THE TWENTY-SECOND DAY
Carson City (Wednesday), July 16, 2003
Senate called to order at 4:01 p.m.
President Hunt presiding.
Roll called.
All present.
Prayer by the Chaplain, Pastor Albert Tilstra.
O God, we ask that You shed the light of Your presence within the
minds and hearts of Your servants in this place of responsibility and decision.
That all who sincerely seek the truth may find it, and finding it may follow
it, whatever the cost, knowing that it is the truth that makes men free.
When we have the truth, let us not hit each other over the head
with it, but rather use it as a lamp to lighten dark places in order that we
may see where we are going. This we ask in Your Name.
Amen.
Pledge of allegiance to the Flag.
Senator Raggio moved that further reading of the Journal be dispensed with, and the President and Secretary be authorized to make the necessary corrections and additions.
Motion carried.
MOTIONS, RESOLUTIONS AND NOTICES
Senator Raggio moved that the Senate resolve itself into a Committee of the Whole for the purpose of considering a bill draft request with Senator Raggio as Chairman and Senator McGinness as Vice Chairman of the Committee of the Whole.
Motion carried.
IN COMMITTEE OF THE WHOLE
At 4:16 p.m.
Senator Raggio presiding.
Bill draft request considered.
The Committee of the Whole was addressed by Senator Raggio; Senator Rhoads; Gary L. Ghiggeri, Senate Fiscal Analyst; Senator Titus; Senator Mathews; Brenda Erdoes, Legislative Counsel; Senator Carlton; Rick Combs, Deputy Fiscal Analyst; Senator Washington; Senator Townsend; Senator Cegavske; Senator Care; Senator Schneider; Senator Rawson; Senator Nolan; Senator Neal; Senator McGinness; Senator Coffin; Senator Amodei; Senator Hardy and Senator Tiffany.
Senator Raggio:
As the Chair has indicated, we have spent many weeks
on this process trying to reach an accord on the tax revenue plan and have made
little progress. Even though the Court has not ruled one way or the other, it
is the Chair’s suggestion that we continue to adopt a tax plan in this House
that will accommodate a two-thirds vote in both Houses. Unless there is an
objection, that would be the goal the Chair would set in discussing any of the
proposed measures we have today.
As a Committee of the Whole, our efforts have considered a number
of plans. We have reached a point in which it now appears that any revenue plan
containing a component of either gross receipts tax or a net profits tax will
not reach the level of a two-thirds vote acceptance. On the other hand, we are
aware that there is very little, if any, support across both Houses for any
plan that contains a payroll tax or an employer tax.
Over the past several days, we have had discussions with the
majority in the other House. As a consequence of the plan we were presenting,
which contained a payroll, or employer tax, they proposed a concept which did
away with either a gross receipts, or franchise tax. They had three distinct
components the majority in the other House would consider. In lieu of any
payroll tax, the proposal was for a doubling of the existing BAT tax, or
business license tax (BLT), whichever you prefer by name, and a bank franchise
tax as well as and a tax on commercial leases. That has been discussed with
members of both parties in this House. It has been several days since that
concept was first presented.
I will not attempt to speak for everyone here, but objections
were raised to at least two components. One was the franchise tax on banks,
since that would single out banks for an income tax. The other was a commercial
lease. That had a number of problems. Any tax on commercial lease proposals was
to limit it to retail or industrial establishments over a certain amount. The
proposal is difficult to implement and difficult to accept because of the
nature of these leases. In many cases, the leases are not a flat rate for a
specific square footage, but are based upon square footage plus percentage of
income or receipts.
Having gone through this process, the decision was made to start
with a bill draft request to accommodate some of the concerns and to alleviate
some of the components that would pose these kinds of difficulties. Before you
is BDR 32-43, and a summary of the draft bill. We are now so familiar with the
matrixes I am not going to relate or point out those that are the same in all
of these bills. The usual reductions in collection fees are in this proposal.
This bill draft is a starting point for some discussion.
The revenue plan increases cigarettes 50 cents in fiscal year
2004 with an additional increase of 5 cents in fiscal year 2005 to 55 cents. We
will discuss the amount of revenue that would be raised from each of these
components and their effective dates. Since this is July 16, we have lost some
of the revenues that have been in these tax plans because of their effective
dates. The effective date for the cigarette tax is on passage and approval for
July 23, 2003.
The plan increases the liquor tax by 75 percent, effective August
1, 2003. The business license fee, which has been consistent with most of the
proposals, changes from a $25 one-time fee, to a $100 annual fee. That would be
effective on passage and approval or, for computation, July 23, 2003. The BAT
tax, or the business license tax, which is now $100 annually, would be doubled
to $200. There is a provision that states there would be an increase in the BLT
depending upon the percentage by which the average State wage increases each
year. Instead of $200 continuing forever, there would be a percentage increase
in the BLT dependent upon the amount by which the State average wage increases.
If it were 2 percent or 3 percent, the $200 would increase accordingly. That
would be retroactive under this proposal to July 1, 2003.
The Secretary of State fees, which the Senate sent to the
Assembly as Senate Bill No. 2, would be effective September 1, 2003. That bill,
which was an essential component of funding any of the budgets, should have
been processed by now and should have been enrolled. That has not changed with
respect to the Senate. Senate Bill No. 6 that came over to us with the Assembly
amendments was for $788 million. That did not include the fees raised by the
Secretary of State's increase. There has not been any controversy over this
component of the revenue plan.
