Casino industry tells Legislature: No dice

CARSON CITY -- The Nevada gaming industry refused Thursday to pay higher taxes or fees to help balance the state budget, a just-say-no stance that could derail Democratic plans to raise enough extra revenue to avoid deep cuts to education and social services.

In public, the Senate and Assembly on Day 3 moved ahead in a rush to adjourn the special session this weekend if possible.

Lawmakers in both houses overwhelmingly approved a "sweep" of agency trust fund accounts, picking up $197 million to put into the general fund budget to help close an $887 million gap.

Assembly leaders also announced the Clark County School District had agreed to give the state $25 million from a capital bond fund to reduce the number of teachers that will be laid off. School officials had said as many as 2,300 could lose their jobs.

District Chief Financial Officer Jeff Weiler said Thursday he was unaware of any "agreement that had been reached."

But he said the district has used a part of the government services tax to make small capital improvements. The state could take back the district's government services tax revenue, which is worth about $25 million annually. The government services tax is paid by consumers when they register their vehicles.

Overall, the Democratic-led houses accepted only about half of Gov. Jim Gibbons proposed cuts, which would slash most state agencies by 10 percent.

The developing Democratic plan has added back more than $200 million in spending, including restorations to social services. The plan limits to 5 percent the state funding reduction to higher education and the K-12 system.

On the revenue side, Democratic leaders Thursday secured an agreement with the mining industry to contribute another $100 million in revenue, but the deal was not yet on paper or approved in detail.

Tim Crowley, president of the Nevada Mining Association, told the Las Vegas Review-Journal the industry agreed to increased fees on mining claims to raise $20 million and to pre-pay $15 million to $20 million in taxes. Also, the industry expects on March 1 to report $62 million more in proceeds that will go to the state's general fund.

But the gaming industry strongly rejected a plan put forward by Assembly Speaker Barbara Buckley, D-Las Vegas, to pay $32 million a year in fees to support its Gaming Control Board regulation.

The Nevada Resort Association issued a statement Thursday night saying it could not "reach consensus among its statewide membership" to support the Democratic proposal. The group, which represents the state's largest casinos, cited a $6.7 billion net loss in fiscal year 2009 and nearly 34,500 in layoffs during the same period.

"We gave blood before and have given blood time after time," said Billy Vassiliadis, a lobbyist for the association, referring to tax and fee hikes the industry has been subject to since 2003, when the gross receipts tax rate rose to 6.75 percent.

But lawmakers insisted there will be blood.

"We are not done," Senate Majority Leader Steven Horsford said in response to the announcement. "Gaming must participate."

Earlier Thursday, Horsford, D-Las Vegas, and Senate Minority Leader Bill Raggio, R-Reno, held a conference call with gaming executives. Also, Buckley met privately with gaming lobbyists in her office to make the case that the Democrats' budget-balancing plan could rise or fall on the gaming industry's cooperation.

Without gaming pitching in, the Democratic plan could fall tens of millions of dollars short of balancing the budget.

As lawmakers ground away, Gibbons added some drama to the day by making a surprise visit to the Legislature. He met for an hour with the Republican leadership, including 20 minutes with Raggio, with whom he has been feuding.

"I won't accept any tax increase unless it is agreed upon by just about everybody," the Republican governor said, repeating his pledge not to OK taxes or fees unless industries such as gaming and mining agree.

Meantime, the minority Republicans in the Assembly introduced their own budget-balancing plan, which resembled Gibbons' proposals in large part and received his tentative support.

"While there are still matters to be worked out, there is far more the governor finds acceptable," Gibbons spokesman Dan Burns said.

Raggio, who is key to achieving any veto-proof budget deal in the Senate, said his GOP caucus hadn't reviewed the Assembly plan.

The longest-serving senator has approved past tax increases that Gibbons vetoed, and Raggio has said he would accept more revenue from the mining and casino industries if they sign on to the plan.

"I sense a real desire to work together the rest of this session," Raggio said of Republicans and Democrats, though he said a deal isn't done yet. "Obviously we don't have an accord here among ourselves."

At least two of the nine Republicans in the Senate and all 12 Democrats must go along with any revenue-raising plan for it to survive a Gibbons veto. It takes a two-thirds vote in both houses to overturn a veto.

The minority GOP Assembly plan rests in large part on raising $91 million by borrowing against the state's unclaimed property fund.

Republicans are relying on $62 million from mining that would come in the form of taxes the industry already pays.

For gaming, the Republicans are asking the Nevada Gaming Control Board to raise another $4.2 million by increasing the investigation fee for licensees from about $80 to $115 per hour.

The plan includes 7.5 percent cuts to higher education and K-12.

The Republicans' decision to release the plan upset Democrats on the floor of the Assembly who complained it contained numbers that weren't meant to be made public, such as the possible $25 million contribution from a Clark County School District building fund.

Republicans also want the Legislature to change state law to make collective bargaining with workers subject to open meeting law.

In the Senate, members began the day by agreeing to draw up a bill sought by Gibbons to put most state agencies on a four-day, 10-hour a day workweek starting in July. The proposal was estimated by the administration to save the state about $12 million.

By law, most state offices must be open from 8 a.m. to 5 p.m. Monday through Friday. The bill will make the workweek 7 a.m. to 6 p.m. unless agencies request and receive exemptions from the state Board of Examiners, headed by Gibbons.

On Friday, Buckley said the Assembly will take up the bills on state worker furloughs and adjustments to state government operating hours.

Review-Journal reporter James Haug contributed to this report. Contact reporter Laura Myers at lmyers@reviewjournal.com or 702-387-2919. Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901. Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.