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Assembly’s override puts tax package into law

Tax increase of $390 million a year resurrected after governor’s veto

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AP Photo/Brad Horn, Nevada Appeal

Nevada Gov. Jim Gibbons speaks at a press conference before vetoing bills at the Capitol in Carson City on Thursday.

Updated Friday, May 29, 2009 | 11:33 a.m.

Gibbons vetoes tax bills

Gov. Jim Gibbons holds up AB552 and SB433 after he vetoed the bills on the Capitol steps in Carson City at the Nevada Legislature on Thursday, May 28, 2009. Launch slideshow »

Beyond the Sun

CARSON CITY – By a vote of 29-13, the Assembly has overridden the veto of Gov. Jim Gibbons and put into law a $390 million-a-year tax increase to balance the state’s $6.9 billion biennial budget.

Assemblywoman Sheila Leslie, D-Reno, said the Legislature should “not turn its back on the citizens” in public education, the university system and health programs.

But Assemblyman Richard McArthur, R-Las Vegas, said this was the wrong time to raise taxes, adding that it would lead to more layoffs.

The Assembly vote completes the override and puts the bill into law. The Senate passed the bill on a 17-2 vote Thursday night.

The Assembly also voted 38-4 to override the governor’s veto on Senate Bill 433 that gives furloughs to state workers of 12 days a year. The road was 38-4. Gibbons had recommended that the employees take a 6 percent pay cut. But the Legislature decided to impose unpaid furloughs instead of reducing the pay.

Also approved was Senate Bill 431, which provides money from federal and other funds for the agencies and programs. The $6 billion is provided from a variety of taxes and other sources.

The tax bill will provide a 0.35 percent increase in the sales tax for the next two years.

The bill changes the tax on businesses which are now 0.63 percent. For businesses that have a payroll of more than $62,500 per quarter, their tax would rise to 1.17 percent. For those less than $62,500 per quarter, their rate would drop to 0.5 percent. That will be effective July 1.

It also includes an increase in the business license tax from $100 to $200 a year.

The bill also raises the governmental service tax imposed on autos and trucks starting in September to collect $94.3 million over the next two fiscal years.

Assembly Speaker Barbara Buckley, D-Las Vegas, said without taking these actions, funding for UNLV and UNR would have dropped by 50 percent; there would be a $690 million drop in funding for public grammar and high schools and there would have been a major decrease in the staff of the state Gaming Control Board to oversee the gambling industry.

She said Republicans and Democrats worked together to come together with these solutions to fund these agencies. It isn’t like Washington, she said, where Democrats and Republicans don’t work together.

Gibbons, in his veto message Thursday, said he made a promise a long time ago there would be no new taxes.

"The Legislature has chosen to waste their time and your money creating a budget filled with a billion dollars in new taxes that will hurt every single person in this state," the governor said.

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