Tax increases saved as lawmakers override Gibbons’ vetoes

CARSON CITY -- A $781 million tax hike to fund state government for the next two years became law over Gov. Jim Gibbons' objection Friday as the Assembly joined the Senate in overriding Gibbons' veto.

Also enacted despite a gubernatorial veto Friday morning were bills containing some of the $6.8 billion in spending that the tax hike was needed to fund, including legislation to pay state workers while forcing some to take unpaid furloughs, and legislation to authorize expenditures for the next biennial budget.

The state Assembly voted to override the vetoes by the required two-thirds margin, joining the Senate, which had voted on the overrides Thursday night.

Five vetoed bills must still be overridden to complete the budget. The Assembly completed overrides on four of them Friday morning but the Senate had not yet acted on them.

Neither house has taken a vote to override the veto of the bill funding the public employees' benefit program, while the Senate also still must act on bills taking property taxes from Clark and Washoe counties, funding general appropriations, funding K-12 education, and changing the sales tax collection allowance.

The budget overrides were being held up as leaders of both houses bargained over other bills' fates, sources said.

But Senate Majority Leader Steven Horsford, D-Las Vegas, said there was no doubt that the remaining budget overrides would get done, pointing to the Senate's quick work on the first three overrides Thursday night.

"We've had discussions about a list of bills we plan on voting on," he said. "There are some key policy bills out there."

The budget override votes Friday marked the near-conclusion of the confrontation between governor and Legislature that has made for an unusual legislative session.

Confronting a shortfall of nearly $3 billion between expected revenue and the money required to maintain state services, legislators decided early on that the $6.2 billion budget proposed by the governor in January was too austere.

The fiscal crisis was "an experience none of us ever imagined just two years ago," Assembly Speaker Barbara Buckley, D-Las Vegas, said from the floor Friday morning in a speech praising the body for its work.

"We couldn't cut our way out of the crisis; we couldn't tax our way out of the crisis," Buckley said. "We had to use what we as Nevadans value, our common sense. We had to govern for the good of our constituents and not by platitude."

Lawmakers knew from the beginning that if they planned to raise taxes they would have to override a promised gubernatorial veto. Thus the frenzied pace and round-the-clock sessions that normally mark the last days of the 120-day session came a week and a half earlier as legislators left enough time in the calendar for the veto and override.

The final compromise combined more than $1 billion in cuts to services with about $1 billion in tax hikes. Federal stimulus dollars and taking revenue from other sources, including county governments, bridged the rest of the gap.

The taxes included a $220 million increase in hotel room taxes enacted early in the session with Gibbons' blessing and the $781 million package of temporary increases to four existing taxes enacted by veto override Friday.

The votes for the veto overrides on the tax bill were the same as for the bill's passage, 17-4 in the Senate and 29-13 in the Assembly, with only Republicans voting no in both houses.

"This is just the wrong time to raise taxes," Assemblyman Richard McArthur, R-Las Vegas, said from the floor. "It's going to lead to more layoffs and more businesses closing. We need to realize that without the business community and the private sector, there would be no government sector -- no one to pay for it."

McArthur said lawmakers were putting off hard decisions on spending that will re-emerge in even uglier form when the Legislature reconvenes two years from now.

Several Assembly Republicans said they supported the spending in the budget but not the particular tax increases being used to pay for it, particularly the payroll tax.

"Although I never totally reached accord as far as the type of revenue we needed, I do support and worked with colleagues on both sides of the aisle to develop a budget that will ... at least sustain essential services," said Assemblyman Pete Goicoechea, R-Eureka.

In addition to the remaining budget veto overrides, legislators must consider whether to override a flurry of other Gibbons vetoes in recent days. With 20 vetoes Thursday alone, Gibbons' 41 vetoes in 2009 have set a state record.

Assemblywoman Sheila Leslie, D-Reno, said from the floor Friday that legislators would not be trampled by the executive branch.

"We don't live under a dictatorship," she said. "We also don't live under a monarchy. One person does not get to decide our state's destiny. We do."

The tax override got the votes of all 28 Democrats in the Assembly as well as Republican John Carpenter of Elko.

The authorization bill override passed the Assembly 37-5, with Republicans Chad Christensen, Ty Cobb, Ed Goedhart, Don Gustavson and John Hambrick against. All had voted for the passage of the original bill.

The employee salary and furlough bill passage was 38-4, opposed by Cobb, Goedhart, Gustavson and Richard McArthur. Hambrick had voted against the original bill but voted for the override.

Legislators wrapped up before 5 p.m. Friday and planned to work through the weekend to finish by Monday's end-of-session deadline.

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