Even die-hard Republican opponents of tax hikes are seeing lifting of the sunsets on taxes approved by the 26th special session as inevitable in the wake of the Supreme Court ruling in a Las Vegas water case.
The current budget was balanced in part by sweeping up the $62 million collected by the Clean Water Coalition in Southern Nevada. But the coalition and M Resorts sued saying to take that fund would be unconstitutional. The high court Thursday agreed.
But the broadly written opinion has raised significant concerns it also would apply to other funding the governor's proposed budget would take including school district bond reserves, Clark and Washoe counties property taxes and the IP1 room tax revenue.
Altogether, the governor's office says that blows a $656.7 million hole in the proposed budget.
Asked whether the state can avoid lifting the sunsets - which would generate $679 million - Senate Minority Leader Mike McGinness, R-Fallon, said, "probably not."
Sen. Mike Roberson, R-Las Vegas, said as a lawyer, "the ruling appears to be fairly broad" and could take the entire $650 million.
"I haven't heard anyone suggest how we can cut $650 million from this budget," he said.
But Roberson refused to say he would support lifting the sunsets.
"We're analyzing the situation, then we're going to punt," said Sen. Dean Rhoads, R-Tuscarora.
Barbara Cegavske, R-Las Vegas, a long time opponent of any tax increases in the state, didn't rule it out saying, "we have to look at every option."
But one Senate Republican said the Democrats will have to agree to some meaningful reforms - particularly to education - in trade for the two-thirds vote needed to lift the sunsets.
On the Democratic side, Peggy Pierce of Las Vegas said even with the revenue from lifting the sunsets, the governor's budget "is still a lot of damage."
Paul Aizley, D-Las Vegas, said everyone on his side of the aisle was counting on something to get the governor to back removing the sunsets.
"Extending the existing taxes is the balanced approach we were looking for," said Senate Majority Leader Steven Horsford, D-Las Vegas.
He said other parts of the puzzle are still in the mix including what deductions the mining industry should be allowed and which should not.
Assembly Speaker John Oceguera, D-Las Vegas, said the talks with Republicans and the governor were very productive. He said despite expectations, "I didn't see a lot of gimmicks today."
