Saturday's deal falls apart; talks continue

Saturday's tax and budget deal proved so unpopular Nevada lawmakers didn't bother to meet and vote Monday.

The secret plan was based on a business net-profits tax similar to one proposed in an initiative petition two years ago by the teachers' union. It would have taxed 2.5 percent of profits, instead of the 4 percent the union had proposed.

According to Assembly Minority Leader Lynn Hettrick, R-Gardnerville, not only did 15 caucus members who have been holding out oppose the plan, but one or two who voted for earlier tax plans joined the opposition.

"We clearly have 15, at least, Republicans who believe a state income tax is bad," he said.

Hettrick met again Monday with Senate Majority Leader Bill Raggio, R-Reno, to look for a compromise which will end the impasse.

"In general, we're talking about anything we can do," he said.

Hettrick said tax proposals in the original Senate-approved bill are still the best hope.

"We have no problem with the Senate package mix," said Hettrick. "Except that it's too much money. We would be out of here in a minute if we had a plan under $760 million and it didn't have an income tax."

The Senate plan was based on a payroll tax on businesses which Hettrick said puts the tax burden where the demand for government services comes most.

"You need to tax where the impact is generated," he said. "An ATM machine doesn't go to the emergency room and doesn't put kids in the schools. The impact is people."

He said other taxes such as the gross-receipts tax seem punitive.

"In my opinion, some of the proposals are out to punish people for making money," he said.

The plan also included a payroll tax of eight-tenths of a percent and a 3 percent bank franchise fee.