Raggio calls leadership meeting Saturday

Legislative leaders will meet behind closed doors Saturday to try to get past the hard-line positions preventing a deal on a budget and tax plan for Nevada.

"Our focus should be on a solution rather than this litigation," said Senate Majority Leader Bill Raggio, R-Reno, referring to Gov. Kenny Guinn's request to the state Supreme Court to order the Legislature to balance the budget.

Raggio called for the meeting with Assembly Speaker Richard Perkins, D-Henderson, Senate Minority Leader Dina Titus, D-Las Vegas, Assembly Minority Leader Lynn Hettrick, R-Gardnerville, and other key members of the Legislature.

He said one of his concerns is the long-term effect of any decision the Nevada Supreme Court might make.

"The Supreme Court could do great damage to the separation of powers in this state," he said.

Raggio said everybody must drop their hard-line stance and come to the meeting willing to find a compromise to resolve the battle.

"I want it to be completely open. We have to get all the interests together and find a solution."

He emphasized the meeting will be behind closed doors and that lobbyists aren't welcome either.

Hettrick said Thursday he thinks they can get past the issue of how much money the tax package raises by giving the governor the flexibility to move money within the budget.

As demands for services such as welfare and Medicaid decrease in response to economic recovery, it would reduce the demand for new tax revenues, he said. The governor could adjust other parts of the budget as well to reduce total spending about 3 percent without significant damage to any one program.

Hettrick said giving the governor flexibility makes it unnecessary to impose a list of budget cuts on the executive branch.

The moves would mean the major issue remains disagreement over a franchise tax on gross business receipts versus a payroll tax. Guinn has said he will sign either version if lawmakers can agree on a plan.

The Senate reached a two-thirds majority by basing their tax plan on a payroll tax. A gross-receipts tax, said Sen. Mark Amodei, R-Carson City, wouldn't win two-thirds support in the Senate.

Charging businesses 1 percent of the first $21,500 paid each worker would raise more than $400 million over the next two years. It would also be easy to impose almost immediately and require few if any additional staff at the Department of Taxation.

Republican supporters of the plan say a payroll tax paid by businesses on each employee hits hardest at the businesses which have the most employees. Since people generate the need for governmental services, they argue that puts the tax burden on those who create the demand.

But it would hit the gaming and retail industries hardest, and those enterprises are pushing Assembly Democrats to back a gross-receipts tax instead.

Perkins says the payroll tax isn't broad-based because it doesn't reach high-profit businesses with a small number of employees. He also said it won't pass the Assembly. Members there have called for a version of the gross-receipts tax along with a percentage tax on bank profits.

The business tax would generate more than $200 million and the bank tax another $14 million.

The gross-receipts tax is designed with 17 tiers, charging from $120 a year at the bottom end to $28,000 a year for the biggest resorts and other businesses -- significantly less than those major resorts would pay under the payroll tax.

The tiered business tax would also require most of a year to implement and, according to Taxation Director Chuck Chinnock, more than 45 additional employees.