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June 30, 2015

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The Legislature:

Republicans issue list of demands to be met before they’ll talk taxes

Pete Goicoechea

Pete Goicoechea

John Oceguera

John Oceguera

Assembly Republicans have settled on five sweeping changes to state and local government that their Democratic colleagues would have to agree to before they would consider supporting any tax package.

Assembly Minority Leader Pete Goicoechea, R-Eureka, shared only the broad topics where his caucus wants to see changes. They are:

• Strengthen management’s position in public employee collective bargaining rules.

• Adjust prevailing wage levels on public works projects.

• Implement conservative education reforms, including school vouchers.

• Lessen taxpayer liability for public employee pensions and health benefits.

• Change construction defect law to protect contractors and subcontractors against lawsuits.

“This is part of an endgame,” said Goicoechea, referring to the horse trading expected in any deal on the state budget.

Goicoechea said his caucus won’t consider raising taxes from existing rates, but would under the right circumstances extend taxes passed in 2009 that are scheduled to expire June 30.

Those levies would generate about $700 million, he said.

It’s the frankest talk yet from any legislative caucus on the biggest issue confronting lawmakers — whether to support or oppose Gov. Brian Sandoval’s budget, which closes the $2.2 billion hole without tax increases and while letting those taxes sunset.

To date, the left has declared only that Sandoval’s proposed cuts are too painful and said changes in how Nevada governments work — issues that were used as bargaining chips to attract conservative voters to any tax package — are separate discussions.

Meanwhile, many on the right, including Sandoval, have said they want changes to education, public employee pensions and retirement benefits, but that taxes are off the table.

Conservative interest groups are divided on whether there’s any room to negotiate on taxes. Some want lawmakers to hold fast with Sandoval. Others see taxes as a bargaining chip with which to buy once-in-a-generation change in how government workers are compensated and schools are managed.

If Democratic and Republican lawmakers can bargain, the 2011 Legislature will end like 2009’s — Republicans trying to trade tax votes for reform. Although that idea has floated in 2011’s Carson City ether since before the session, it had been unspoken.

Democrats, as they did in 2009, have spent the opening weeks trying to expose shortcomings in Sandoval’s budget and build a case for why cuts in social services, schools and the higher education system would harm the state.

They have not come out publicly with any specific tax proposals.

Assembly Speaker John Oceguera, D-Las Vegas, said Democrats are talking about some reform. The Assembly heard four education bills proposed by Democrats on Wednesday. Those include extending the teacher tenure period from one year to three years and making poorly performing teachers go on probationary status.

“We’ve said we need serious reforms, serious cuts and long-range planning,” Oceguera said. “We believe some cuts, like in education, are a little too deep and counterproductive to economic development.”

He said Democrats “have not drawn a line in the sand on anything, like (Republicans) have.”

Another Democratic lawmaker, speaking on the condition of anonymity, said the list of demands is “unreasonable” if all they get in return is support for extending the expiring taxes. The revenue raised wouldn’t be nearly enough to undo cuts in schools, higher education or social services.

In 2009, Senate Republicans ran with a list of proposals from the Las Vegas Chamber of Commerce and leveraged that for their votes to increase taxes. Conservatives said changes in pensions, health benefits and collective bargaining approved two years ago did not go far enough.

This time, with the popular Sandoval, who has promised not to raise taxes or extend expiring taxes, and stronger minorities in both the Assembly and Senate, conservatives are reaching further.

Goicoechea said, for example, that on collective bargaining, local governments should be able to open contracts with public workers if tax revenue falls short of projections. He did not call for ending collective bargaining for local workers (state workers in Nevada have never had that right) — the proposal that has caused large protests in Wisconsin.

Assembly Republicans’ position seems in line with the business lobby, which has not ruled out raising taxes in exchange for some of the changes.

The Reno Sparks Chamber of Commerce regularly ends its legislative update by stating, “The Reno Sparks Chamber of Commerce will NOT support tax increases until the following reforms are passed,” — it then lists K-12 and higher education, collective bargaining and retirement benefits.

The Las Vegas Chamber of Commerce is taking a more subtle approach. It released a list of reforms Wednesday, some general and some specific.

The business group’s proposals include:

• Eliminating binding arbitration if employee groups and the local government can’t reach an agreement. The decision would fall to elected officials.

• Allowing contracts to be open in the case of a “fiscal emergency.”

• Increasing employees’ contribution to their retirement.

• Ending retirement health insurance subsidies for new employees.

• Changing how schools are governed so the governor is in charge.

Asked if the reforms are tied to taxes, chamber executive Steve Hill said, “I think right now those are two separate issues.” But, he added, “I don’t deny there’s a possibility that taxes and reforms are linked, potentially, at the end of the session, as some type of compromise.”

Senate Republicans have “discussed briefly” reforms they want to see, said Senate Minority Leader Mike McGinness, R-Fallon. But they have not taken a formal caucus vote on any specifics.

“We’re absolutely still with the governor” on taxes, he said.

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