Las Vegas Sun

March 29, 2024

Legislature hangs on

CARSON CITY -- After two more failed attempts to reach a compromise on a tax plan, the state Legislature considered adjourning its special session today.

The Assembly was meeting late this morning and the Senate was expected to meet soon after.

Some lawmakers, including Senate Minority Leader Dina Titus, D-Las Vegas, had already left the capital before today's action. A late attempt by the Senate to reconsider the tax plan today garnered little support.

Assembly Speaker Richard Perkins and Senate Majority Leader Bill Raggio met late this morning to discuss gavelling the special session and returning later this month to complete work on a tax plan of about $870 million and the state education budget.

The meeting came after a tumultous day of activity Wednesday in the state Senate which saw a tax plan fail twice.

The failed votes on tax plans in the Senate on Wednesday left lawmakers far apart so the leaders talked about returning closer to the end of the month to complete their work.

A tax proposal died Wednesday night in a 13-8 vote, one vote shy of the needed two-thirds.

Gov. Kenny Guinn had talked to the leaders of both houses and left the adjournment decision up to them.

Perkins and Raggio had met separately with Guinn on Wednesday evening to report no progress was being made.

"I explained to him I thought we were getting farther apart than closer," Perkins said after his meeting with the governor.

Perkins spoke with Raggio early today to report he wanted to shut down the session. Raggio countered by saying he thought he could still pass Senate Bill 5, the measure that twice failed Wednesday.

The bill came from a compromise plan, reached late Tuesday night between Assembly Democrats and Sen. Mark Amodei, R-Carson City.

The plan includes a payroll tax of 0.6 percent rate which was used to replace the business license tax. The plan also has a franchise tax applied on business gross revenue based on a sliding rate scale. It also has a 3 percent financial institutions tax and a 0.10 percent tax on live entertainment.

The live entertainment tax applies to admissions, food and beverages. However arenas with more than 5,000 seats do not have to pay the tax on their food and beverages.

The plan also includes increased levies on cigarettes, liquor, slot route operators, gaming, real estate transfers and business filing fees.

Raggio said the Assembly could simply amend SB5 and the two leaders could work out differences in conference.

But Perkins said any amendments to SB5 in his house would cause him to risk losing the four Republican yes votes he already has. In addition, Perkins said Wednesday he felt "completely turned around" because the compromise he had helped craft was never considered by the full Senate.

In a second meeting this morning, Perkins asked Raggio to vote on the compromise plan and send it down the hall to the Assembly for consideration.

Guinn told his staff he had wanted lawmakers to remain at work in the capital despite the setback in the Senate, where a tax bill failed to reach the two-thirds majority by one vote on two separate attempts.

But the Assembly and Senate can concurrently resolve to end the session on their own.

"They will have to make a decision. I took the time limit off," Guinn said. "They have to make up their minds."

If legislators call it quits, Guinn said he would call them back into session before the end of the fiscal year, which ends June 30.

The bill to provide $1.6 billion in state aid to schools over the next two years hasn't been passed. That needs to be approved before June 30 so the state can start distributing the money.

The theatrics in the state Senate on Wednesday left even veteran lawmakers and lobbyists saying they had never seen anything like it.

The fatal votes on an $866 million tax plan actually took root before the end of the regular session June 2.

Sen. Mark Amodei, R-Carson City, had been working with Sen. Mike Schneider, D-North Las Vegas, on a trade-off.

Schneider wanted an amendment on a tax bill to allow time-share properties to move gaming licenses across the county in exchange for paying more in taxes. In exchange for Amodei's help putting that into a bill, Schneider was ready to back Amodei, the Senate president pro tem, in a bid to raise the gross gaming tax and impose a room tax.

That never materialized by June 2, but it proved the end of the tax plan Raggio thought he was about to pass from his house Wednesday evening -- the sixth working day of the special session.

Before that occurred, the Senate Republicans rejected a compromise plan reached between Assembly Democrats and Amodei late Tuesday night.

As Perkins waited on a counter-offer, Republicans were instead drafting their own bill.

When the bill reached the Senate Committee of the Whole just before 4 p.m., Assembly Democrats were furious.

Titus spoke in opposition of the plan because it had thrown out the compromise proposal's franchise tax and bank tax. In its place the Senate relied solely on the payroll tax that the Assembly hates.

