevailing wages — generally similar to the union scale pay — on public works projects. They contend prevailing wages add 30 percent to construction costs and cost the state and local governments more than $400 million in 2005-09.
4. Change the laws on construction defects in ways to stop class action lawsuits and limit what lawyers can be paid. Now all homes in a development can be brought into a class action lawsuit even though a defect might have occurred only at one home, they say.
5. Give parents vouchers to send their children to private schools and make it easier to fire bad teachers and send their children to private schools. Require establishment of more empowerment schools. Gov. Brian Sandoval has advocated the same changes.
Taxes the Democrats want extended
1. The nearly doubling of the modified business, or payroll tax that employers pay on each worker. The 2009 Legislature put the tax at 1.17 percent of each worker’s wage. The rate will drop back to 0.63 percent July 1 unless reauthorized by the Legislature. The first $250,000 in a company’s payroll is taxed at 0.5 percent. The higher tax brought the state about $346 million over two years.
2. The 0.35 percentage point increase in the state sales tax rate expires after June 30. Legislators two years ago put the state sales tax rate at 6.85 percent, including an 8.1 percent rate, counting local taxes, in Las Vegas. Unless reauthorized the rate drops back to 6.5 percent statewide and 7.75 percent in Las Vegas. This tax brought in $280 million over two years. All the money went to support public schools.
3. The 10 percent average increase in car registration fees. Raised $94 million over two years.
4. The doubling of the annual state business license fee to $200 a year. Otherwise, the fee would drop back to $100. Raised $61 million over two years.
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Gary,
Nevada has the fewest state employees per capita of any state (we're #50!), and wages for professionals are well below those in the private sector... at least for geologists, environmental engineers, and environmental scientists; you can check other professions by going to the U.S. Bureau of Labor Statistics, and comparing the data with salaries of Nevada State employees.
http://www.bls.gov/oes/
Also, regarding pensions: PERS is a pre-funded program, with employees contributing 20%, taxpayers contributing 20%, and return on investment contributing 60%. Studies have shown that each $1 of taxpayer funding provides more than $6 in economic output in Nevada. That's about as win-win-win as you can get. The guaranteed pension provide security for retirees, who then spend this money to support local businesses. See:
http://www.nvpers.org/public/documentation/2009-EconomicImpactofPERS.pdf
If you are a businessman, I'd worry about the total cuts proposed, because state employees (middle class workers) will have to cut back their spending drastically. I know that I will NOT be going out to eat, NOT going out to see movies, NOT buying new electronics, NOT buying materials for home improvement projects, etc. etc.
State employees have absorbed about 8% pay cuts for the past two years. I think most employees could manage another two years with the current furlough (4.6% pay cut) and increased medical (>130% increase from 2007), but Sandoval's proposals tally up to about a 15% pay cut. That equates to more lost homes and more businesses closing their doors.
How about we tax where the money is, instead of cutting wages of middle-class workers? Did you know that 1% of Americans now control 65% of the country's wealth? The transfer of wealth over the past decade has been from the middle-class to the wealthy: Third-world america is just around the corner.
As usual they always turn everything into a democrat vs republican dog and pony show. This just diverts attention away from the overriding problem. We'd all like to see people learn English, but our forefathers were never offered taxpayer funded language classes, and they learned English just fine. The problem lies with too many government employees receiving 6-figure-salaries, with just as high pensions. Nevada will have to MAN UP, and realize that our heyday is over. SLASH government salaries, and pensions.
I'm so glad the philosophy of keeping taxes low has brought us the business diversification that we see now ....corporations are just pouring over the border to set up shop here....lol
What is the biggist scam forced on the tax suckers?
EDUCATION
I got a great idea,if you pop out a kid,you pay for it,not us smart folk
What part of "Nevada is BROKE" don't people understand??
Our military, law enforcement, and ELECTED OFFICIALS need to HONOR THEIR OATH TO THE U.S. CONSTITUTION!!!
oathkeepers.org
The political pendulum swings, and like the Edgar Allen Poe fictional piece it will be cutting big chunks out of the government. Why, because the government growth bubble has burst, just as the housing bubble burst. The cause of each of these bubbles was in fact cancerous out of control government, and it is only fitting that government get the full treatment that it deserves. The Taxed Enough Already movement is growing, and that movement will be the cutting edge of this operation to cut the cancer out of our government. Folks a political truth is that the power to destroy is in fact the power to rule. The Taxed Enough Already movement has placed its hands on the government’s purse strings, and they do mean to starve the beast, and kill it.
Many GOP legislators already have stated their concerns over plans to close branch campuses in their districts.
NSHE is a *political* institution. It's all about pumping money into voting districts and providing entertainment to sports fanatics who are too cheap to get cable. What does any of this have to do with NSHE's constitutional duty to teach our next generation of applied scientists?
Taxpayers don't care which criminal gang gets the money. What matters to us is making government as small as possible so as to limit our losses. Once again we see how the Republicans are perfectly willing to keep government BIG (and taxes high) just so long as their cronies make out on the deal.
Then they try to make us believe that *we* won because public unions were busted and a voucher program instituted. To us that is irrelevant. We pay the same either way. They must think we're not smart enough to recognize it.
"No new taxes!" is equivalent to "Old taxes good!" We have one-party rule in this state. The COLOSSAL Government Democrats and the MAMMOTH Government Republicans.
The nurse said, "People are willing to pay higher taxes to keep the college open." Hey "nurse," why don't you pay higher tuition to keep the college open? If there is a 9% reduction in state support, raise tuition that much, especially since you unionized, over-paid government employees believe you are worth it. I do not.
Eliminating previous tax hikes makes no sense now. They are already factored into pricing, and raising them later, as will be needed to maintain essential services, will be twice as difficult. They are not 'new' taxes.
Horsford, DO NOT GIVE IN AT ALL! The voters that voted you in are behind you 100%. We won't forget at all.