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Legislature finishes quietly

CARSON CITY — Ending on time for the first time in a decade, the Nevada Legislature early this morning concluded its biennial session with little drama, having finished its major piece of business — the budget — a week and a half ahead of time.

Legislators spent the last day of the 120-day session debating and passing a last set of bills, some of them over the veto of Gov. Jim Gibbons, who set a new mark this year by vetoing more bills, and having more vetoes overridden, than any governor in state history.

Lawmakers late Monday overrode a veto to approve a bill to force Las Vegas and the state Department of Transportation to reopen F Street in West Las Vegas, a priority of Senate Majority Leader Steven Horsford, D-Las Vegas.

The cost of the project is estimated at $25 million to $70 million. Horsford said the street closure reminded residents of the historically black neighborhood of their isolation under segregation.

The vote to override was 29-13 in the Assembly and 17-4 in the Senate, exceeding the required two-thirds majority.

Also Monday, legislators approved a bill to allow Washoe County to raise fuel taxes to pay for road improvements and for greater disclosure of state investments in Iran, both over Gibbons’ objections.

The Washoe measure had been approved by voters, but Gibbons said he thought that the ballot language was confusing and that people might not have known they were voting for a tax increase.

A priority for Senate Minority Leader Bill Raggio, R-Reno, it was overridden by a margin of 20-1 in the Senate and 35-6 in the Assembly.

Lawmakers also gave final approval to a bill granting state workers some collective bargaining rights, excluding talks on wages or other economic matters. Critics said AB395 ran counter to Nevada’s status as a right-to-work state, while unions viewed it as a major step toward getting broader negotiating rights for the employees.

A last-minute maneuver to revive part of an indoor smoking bill succeeded late Monday. The plan to roll back a voter-approved smoking ban so that tobacco trade conventions are exempted was amended into AB309, which deals with the crime of stalking. The change was approved by the Assembly and the Senate and now goes to Gov. Jim Gibbons for final approval.

But a bill to create a special rainy day fund for K-12 education, backed by Assembly Speaker Barbara Buckley, D-Las Vegas, did not survive its veto. Though the Assembly had voted to override, the Senate upheld the veto on a party-line vote.

The Assembly adjourned sine die at 11:56 p.m. without acting on a bill to start some of the federal government’s Real ID requirements for driver’s licenses, which the American Civil Liberties Union and privacy advocates oppose.

The Senate adjourned sine die at 12:25 a.m.

Lawmakers also spent much of the day giving long tributes on the Assembly and Senate floor to colleagues forced out by term limits, underscoring the relative whimper with which this most unusual legislative session was coming to a close.

In a closing oration from the floor around 10 p.m., Horsford praised his colleagues for having the courage "to move toward ‘yes’ when ‘no’ was a much easier option." At a time of "unprecedented" economic difficulty, he said, the Legislature "kept the fabric of our state together."

Horsford cited the bill, passed over a veto on Sunday, creating domestic partnerships for gay and straight couples, and his own initiative to create "green" jobs, as major achievements of 2009.

But it was the construction of the budget that he said marked the major triumph.

"We maintained our faith in the future despite the odds stacked against us," Horsford said. "When Governor Gibbons announced that his solution to our $2 billion budget deficit was to decimate both K-12 and higher education budgets, the Nevada Senate said no. It meant making sacrifices, but we protected teacher salaries, classroom funding, special education funding and scholarships for students to attend in-state universities. We did what the people of Nevada wanted us to do. We had the courage to make the right decisions, and we kept our faith in the future."

Across the building in the Assembly, Majority Leader John Oceguera, D-Las Vegas, a firefighter, put it in terms he acknowledged might seem overly dramatic.

"For the last 120 days, we’ve been dealing with an economic inferno," he said. "And we had to put out that fire. It wasn’t pretty, and it wasn’t easy, but we did so to save lives."

BROUGHT TOGETHER

From the beginning, the story of the 2009 session would be the story of the budget.

The plight of the national and state economies meant tax revenues were coming in far below the amount needed to maintain state government. By one measure, the state’s budget shortfall of 30 percent was the nation’s worst.

Gibbons presented his proposed budget in January, and it drew criticism from legislators on both sides of the aisle. The governor proposed a 6 percent cut to salaries of state employees and teachers as well as cuts to benefits. He called for cutting nearly $500 million, 36 percent, from higher education.

Gibbons vowed to veto any tax increases beyond the $220 million tax hike included in his budget. That increase in hotel room taxes was approved by voters in Clark and Washoe counties, making it acceptable to Gibbons.

The Democratic leaders of the Senate and Assembly didn’t roll out a counter-proposal and start a campaign for a package of new taxes. Instead, they proposed a series of hearings on the various sections of the budget.

Gibbons ridiculed the Democrats’ schedule as a "plan to have a plan" and accused them of secretly plotting tax hikes.

There was truth to the accusation. The last month of the session was dominated by closed-door meetings of the leaders from both parties, negotiating a deal on taxes, spending and related issues while publicly claiming nothing was settled.

