Cathleen Allison / Nevada Appeal
Saturday, May 23, 2009 | 2 a.m.
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Senate Republicans scored a resounding victory here Friday, winning a set of concessions from Democrats that they have been demanding for months in exchange for agreeing to a $780 million tax increase.
Indeed, in the past four months, Republicans in the state Senate were often the only legislators here openly acknowledging the need for new taxes, and all along they said they would agree to a tax package only under certain conditions.
Led by Senate Minority Leader Bill Raggio, R-Reno, and their chief negotiator, Sen. Warren Hardy, R-Las Vegas, they said they wanted significant long-term savings in public employee benefits; a tilt toward management in the rules governing collective bargaining for local government employees; sunset clauses on any tax increases so they would go away after two years; increases in existing taxes only and not the introduction of new taxes; and a study to look at tax reform in 2011, though not one tilted toward any specific tax.
Republicans got all of it this week in the bill that passed both houses and now sits on the governor’s desk.
This development wasn’t surprising. Democratic Majority Leader Steven Horsford, D-Las Vegas, in his first term as leader, had very little leverage.
He and his fellow Democrats could not abide the budget of Gov. Jim Gibbons, the Republican whose spending plan was balanced with a 6 percent pay cut for teachers and state workers and a 36 percent cut in higher education.
But any tax increase would require 14 votes in the Senate out of 21, or two-thirds, to override the expected veto by Gibbons. That meant capturing at least two Republican votes.
Although Republicans had also criticized Gibbons’ budget as unworkable and draconian, capital observers expected Raggio, a Senate lion for more than three decades, to use his caucus votes for leverage.
And he did.
Raggio had a significant advantage: Time was not on Horsford’s side.
The Legislature’s 120-day session ends June 1. Gibbons can delay acting for five days after the Legislature sends him a final budget. To get the bill back in time to override the Gibbons veto, legislators needed a deal by 5 p.m. Friday.
When the final bill finally passed, legislative staff ran it across the courtyard to the governor’s office, where it awaits his veto.
Earlier in the week, with prodding from the Las Vegas Chamber of Commerce, Republicans won key concessions that will reduce the long-run costs of public employee benefits, while giving a bit more leverage to local governments in their collective bargaining negotiations with local government unions.
Friday, as the clock ticked down, Republicans secured the final provisions they had sought, most significantly the sunset provision.
By placing a sunset on the $781 million in taxes, which include increases in the payroll tax and the sales tax as well smaller increases in business license and other fees, Raggio will force Democrats in the Legislature to return to Carson City in two years to deal with another fiscal crisis and make more difficult choices on taxes and spending.
Sen. Bob Coffin, D-Las Vegas and chairman of the Taxation Committee, said the sunset provision, which he at one time favored, would create a more than $1 billion hole when the Legislature reconvenes in 2011.
In many respects, Horsford’s back was to the wall. Any failure to win an alternative to Gibbons’ budget would have been viewed as a significant failure of leadership.
Raggio, meanwhile, never faced a similar test on whether he would allow the tax bill to blow the deadline, possibly jeopardizing the spending package they passed, which Raggio called “bare-bones.”
Most of Friday afternoon, Horsford and Raggio were in a stalemate. They had settled the public employee benefits and collective bargaining changes. The only two pieces remaining were the sunset on taxes and an interim commission to study the tax structure.
Raggio offered an amendment to put a firm two-year sunset on most of the tax package. It failed on a voice vote.
An alternative amendment by Sen. John Lee, D-Las Vegas, would sunset the taxes in two years only if the revenue was there to fund the budget. It passed on a party-line vote.
Raggio said he wanted a hard sunset.
Sen. Warren Hardy, R-Las Vegas, called Lee’s amendment a “convenient way to get around the issue.” He said, “I can’t support a tax package without a true sunset.”
At 3 p.m., they were stuck.
A Democratic Assembly member exclaimed, “We need the (expletive) bill.”
Mike Hillerby, former chief of staff of Gov. Kenny Guinn and now a lobbyist, said at 3:10 p.m., “I’m not sure there are the votes in the Senate until someone blinks.”
He came out of a meeting with legal staff, carrying an amendment containing the two-year sunset that Raggio wanted.
“I care more about this state, my children’s education, than scoring internal political victory,” he said.
The amendment also included an interim commission that would examine the state’s tax structure.
Raggio stood and said he appreciated the amendments, but he still wanted more. He was unwilling to give Horsford even the small victory of control over the form of the interim commission and what it would study.
“I was just handed this amendment, and I would like to recess so we can look at this in caucus,” Raggio said. He said the portions of the bill establishing the commission appeared to include language about specific taxes.
Horsford tried to save the interim commission, by committing to work with Raggio on clarifying the commission’s purpose.
Raggio insisted on recessing, and with Coffin shouting “No, no,” Lt. Gov. Brian Krolicki, the president of the Senate, banged the gavel.
Raggio and the rest of the Republicans returned about 10 minutes later.
Raggio said he wanted a tax “study that was credible.” He would not support Horsford’s amendment, unless the commission language was removed — to be reintroduced later in a separate bill.
Horsford again relented. He said he would delete the provision.
The bill passed the Senate 17 to 4. The governor received the package at about 4:30 p.m., a half-hour before the Legislature’s self-imposed deadline.
Of the nine Republicans, five — a majority of the caucus — voted for it.
It was their package, after all.