Titus took a shot at Amodei by saying: "I'm not as smart or articulate as my colleague, the lawyer from Carson City, but I came to this session prepared to pay for a broad-based business tax."

One by one, her Democrats broke with her saying they simply wanted to move the bill over to the Assembly, or wanted to go home.

"Since I'm not like others who are financially able to stay here till hell freezes over, I don't want to stay here," Sen. Joe Neal, D-North Las Vegas, said.

Schneider said that while he didn't like the proposal, he viewed it as "a good floor plan" that could change in the Assembly.

Sen. Bob Coffin, D-Las Vegas, mentioned slight changes between the Assembly and Senate on cigarettes, liquor, room and bank taxes, but failed to note the lack of a franchise tax on business as a difference between the houses.

"Frankly, I don't see a great deal of difference," Coffin said as Titus shook her head in amazement.

The measure passed 15-6, with Maggie Carlton, D-Las Vegas; Barbara Cegavske, R-Las Vegas; Warren Hardy, R-Henderson; Ann O'Connell, R-Las Vegas; Sandra Tiffany, R-Henderson, and Titus, opposed.

The Senate convened in its chambers about 30 minutes later to vote on the package as the full Senate, and not just the committee.

What appeared to be a procedural formality suddenly went south as Titus worked the room before the vote.

"Is your language in here?" she asked Schneider, who shook his head as if he was not sure.

After the motion was made to pass the tax bill, Titus asked if the time-share language had made it into the bill. After Legislative Counsel Brenda Erdoes said it was and pointed out the section, an angered Titus asked: "How did that get in the bill?"

Amodei said the amendment was simply one the Republican caucus agreed to include. "What else is in this bill that hasn't been discussed?" Titus asked.

That upset Coffin, who had been lobbied all afternoon by Michael Gaughan of Coast Casinos, a client of the senator's who disliked the high amount gaming would have to pay under the Senate's tax plan.

"I was unaware this was in here," Coffin said. "It's totally irrelevant."

Although others pushed to pass the plan, Titus kept up the pressure, noting that the time-share language would allow an unrestricted gaming license to move anywhere in the county -- even outside of the gaming enterprise districts that lawmakers had set aside in past sessions to prevent the continued growth of neighborhood casinos.

The ensuing vote was 13-8 with Coffin and Sen. Valerie Wiener, D-Las Vegas, joining the original six no votes and killing the measure.

Neal immediately rose to rescind the vote and called to amend out the time-share language.

As the amendment was being readied, Assembly Democrats swarmed over Coffin and Wiener trying to keep them in the no column. Schneider spent some of the waiting time yelling at Titus on the floor.

Thirty minutes later when the amendment was printed and the vote was taken again, it had the identical result -- failure by the exact same tally.

Schneider, who helped develop the time shares at the Royal hotel east of the Strip in Las Vegas, is friends with the current owners who want to move the license and open a new property. Schneider said he sold his interest in the Royal two years ago and thought Titus exposed the amendment simply to make him look bad.

"She's (ticked) because I voted for this to get it into play," Schneider said of his vote in committee. "Now we don't have anything in play."

Coffin said he kept his no vote even after the time-share language was removed, because: "When you see a 200-page bill and all of a sudden a surprise is put in there, you haven't seen God's green earth. This whole process is about trust."

He said the increased levies on the gaming industry had nothing to do with his opposition.

"I don't care what they like," Coffin said.

If lawmakers do disband the special session, they will have to return in a new special session -- the 20th in state history -- to pass a tax plan and education budget by the end of the fiscal year June 30.

Guinn said the two sides now appear focused on a payroll tax in the Senate and a franchise fee in the Assembly. "Both areas fit the criteria for me," he said. He said the lawmakers are "pretty close on the ancillary taxes," on such things as cigarettes, liquor, entertainment and real estate transfer taxes.

The governor said the 10 to 11 bills that he will ask the session to pass could wait until the end of the month.

The only ones he will include on the agenda, he said are those that passed but got hung up before the regular session closed June 2.

If no K-12 education budget is in place by June 30, schools will face serious trouble, Clark County School District spokeswoman Joyce Haldeman said.

"All the planning that goes into starting the school year, hiring teachers or opening schools is on hold," Haldeman said. "This is absolutely no way to recruit and attain quality teachers."

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