Compromise on budget still sought

Lawmakers and the governor's office met into the night Saturday to find compromise on a plan to resolve the state's budget crisis.

Both the Senate and Assembly were scheduled to return to work today, processing bills in advance of Monday's deadline to act on non-exempt bills and continue leadership meetings with the governor's office.

While both legislative leadership and Gov. Brian Sandoval agree lifting the sunsets on taxes passed in the 26th special session is the key to covering a potential $657 million hole in the budget caused by Thursday's Supreme Court ruling, other elements sought by both sides still were in play.

The governor's office has made it clear they will not back the sunsets without approval of reforms - in particular in K-12 education. That includes elimination of bumping rights when teachers are laid off so school districts can decide who actually loses a job instead of laying off those teachers with the least seniority and longer probationary periods for teachers among others

Senate Majority Leader Steven Horsford, D-Las Vegas, said he still is pushing restrictions on the deductions mining can use to lower the amount they pay the state in net proceeds of mines taxes.

He also said he wants to put tax proposals presented by the Democrats on the ballot for voters to decide. The proposals include a transactions tax on services and a margin's tax on business activity to replace the Modified Business Tax.

Businessmen have repeatedly said the MBT is a damper on economic recovery because it penalizes businesses for adding more staff. While few like the idea of being taxed numerous businessmen have said the margins tax is preferable to the MBT.

"I believe voters should have a say in having a broad-based tax that's equitable," said Horsford.

The governor's plan to get the Clean Water Coalition ruling clarified hit a snag Saturday after Attorney General Catherine Cortez Masto sent Sandoval a letter saying there is "no procedural mechanism to request clarification" of the opinion issued Thursday.

That opinion said the state can't constitutionally take the $62 million from the coalition because to do so would constitute special legislation impacting just one county. But the broadly written opinion cast doubt on whether the state can take other local funding included in the proposed budget.

Those funds include: the 9 cent property tax from Washoe and Clark counties for $83.5 million, the school bond reserves from Clark, Washoe and several other counties for $247.4 million, the Indigent Accident Fund for $38.4 million and the IP1 room tax money for $225.4 million.

Altogether, those revenues total $656.7 million during the biennium.

Best case scenario, senior policy advisor Dale Erquiaga said the state would just lose the $62 million. Worst case, he said the state would lose the entire amount and, without guidance, he said the governor would have to assume the worst because "the governor does not believe in budgeting with money we don't have."

Despite the attorney general's ruling there is no mechanism to seek clarification, there is at least one circumstance in which the Nevada Supreme Court has been asked to do so. Federal courts have on a number of occasions asked the state's high court to explain their intent in an opinion.

Several Republicans including Sen. Greg Brower, a former U.S. Attorney for Nevada, said Masto could at least ask the court for some explanation and, if they refuse, so be it.

Sandoval's senior policy advisor Dale Erquiaga said Friday without clarification the administration basically assume the worst

The sunsets neatly offset the amount the state stands to lose, generating what the budget office estimates at $679 million.