Geoff Dornan/Nevada AppealFlanked by legislative leaders, Gov. Brian Sandoval announces they have an agreement on the state budget. From left, Assembly Minority Leader Pete Goicoechea, R-Eureka, Senate Minority Leader Mike McGinness, R-Fallon, Senate Majority Leader Steven Horsford, D-Las Vegas, Sandoval and, partially hidden, Speaker John Oceguera, D-Las Vegas.
Even the deteriorating weather couldn't wipe the smiles from Gov. Brian Sandoval and legislative leaders as they announced a budget deal Wednesday.
"The agreement represents historic reforms in education, collective bargaining, public employee benefits and construction defects," said Sandoval, surrounded by more than 40 lawmakers in the Legislative building. "It also balances the state budget, includes no new taxes and partially extends sunset taxes by only two years."
He said it is also the first time in history that Nevada's biennial budget actually goes down to a total less than the previous budget.
That $500 million decrease, however, counts not only general fund dollars but federal, highway fund and other dollars that have reduced because of the recession or from cuts to matching funds needed to maintain federal grants.
Primarily using $620.5 million generated by lifting the sunsets on tax hikes from the 26th special session, the agreement funds a $6.24 billion General Fund budget for the coming two years.
The negotiations were kick-started last week by Thursday's Supreme Court ruling which said taking the Clean Water Coalition money was unconstitutional because it was a special act impacting just one governmental jurisdiction. While the money totaled just $62 million, legal advisers warned that other local funds taken in the recommended budget increased that hole to more than $656 million.
One longtime observer said the ruling was a a Godsend forcing Democrats and Republicans to sit down at the table and compromise
"I don't think anybody got what they wanted," said Assembly Minority Leader Pete Goicoechea, R-Eureka, of the deal.
"This wasn't an easy process," said Senate Minority Leader Mike McGinness, R-Fallon. "And I can't say I didn't holler at anyone at the table."
The big change, Sandoval said, is the elimination of the modified business tax on 70 percent of Nevada businesses. Businesses spending less than $62,500 a quarter on payroll, currently pay a half percent of that. Particularly for small businesses, operators have testified repeatedly that is a serious disincentive to hire more employees.
"They will no longer pay the MBT," Sandoval said.
But the sunset that would have dropped the 1.17 percent MBT on bigger businesses back to 0.63 percent is lifted for the next two years - generating $298 million of the total added revenues.
In addition, the mining claims fees that exploration companies said would seriously damage their ability to stay in business were lifted, one of Goicoechea's biggest issues.
"I believe common sense has prevailed in Carson City," said Senate Majority Leader Steven Horsford, D-Las Vegas.
He said the budget plan "responsibly funds our schools and positions Nevada for success."
