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June 2, 2015

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Damon Political Report

Democrats admit they won’t get taxes, will start cutting funding they had tried to add to Sandoval’s budget

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Sam Morris / Las Vegas Sun

The state capitol is seen on the third day of the 2011 legislative session Wednesday, Feb. 9, 2011, in Carson City.

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In what may be a final acquiescence that they can’t get the Republican votes for a tax increase, joint money committees will begin the process tomorrow of cutting the funds Democrats had tried to add back to Gov. Brian Sandoval’s proposed no-new-taxes budget.

Although negotiations are still ongoing, two Democratic leaders confirmed they have all but given up on convincing Republicans to back either a services or margin tax. The most they now hope to get from Republicans are enough votes to extend the 2009 tax increase in exchange for reforms to collective bargaining, employee benefits and construction defects.

Both sides said the negotiations on that point are going well—at least on the Assembly side.

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Pete Goicoechea

“We’re still talking,” Assembly Minority Leader Pete Goicoechea, R-Eureka, said.

In the Senate, however, Republicans don’t seem ready to budge—even on the 2009 tax sunsets, which they view the same as a tax increase.

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Ben Kieckhefer

“You don’t have the votes in the Senate and you’re not going to get there, no matter what they do at this point,” said state Sen. Ben Kieckhefer, R-Reno, who was seen as a key swing Republican.

According to the contours of an emerging agreement, Democrats would be forced to cut their add backs by at least $250 million. That process will begin tomorrow.

Democrats hope to eliminate Sandoval’s proposals to borrow against future insurance premium tax revenues and to grab debt reserve funds from the school districts.

When it comes to spending, however, they’ll have to find ways to whittle back the $700 million they added to public schools, the $73 million they added back to Medicaid reimbursement cuts and the $100 million they added to higher education.

Democrats had rejected a 5 percent salary cut for school district employees, but may agree to 2.5 percent cuts to help meet the new number.

Even if Democrats win enough votes to extend the 2009 taxes, Sandoval has promised to veto it.

To avoid the veto, lawmakers would have to pass their budget compromise by Friday. That would give them enough time to override the veto before the June 6 close of the session.

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