Legislative leaders found out Friday that, even with the two-thirds majority requirement lifted from their shoulders, it won't be easy writing a tax plan both the Senate and Assembly will support.
The two-thirds requirement for any tax or fee increase is what enabled 15 Assembly Republicans to hold up the tax plan since February. They demanded the budget be reopened and cut before they would support increased taxes.
But the Nevada Supreme Court on Thursday ruled the constitutional mandate to fund public education takes precedence over the two-thirds requirement to raise taxes. In a 6-1 decision, they lifted the two-thirds majority requirement for the specific purpose of resolving this tax-budget impasse.
Even though all that's needed now is a simple majority, Speaker Richard Perkins, D-Henderson, and Senate Majority Leader Bill Raggio, R-Reno, said they discovered that what one house will support, the other won't.
"The major differences again are the insistence on some gross-receipts or net-profits tax by the Democrats," said Raggio as he left the building shortly after 5 p.m.
He said the Republicans will support a payroll tax but object to gross-receipts or a net-profits taxes.
"I've suggested we look at other alternatives to any of those," he said. Raggio declined to be specific about what alternatives are on the table.
The Assembly will reconvene Sunday afternoon and, Perkins hopes, pass a compromise bill for the Senate to consider. The Senate will reconvene Monday.
Senate Bill 6 won two-thirds support in the Senate and is based on a payroll tax. But Sen. Mark Amodei, R-Carson City, said he doubts the Assembly version based on a gross-receipts tax would even win a majority in the Senate.
Perkins said he will propose "what I would term a compromise plan between gross receipts and payroll."
That proposal includes both taxes, but at reduced rates.
"We're meeting in the middle," he said. "Is anyone doing back flips? No. But I think it's a good compromise."
Perkins, like Raggio, said he would keep working to develop a plan two-thirds of each house can support.
Several legislators said Friday's three-hour closed-door meeting made it clear no one has changed their minds.
"We've offered everything we can think of, " Sen. Ann O'Connell, R-Las Vegas, said. "But no, it's gross receipts."
Assemblyman John Marvel, R-Battle Mountain, said he thinks they need to drop both the gross receipts and payroll tax from the list of options.
"There are other things out there," he said, pointing to a real-estate transfer tax, a tax on selected services, and "even a sales tax."
Sen. Randolph Townsend, R-Reno, said the charge a payroll tax doesn't reach certain high-profit, small manpower businesses could be handled by lifting the cap on a payroll tax.
The proposal, as it stands now, would cap the payroll tax at the federal unemployment wage level -- currently $21,500 a year. Removing that cap would generate millions more by applying the tax to everyone's entire salary.
Sen. Ray Rawson, R-Las Vegas, said other tax ideas are in the mill.
"Everything's being discussed," he said.
