Thursday, July 10, 2003
Copyright © Las Vegas Review-Journal

Justices to rule on impasse today

Senate chief wants more budget talks Friday

Senate Majority Leader Bill Raggio, R-Reno, wants legislative leaders to meet Friday and work out a tax and spending agreement that the entire Legislature can pass this weekend. Raggio said the Legislature, not the Supreme Court, should decide how to balance the state's two-year budget. Photo by Amy Beth Bennett.

CARSON CITY -- The Nevada Supreme Court will announce at 2 p.m. today how the legislative stalemate on record tax increases and spending should be broken.

In a news release issued Wednesday, justices gave no sign of what they will announce. Legislative leaders have speculated all week that the court will order them to resume the second special session and devise a tax and spending compromise.

"It is really an unprecedented court case, and the opinion of most of the attorneys has been the court will accept jurisdiction and order the Legislature to go back into session," said Assembly Majority Leader Barbara Buckley, D-Las Vegas, a lawyer. "Only the folks on the court know what the court will do."

Senate Majority Leader Bill Raggio said that legislators, not the Supreme Court, must settle the tax and spending dispute.

"It is important we do it on our own," said Raggio, R-Reno, a lawyer. "We should not be directed by the court."

Regardless of the court action, Raggio wants legislative leaders to return Friday to Carson City and craft an ironclad tax and spending compromise that the entire Legislature can approve quickly.

Assembly Speaker Richard Perkins, D-Henderson, wants Raggio to hold the meeting in Las Vegas.

If legislative leaders can agree on a tax plan Friday, Raggio said it would be drawn up and passed by the entire Legislature as early as this weekend.

The regular session of the Legislature ended June 2 without an agreement, and the first special session closed June 12. Legislators went home July 1 when they failed again to obtain the constitutionally required two-thirds support to increase taxes.

Guinn then filed a lawsuit against the Legislature in which he charged members with violating their constitutional duty by failing to approve a balanced budget by July 1, the start of the fiscal year.

Legislators have not approved a bill appropriating $1.65 billion to fund public schools over the next two years or one that would increase taxes by more than $860 million. Unless budget cuts are made, such a tax increase is necessary to balance the state's $4.9 billion budget for 2003-05.

Raggio said no tax plan that includes a gross receipts or net profits tax will receive two-thirds support. But his demand to exclude those taxes could doom chances of success.

"That is back to the 'My way or no way' approach," said Senate Minority Leader Dina Titus, D-Las Vegas.

Perkins called the gross receipts tax a "sticking point" from which his party will not budge. He said the tax would not hurt small businesses because it would amount to $10 on each $10,000 in revenue.

"The gross receipts tax catches the out-of-state based companies that escape paying taxes in Nevada," he said.

Unless Assembly Republicans relent, Perkins doubts the meeting can achieve its purpose. He said that leaders met Saturday and that he thought they had reached a compromise.

"Then (Assembly Minority Leader) Lynn Hettrick broke the agreement," Perkins said. "I have tried to make compromises, but all they do is sit back and say no."

Hettrick, R-Gardnerville, could not be reached Wednesday.

Earlier, he said he never committed to a compromise Saturday but said he was "guardedly optimistic" about the $803 million tax increase proposal that came out of that meeting.

On Monday, he said that Assembly Republicans can support no tax increase of more than $760 million over the next two years and that he unequivocally opposes gross receipts and net profits taxes.

No tax proposal is perfect, and legislators need to agree on one that can secure the required two-thirds vote, Raggio said.

"There are all kinds of people out there protecting their turf," he said. "Everybody wants a tax that somebody else pays. That's the hard fact."