Tax battle heads for court as negotiations collapse

For the first time in state history, the legislature's primary tax -- balancing the budget -- is headed for the Nevada Supreme Court.

Sunday's "fruitful" discussions degenerated Monday into bickering and charges of bad-faith bargaining, ending any hopes the Assembly would find a compromise tax package.

A frustrated and depressed Speaker Richard Perkins, D-Henderson, adjourned the Assembly, saying it is "inexcusable we haven't fulfilled our constitutional obligation."

"It's impossible to reach a compromise when the other side won't tell you what they want," he said, referring to Minority Leader Lynn Hettrick, R-Gardnerville, and his core of 14 other GOP members blocking a two-thirds vote on any tax plan. "To try have a compromise, I've got to have somebody negotiating in food faith."

The GOP tax hard liners have refused to approve $860 million in new taxes to fund the full state budget, including public education. The rest of the budget has been signed into law.

But the school funding can't be approved unless taxes to fund it are also passed, and the Assembly GOP block has refused to do so, demanding cuts in the rest of the state budget instead. Lawmakers have said they would fund no more than the $704 million Gov. Kenny Guinn said was absolutely necessary to fund existing programs for the next two years.

Perkins was hopeful Sunday night, saying they had made substantial progress. He said talks with three members -- Rod Sherer of Pahrump, David Brown of Boulder City and Chad Christensen of Clark County -- seemed close to breaking the impasse.

Then Hettrick told him they would have to take the issue back before their caucus.

After that, none of the three were willing to vote for a tax plan Perkins said was cut to $783 million.

"We've compromised every step of the way," he said. "We even offered to allow people to write their own accountability language, but it's always been a moving target -- if you satisfy one concern, it's another."

"They never proposed a single cut of any magnitude, and voted for 95 percent of that budget in committee," he said. "They never brought a tax plan to the table."

Hettrick held a news conference earlier to deny that the Republican tax hard liners were holding up the process.

He said the group has presented numerous proposals and offered a compromise.

"We have a clear offer on the table that is fair, that funds education, and that is good for Nevada," he said. "The ball is in their court."

But when asked for his list of potential cuts and compromise demands, Hettrick refused, as he has every day for more than a week, to release a list to the press. While he said earlier he had such a list, he denied a list exists Monday.

He said the GOP would support $704 million in tax increases as long as that list doesn't contain a gross-receipts tax on business.

Perkins said he believes there was no way to get a compromise: "The only answer seems to be 'It's our way, or the highway.'"

"It's shameful that here we are three hours from the next fiscal year, and we have not fulfilled our constitutional obligation," he said.

And he warned that allowing the issue to go to the Nevada Supreme Court is setting a dangerous precedent.

At the other end of the building, Senate Majority Leader Bill Raggio, R-Reno, said litigation should only be an absolute last resort.

"I think it would be very, very difficult to achieve a result that is in the best interests of the state if it has to go to litigation because, as a lawyer, I can tell you litigation takes strange turns," he said.

Guinn said he has no choice but to ask Attorney General Brian Sandoval to file a petition for a writ of mandamus at the Nevada Supreme Court. He made arrangements to do that at one minute after midnight when the Legislature became officially in violation of the mandate to fund education.

"I have taken this action in hopes of compelling the Legislature to meet its constitutional responsibility to fund education for the children of this state, " Guinn said.