Assembly tax plan emerging

CARSON CITY -- The Legislature on Monday began moving forward on parts of a plan to fund the state budget, passing a tax hike on businesses and a money grab from Clark and Washoe counties through the state Assembly.

Lawmakers also met late into the night to reach accord on other aspects of a revenue deal.

The two bills increasing state revenue that passed by large majorities in the Assembly on Monday afternoon would double the annual fee businesses pay and requisition some property tax revenues from the two urban counties.

Despite the easy passage of the two measures, the overall plan to patch a $1 billion budget hole was far from a done deal.

The centerpiece of the tax plan -- increases in sales and payroll taxes -- had yet to be presented for a vote late Monday, and Republicans and Democrats were at odds over the details of labor-management reforms that the Republicans are demanding in exchange for their votes for tax hikes.

Lawmakers hope to pass the budget package by Thursday so that they have time to override a promised gubernatorial veto before the June 1 end of the 120-day session. Closed-door meetings that continued late into the night Monday served notice that this week will be a marathon to meet that deadline.

The bills that passed the Assembly on Monday were the first steps in bringing in the revenue the state will need to fund the approximately $6.8 billion in spending already approved.

Assembly Bill 146 doubles the $100 fee businesses pay each year and requires businesses with multiple locations to pay the fee on each storefront. It would bring in an estimated $72 million over the next two years.

The bill passed by a vote of 33-9, with five Republicans joining the 28 Democrats in the majority.

"I think it's time to encourage businesses, not to impose further costs upon them," said Assemblyman James Settelmeyer, R-Gardnerville, who voted against the bill.

Republicans Melissa Woodbury, Pete Goicoechea, Heidi Gansert, Joe Hardy and Lynn Stewart voted in favor of the tax hike.

Assembly Bill 543 takes away portions of property tax revenue that currently go to the coffers of the state's two urban counties, amounting to 9 cents per $100 of assessed valuation.

Though the counties have been critical of the bill, which enables the state to take in an extra $150 million without raising taxes, it passed by a vote of 37-5 with no discussion on the Assembly floor.

Republicans Ty Cobb, Ed Goedhart, Don Gustavson, Richard McArthur and Settelmeyer were the nay votes.

The two bills now go to the state Senate, where Democrats hold a 12-9 majority.

Impeding further progress on the budget package Monday was the fact that lawmakers appeared to reach an impasse on the details of labor-management reforms Republicans are demanding as a condition of their votes in favor of tax hikes.

The reforms to public employee retirement and health benefits, collective bargaining and prevailing wage laws are being hashed out in private, with no bill yet introduced to implement them. Assembly Majority Leader John Oceguera, D-Las Vegas, and Sen. Warren Hardy, R-Las Vegas, have been negotiating on behalf of their respective parties.

Hardy said the reforms are mandatory for the Republicans, whose votes are needed to get to the required two-thirds supermajority on taxes in the Senate.

"We have no votes for a tax package without these reforms, zero," he said. "Call it a quid pro quo, call it whatever you want, but until the reforms are done and agreed to there is not much to talk about in terms of taxes."

Hardy, who serves as president of a building industry association, said he and Oceguera, a firefighter, had reached accord on the major issues. But when Oceguera brought the proposals back to the Democrats, some parts were rejected. He wouldn't go into specifics but said the disagreements involved the Public Employees' Retirement System.

The proposed reforms would increase the minimum age and number of years for government workers to start collecting retirement benefits; the question is how much, sources say.

"We took a couple of steps backward," Hardy said Monday evening as he headed into another negotiation session.

Oceguera said Republicans are holding up the tax vote by making the reforms a condition. "We're not tying one to another," he said. "We're not making any quid pro quo of budget to bills. In their opinion, it's tied to it; in our opinion it's not."

He said that there were "three or four things still holding us up" and that others might have to be brought into the negotiations because he and Hardy were "stalemated."

Though the details are bedeviling, Oceguera said, both parties agree on the big picture.

"We're negotiating in good faith," he said. "Everybody's pleased with the direction we're going."

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