A DIFFERENT SCHEDULE

Knowing that Gibbons planned a veto of any legislative tax plan meant planning to override the veto. That led to an altered schedule for the end of the session. Lawmakers had to get their tax bill to Gibbons far enough in advance to give him the time allotted by the constitution to act on the bill.

So it was Friday, May 22, at 5 p.m., that legislators targeted for passage of the budget and taxes. To those involved in this session, that was the real "sine die," the Latin phrase for the end of the legislative session.

The easy part was approving the spending. There was broad agreement on most of the cuts proposed by Gibbons that lawmakers wanted to restore.

Legislators passed along to school districts the equivalent of a 4 percent cut to teacher salaries. Most other state workers would be required to take 12 unpaid days off per year, reducing their salaries 4.6 percent.

In higher education, the legislators restored about $300 million to Gibbons’ proposals, cutting 12.5 percent from the system’s budget.

Then came the debate over how to pay for the spending.

Republicans, whose votes were needed to get to two-thirds, said they would vote for tax increases only:

• If they were accompanied by a package of reforms to public employee pensions, long sought by business interests.

• If the tax increases didn’t exceed the seemingly arbitrary target of $780 million over two years.

• If the increases were in existing taxes, avoiding the creation of new tax sources.

• If the tax increases expired after two years.

The week leading up to the deadline, legislators worked almost literally around the clock. One night featured a Senate hearing that went till 4 a.m. Horsford invoked a rule that required senators to come to the floor or be taken into custody, leading Republicans to accuse him of trying to bully their votes out of them.

At 4 p.m. on May 22, Horsford gave in on the sunset clause. The Senate passed the tax bill. It was whisked to the Assembly and passed quickly.

A strange scene followed as a legislative staffer, trailed by a pack of journalists, strode across the courtyard with the bill, arriving in Gibbons’ office at 4:30 p.m.

VETO MANIA

Gibbons waited the five allotted days, then imprinted the tax bill and seven spending bills with a bright-red "VETO" stamp on Thursday.

Legislators knew Gibbons would veto their budget, but they did not expect the flurry of other vetoes over the past week.

Gibbons has vetoed 41 bills, breaking a 140-year-old record: Previously, the most vetoes in a single session was 33 by the state’s first governor, Henry Blasdel, in 1864-65.

It had been 20 years since the Legislature had overridden a gubernatorial veto. But Gibbons’ relationship with the Legislature has been one of mutual antagonism and little communication, lawmakers on both sides of the aisle have said. And so there has been little compunction about overruling Gibbons.

As of late Monday evening, legislators had overridden 25 of Gibbons’ 41 vetoes. Blasdel, previously the state’s most overridden governor, was overridden 10 times.

Lawmakers overrode vetoes on three bills Monday. They also upheld some vetoes, a total of 11.

Once the legislative session ends, Gibbons has 10 days to act on the bills still outstanding. He is expected to boost his veto total.

WHAT THEY DID

In the final tally, legislators approved $6.86 billion in state spending for the next two years.

That’s about on par with the $6.8 billion budget approved in the 2007 legislative session. But between June 2007, when that budget was approved, and the two years of its implementation, a cratering economy produced plummeting tax revenues, forcing Gibbons and legislators to revise spending downward.

Thus, actual general fund spending over the previous biennium was only about $6.3 billion.

According to the latest projections, released last month, existing tax sources will bring in just $5.5 billion over the next two years. That is including a $220 million increase in hotel room taxes recommended by Gibbons and approved early in the present legislative session.

To maintain current levels of state services such as prisons, Medicaid, K-12 and higher education would cost $8.4 billion, according to the governor’s budget office.

The cost increase is explained mainly by inflation, growing caseloads for services, and the state’s constitutional responsibility to make up for lost local tax revenue used to pay for education.

To make up the nearly $3 billion resulting shortfall, legislators relied on about $350 million in federal stimulus dollars; more than $1 billion in cuts to worker salaries and state programs; an additional $781 million in temporary tax increases; and other revenue sources, such as a raid of property tax revenue from Clark and Washoe counties.

The tax increases, which go into effect later this year, are the following:

• The tax on business payrolls, currently 0.63 percent for non-financial institutions, drops to 0.5 percent on the first $250,000, then rises to 1.17 percent above $250,000 annually. Raises $346 million.

• The sales tax, currently a minimum 6.5 percent statewide, increases 0.35 percent. Clark County’s base rate is 7.75 percent. Raises $280 million.

• The vehicle registration tax, currently levied on a value that depreciates to 85 percent after a year and 10 percent per year thereafter, down to a $6 minimum, changes to 95 percent after a year and 10 percent per year thereafter, down to a $16 minimum. Raises $94 million.

• The annual business license fee, currently $100, doubles to $200. Raises $61 million.

Review-Journal capital bureau chief Ed Vogel and The Associated Press contributed to this report. Contact reporter Molly Ball at mball@reviewjournal.com or 702-387-2919.

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