Gov. Brian Sandoval, general counsel Lucas Foletta, center, and chief adviser Dale Erquiaga work Tuesday May 31, 2011, at the Capitol in Carson City, Nev. After morning meetings with the Senate and Republican caucuses, Sandoval said talks were continuing and he remained optimistic a budget compromise could be reached. (AP Photo/Cathleen Allison)
A budget deal one insider described as 99 percent done stalled Monday night and Tuesday as Republican lawmakers dug in their heels over construction defects reform.
"We're getting really close," said Assembly Speaker John Oceguera, D-Las Vegas.
The change Republicans want on the surface seems simple. Current law provides for attorney's to be able to bill for fees in a construction defects case. The amendment would provide "reasonable attorney's fees to a prevailing party ... if an independent basis for such an award exists." The amount would be up to the judge.
Assemblyman Ira Hansen, R-Sparks, himself a plumbing contractor said he has been dragged into several construction defects cases. He said the change in Assembly Bill 285 is a simple and minimal change.
But a lawyer in the Legislative building who does not specialize in those cases described that change as "a deal breaker" for the trial lawyer's association.
Assembly Minority Leader Pete Goicoechea, R-Eureka, said several weeks ago construction defects reform was his "hill to die for."
Hansen presented a sheaf of letters from dozens of contractors and subcontractors asking for legal changes to stop "frivolous" lawsuits.
A veteran lobbyist said he doesn't think the Democrats can support the change in AB285. Oceguera said homeowners have been hit with falling values and the recession.
The budget negotiations made significant progress Monday, resulting in Democrats voting to approve significant changes in Nevada's education system and collective bargaining.
AB225 and AB229 are both strongly supported by both parties, although members of the Democratic caucus in the Senate weren't happy doing so.
Between the two, they let school districts to consider ability and performance - not just seniority - when laying off teachers and other educational professionals. They create a system for evaluating teachers based at least half on student achievement and putting them back on probationary status if they get two years of negative evaluations. It also makes it easier for districts to terminate teachers who aren't performing.
The measures create a performance pay system for teachers as well.
Senate Education Chairman Mo Denis, D-Las Vegas, said there has been a lot of time spent on the two measures
After that work, he said, "we've come to something we can call a base to our reforms."
Gov. Brian Sandoval has said throughout the 2011 Legislature reform, particularly in K-12 education, was his priority.
By late Monday, it appeared Sandoval and legislators had resolved most of their differences on the total spending amount - although they refused to provide details with Sandoval saying he wasn't going to jeopardize negotiations by revealing the details of each side's positions.
When the construction defects issue reared its head, Sandoval headed for the Legislative Building Monday morning and met with first the Assembly then the Senate Republican caucuses seeking enough GOP backing to pass the budget and necessary funding proposals with broad support, not just a two-thirds majority.
Lifting the sunsets on tax hikes approved during last year's 26th special session is the key to covering the shortfall between the governor's budget augmented by Democratic add-backs and the revenue left after deducting some $656 million in local money seemingly taken from the pot by last week's Supreme Court ruling in the Clean Water Coalition case.
The court ruled taking the $62 million was unconstitutional. But the ruling was written so broadly that legal counsel has warned it also impacts plans to take other local money including property taxes from Washoe and Clark, school district bond reserves from those same counties, the Indigent Accident Fund, Initiative Petition 1 room tax money. Altogether, those funds made up $656 million in the current and proposed budgets.
Both sides have been saying the gap between Democrats and the governor's office was $313 million. They gave no clear idea how that number was reached but it appeared to approximate the difference between the estimated $968 million Democrats have added to the governor's recommended budget and the $656 million the sunsets would generate.
For their part, Democrats want their proposed transactions and business margins tax proposals put before the voters who, they believe, will back them.
They also want changes to taxation on the mining industry, which they have argued all session has escaped paying its fair share in a time when they are making billions from Nevada's gold. The plan would either remove or cap deductions miners are allowed to take on the net proceeds of mines tax in the short term and, remove some of the industry's tax protections from the Nevada Constitution in the long term.
Plans to meet and try finalize the deal were stalled Tuesday because Goicoechea was in Elko attending his mother's funeral. He was scheduled to return to Carson City but late Tuesday, most likely canceling those meetings until this morning.
