Las Vegas Sun

March 29, 2024

Constitutional crisis looms

After meeting Sunday night with Republicans to try to break the legislative deadlock over a tax plan, Assembly Speaker Richard Perkins said this morning: "We made some significant progress. It was the best discussion we have had all session.

Perkins, D-Henderson, met with Gov. Kenny Guinn this morning "to bring him up to speed" on the negotiations.

But Perkins would not say what, if any, points had been agreed upon. Talks would continue through the day, he said.

Legislators have until midnight to pass a tax plan and funding for K-12 public schools.

Friday night, Perkins had called for what could have been the final vote for the state's largest-ever tax increase, a motion that would have eliminated an $860 million budget deficit and set critically needed funding for the public schools.

The vote came one vote short of the two-thirds majority needed. For five long minutes, Perkins kept the vote open. Three times he called for a change of vote from any one of the 15 Republican Assembly holdouts. His pleas were met with silence.

The effort to pass a school budget and tax increases were not over, however. Republican and Democratic caucus met over the weekend. Parties leaders met with each group and with individual legislators. But as of Sunday night, the result was the same.

Perkins and others said there is hope that a first-ever constitutional crisis -- the Legislature failing to approve a mandated budget by the beginning of the fiscal year -- can be avoided.

"We've got discussions going on, said Assemblyman Lynn Hettrick, R-Gardnerville, who is the minority floor leader. But the bottom line for Hettrick and the other holdouts is that the tax increases included in both the Senate and Assembly bills would hurt the state. However, even their Republican brethren call the increases moderate

"We think taxes have a detrimental effect on the economy," Perkins said. "There has been an attempt to reach a compromise and today was better than yesterday. There are talks going on. Nobody is jumping to anything, but at least they are talking about making things happen."

Perkins told the Assembly on Sunday night that talks have been "somewhat fruitful, but no proposals or breakthroughs are ready to be unveiled.

His options are limited. Guinn has already signed the budget for most state agencies into law, and has thus far refused to open the budget back up for cuts.

The only budget left for the Assembly to pass is the public schools budget, and school officials statewide -- and nowhere more than in Clark County -- are facing their own crises as they lose time and teachers. School officials say they may be forced to close classrooms.

Today would be the day for action or failure, Perkins reminded his colleagues over the weekend.

Today "is the last day of the fiscal year, and the last day we have to complete our work.

The issue, according to Senate Majority Leader Bill Raggio, R-Reno, was "highly likely" to to end up in Supreme Court. Attorney General Brian Sandoval and Guinn, both Republicans, have reminded party colleagues that the Nevada Constitution requires the Legislature to fund the budget it approved and to fully fund education.

A huge part of the impasse springs from another part of the constitution: a 1996 requirement that all tax increases pass by a two-thirds majority of both the Senate and Assembly.

If the holdouts get the budget re-opened, legislators in both the Senate and Assembly promise that the rural counties -- represented by most of the holdouts -- will feel the biggest bites of the budget cuts.

Potentially on the chopping block for rural areas are $8 million for mental health programs, $1.8 million for the 13 Nevada Division of Investigations positions recommended for elimination by Guinn but replaced by the Legislature, funding to preserve failing rural school systems and programs for seniors and more than $40 million in program and capital improvements.

Perkins said the proposed cuts by the GOP -- cuts that Hettrick responds are "reductions in enhancements"-- include slashing of funding for the University and Community College System of Nevada and human services, Medicaid and welfare.

The Republican holdouts have not been specific publicly, but have said they will accept a little more than $700 million in new taxes -- $164 million less than the proposed Assembly package and about $200 million less than Guinn's proposal.

Perkins said the Democratic caucus has discussed a number of the proposals, but does not agree that those cuts should be made.

Asked about the progress, Perkins said, "It comes and it goes. Instead of characterizing it as day to day, I would characterize it as hour to hour. You get optimism and then you get dashed. You get optimism and you get dashed again. So it's a matter of catching it at the right moment in time."

Guinn has steadfastly indicated, at least in public, that he will not consider deeper cuts.

But Hettrick said there are signs "that he would consider a bill at $704 (million) in new taxes. You have got to remember we have $704 million and $100 million from the feds in new money. We're at $704 (million) plus $100 million."

The court may try to force a solution beginning Tuesday, but the issue is not likely to go away soon.

Repercussions could carry through the next election. Lobbyists for some of the most powerful interests in the state are fuming that the session, the school budget and the tax package -- which now has broad support from the gaming, mining and real-estate development sectors -- remain unfinished. They are privately promising political recompense during the next election.

Billy Vassiliadis, a major lobbyist for gaming and other interests, said he does not want to threaten anyone. But he is clearly unhappy with the holdouts.

"If these guys don't fulfill there constitutional responsibility, that means a lot of new faces up here," he said.

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