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May 27, 2015

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Damon Political Report

Senate votes to extend 2009 tax increases, sealing budget deal

Sun Coverage

The Senate voted 15-6 today to pass legislation extending the 2009 tax increases, sending the last major bill implementing a hard-fought budget compromise to Gov. Brian Sandoval.

In a series of speeches before the vote, senators from both sides acknowledged promises made and broken for the good of a compromise that will mean significant cuts to education and government services, but will keep the state running for another two years.

“I didn’t expect to be in the position I’m in now, ultimately breaking the promise I made to a lot of people not to lift the sunsets,” state Sen. Ben Kieckhefer, R-Reno, said before voting in favor of Assembly Bill 561, which will add $620 million to the $6.7 million spending compromise. “I don’t do it lightly. But I believe when the Supreme Court decision came down, the facts that led me to my decision changed and I needed to reevaluate the funds.”

The Nevada Supreme Court decision prohibiting the state from taking local tax dollars was catalyst for the budget compromise, forcing Sandoval to replace $656 million in local revenue by extending the 2009 tax increase - a reversal of his own promise not to do so.

The budget compromise split the Republican caucuses in both houses. The agreement was opposed by Republicans who signed pledges not to raise taxes; and others were unhappy with the policy changes Democrats made in exchange for lifting the sunsets; and some didn't believe the court decision opened such a big hole in the budget.

“Last year I promised my constituents I would not support lifting the sunsets,” said Sen. Barbara Cegavske, R-Las Vegas. “My constituents believed me when I said I would fight for the repeal of the 2009 (payroll tax) increase. I told them if they sent me to Carson City, I would uphold my word.”

Cegavaske, however, stopped short of criticizing the governor or the four Republican senators who voted in favor of the budget: “I fully respect those who changed their position on taxes,” she said.

The same lawmakers who voted against the five spending bills, which received final passage late Sunday, voted against the tax bill.

Although the Democratic majority remained united behind the budget compromise struck by legislative leaders, none appeared happy with the deal.

Sen. Mike Schneider, D-Las Vegas, grudgingly supported it after describing the process as negotiating “with a used car salesman” and leaving with a “clunker.”

Senate Majority Leader Steven Horsford, D-North Las Vegas, acknowledged Democrats also had to back away from their promises to permanently reform the state’s tax structure. “While this is not perfect, it’s necessary for the proper funding of the budget,” Horsford said.

Lawmakers will continue work until final adjournment at 1 a.m. Tuesday. To complete funding the budget, they must pass a bill raising taxes on the mining industry and another sweeping unclaimed casino winnings into state coffers.

Lawmakers also are finishing work on the policy changes Republicans demanded in exchange for supporting the tax extension, including a measure limiting collective bargaining rights and another changing construction defect laws.

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