Friday, June 13, 2003 | 11:13 a.m.
CARSON CITY -- The state Legislature has adjourned and will return June 25 with just six days remaining before the fiscal year runs out on attempts to try and pass a tax plan that funds the state's education needs.
The state Senate followed the Assembly's lead Thursday and adjourned after a tumultuous day filled with messages from legislative leaders to the governor and last-ditch attempts to create an $870 million tax plan that two-thirds of lawmakers could support.
Gov. Kenny Guinn late Thursday night issued a proclamation ending the 19th special session in state history and immediately signed a second proclamation calling lawmakers back for the 20th special session to begin at 8 a.m. on June 25.
"I'm very disappointed that the work of the people of Nevada remains unfinished," Guinn said in a written statement. "Although important efforts by the Nevada Legislature were made, unfortunately the Senate and the Assembly could not agree upon the most important item before them -- funding the education of our children."
If lawmakers do not pass an education budget and the taxes to fund it by June 30, schools face serious problems, including the potential delayed opening of new schools and the inability to hire new teachers in the fastest-growing state in the nation.
After Wednesday's double failure of tax votes in the Senate, the dispute between the houses and parties grew even wider as Democrats urged Republicans to consider a consensus plan crafted earlier in the week.
Instead, the Senate Republicans wanted to forge ahead with work to amend the failed tax bill from Wednesday.
Assembly Speaker Richard Perkins, D-Henderson, adjourned his house indefinitely and stood back hoping the Senate would follow suit and lead Guinn to shut the Legislature down.
Instead, Senate Majority Leader Bill Raggio, R-Reno, pleaded with both Guinn and Perkins for another chance, saying the 13-8 vote Wednesday proved how close his house was to passage of a plan. Fourteen votes are required to reach two-thirds of the Senate.
Shortly after the Assembly adjourned, Raggio brought his house to the floor -- not to work on taxes -- but to pass an ancillary business fee bill and a gaming bill that the governor never authorized the Legislature to consider in the special session.
"We got paid for today, so we're working," Raggio said after the session, in a clear shot at the Assembly's adjournment.
Democratic leaders remained in contact with the Senate throughout the day and recoiled when they learned the compromise the Senate was creating was not what they wanted.
Raggio's plan remained centered on a 1.1 percent payroll tax. An employer would pay the tax on the salaries of each employee up to $21,500.
Democrats favor a franchise tax on business and a 3 percent tax on banks and want the payroll measure to only be a small portion of the plan. Raggio's compromise included a franchise tax, but kept it at only one-third of the total revenue amount generated by the payroll tax. The Senate also rejected a bank franchise tax and went instead with a room tax the Assembly does not like.
Perkins sent a letter to Guinn referencing the constitution's technical provision that allows the governor to dissolve a session if lawmakers cannot reach agreement about the time of adjournment.
"I believe it is in the best interests of the citizens of this state that the Legislature adjourn for a period of time so that we may continue to seek compromise and obtain the counsel of those experts who can help prevent unintended consequences of a revenue plan that will be passed into law," Perkins wrote in his letter, hand-delivered to Guinn by the governor's chief of staff, Marybel Batjer.
Guinn called Raggio into his office to ask whether the opinion in the Senate was similar. Sources tell the Sun the discussion was quite intense with Raggio refusing to give up and assuring the governor he would be able to pass a bill from his house that the Assembly could then amend to its liking.
The governor allowed Raggio to continue, but said he did want serious progress made by today.
As Raggio hunkered down with his caucus, Perkins said he didn't see any movement on the Senate's part.
"We hate the payroll tax and they hate the franchise tax," Perkins said. "The best thing to do is split it 50-50 and make them equal in the tax plan."
But Perkins also said he would not accept any plan that does not tax banks.
"That was loud and clear from the governor in his State of the State address, and residents believe it is the responsibility of banks to begin paying some share to the state's budget," Perkins said. He also lamented the rejection of a compromise plan reached late Tuesday night between Assembly Democrats and Sen. Mark Amodei, R-Carson City.
The plan included a payroll tax, a franchise tax and a bank tax among other levies and was agreed to by "virtually everybody in the business community," Perkins said.
Meanwhile Senate Democrats were looking at Raggio's plan in disbelief and offered an amendment to balance out the franchise and payroll taxes.
Sen. Joe Neal, D-North Las Vegas, emerged from Raggio's office wearing his signature cowboy hat and offering an expletive before marching out the side door of the Legislative Building, not to return.
Sen. Bob Coffin, D-Las Vegas, grabbed his luggage and rolled it down a hall telling his caucus director Lindsey Jydstrup, "I'll see you when we reconvene."
Raggio told the remaining senators what they all knew -- that "in spite of all of the effort, we've been unable to reach consensus on a revenue plan."
"Frankly, at this point we have run out of options and it would make no sense for us to stay in session," Raggio said. Lobbyists began leaving too and said they would be back in two weeks.
After speaking with Guinn and Perkins, Raggio addressed reporters and said lawmakers would "have to get off of hard feelings and try to accommodate."
"If everybody comes over here and takes a hard stand on some principle, it might sound good, but it does not help the state survive and it does not fund education," Raggio said.
Lawmakers were ordered into the special session June 3 after they failed to pass a nearly $2 billion education budget or the tax plan to fund the needed $870 million the state will be short in funding the budget.
Raggio has appeared frustrated since last Saturday, when he brought a tax bill to the floor only to watch Amodei switch his vote and sink the measure by one vote.
Wednesday's two failed votes on a different tax bill were detailed painfully throughout the day as Raggio kept referring to people who switch votes. On Wednesday, the Senate initially agreed 15-6 on a tax plan, but then voted it down 13-8 two times after an amendment was discovered.
The amendment, sought by Sen. Mike Schneider, D-North Las Vegas, and inserted by Amodei would have allowed time shares with gaming licenses to move the license provided they paid increased taxes.
Schneider is a former owner of the Royal hotel-casino in Las Vegas, and is close friends with the current owners who want to move their gaming license.
When the Assembly adjourned Thursday morning, Perkins told his house that "no one person is to blame." Later Thursday, Raggio also said he would not assess blame. Instead, he urged lawmakers to come together.
"We're going to have to start all over again," he said.
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