There is a live entertainment tax, which would become effective
September 1, 2003, for gaming and in January, 2004, for non-gaming. There have
been some changes. The Committee is aware that it becomes 5 percent for venues
with capacities of over 7,500 seats. It also sets forth the exemption for
non-gaming establishments with less than 300 seats.
The gaming tax increase on the gaming win has not changed in
concept. It is raised 0.5 percent. That is effective August 1, 2003.
Restricted slots remain the same as in previous proposals, at
33.3 percent.
The real estate transfer tax previously considered is at the rate
of $1.30 for each $500 of value. It would be effective in January, 2004.
The financial institution component suggested by the majority in
the other House is in lieu of any franchise tax on banks. This would be in lieu
of a 2-percent rate on gross payroll. It is the Chair’s understanding that this
has been accepted by those representing the various financial institutions.
That would be effective January 1, 2004. Financial institutions have been
deleted from any requirement to pay the BLT. Otherwise, the business license
tax increase is paid by all employers. There is no exception.
These are the essential components under BDR 32-43. The amount of
revenue generated by this BDR is tentatively set at $820 million. I want to
make certain everyone has a full understanding of what is in this bill draft.
Senator Rhoads:
For the companies or industries that already pay a tax, is there
a credit under the business license tax? Is it like the net proceeds of mines?
Gary L. Ghiggeri
(Senate Fiscal Analyst):
The only credit in this bill would be the repeal of
the BLT for financial institutions who would pay 2 percent of the gross
payroll. There is no other exemption for the BLT that is in this legislation.
Senator Raggio:
This would apply to all businesses including gaming, mining and
insurance. Everyone pays the same under this proposal, which is a doubling of
the existing BLT.
Senator Titus:
You mentioned there were three provisions discussed,
brought as a proposal from the other House. They increased the BLT, proposed a
commercial lease and a tax on financial institutions. We believe there is not
going to be a broad-based business tax out of this Legislature. That is most
unfortunate. We have tried hard to spread the burden on businesses that do not
contribute currently, but apparently, that is not going to happen. We can see
there will be no net profits tax. There will be no gross receipts tax. There
will be no payroll tax. We accept increasing the BLT by doubling it. This is
not as good. It is a flat tax, and anytime we have a flat tax, it is going to
be regressive which means it is going to hurt small businesses more than large.
If that is all we can get out of this Legislature, then we have to move on.
The commercial lease provision is more controversial. The caucus
is divided. We are working on a way to do a commercial lease tax. It is a small
percentage of the lease on retail, not on industrial. It covers only the large
facilities, not the small ones. A specific square foot amount is exempted out.
Staff is working on that now so I will leave that open.
The provision in this proposal that has to do with financial
institutions is considered unacceptable for several reasons. First, it is a
payroll tax. We said if there is no net profits tax and there is no gross
receipts tax, there should be no payroll tax, and this is a payroll tax.
Second, you cannot assume that the banking community supports
this provision because the banking community is divided. Some would much rather
see a franchise tax than a payroll tax.
Third, we would prefer a franchise tax because a 2 percent
payroll tax is not the best way to go because banks are downsizing. They are
going to more automation. They are doing different transactions out of house.
Fourth, with the franchise tax, banking and financial institutions
have more flexibility in how they can pay the tax. When it is payroll, it is
straight payroll, and that is all there is. Therefore, this would be an
advantage to those institutions.
Fifth, no state has a payroll tax in the entire country. Banks
are taxed based on the franchise fee, based on net everywhere else in the
country. Everyplace else the tax would be higher than the one we originally
passed out of this House at 3 percent or the one that came back from the
Assembly at 4 percent.
Finally, I cannot believe they are going to be deleted from
paying the BLT when every other business pays it, and every other business that
has an industry-specific tax is asked to pay it. What possible reason would you
have for deleting them from the BLT? As for the cuts, this body has already
passed an $860 million budget. We think the rainy-day-fund cut is all right.
Doing audits to bring in more money and the cuts on the Department of Taxation
are all right. However, at this stage, I do not know why you would want to cut
Temporary Assistance to Needy Families (TANF), which is helping seniors and
children, or cut the University budget, which is what we heard you need to fund
in order to have better economic development and diversification within the
State. As we go through these different provisions, I hope we will also keep
these things in mind.
Senator Mathews:
Senator Titus, were you speaking for the Senate
Democratic caucus or the caucus from the other House, because there were some
things in here that I know I did not agree to.
Senator Titus:
I realize that, Senator Mathews, and I thought that
the general comments I was making were for us. That is why I said the
commercial lease was controversial, and I thought we agreed to increase the
BLT. I thought we agreed to those figures in terms of the cuts. Maybe some of
those things you disagreed with were on the bank franchise.
Senator Mathews:
My concern is when you started you said the other caucus. Then,
when you got deeper into it, I realized this is not what I discussed. For the
record, regardless of the size and whom it tries to get, this is not on my
radar. A tax on commercial leases is a “no‑no” as far as I am concerned.
Senator Raggio:
Senator Titus has talked about proposed budget cuts to try to
reach an accommodation with other caucuses in the building who seem to be
concerned with that issue. Are there any cuts in the budget built into this
bill draft?
Brenda J. Erdoes (Legislative
Counsel):
Yes, I believe the University cuts and the cuts to TANF and Medicaid
budgets are.
Senator Raggio:
I want to be able to point those out as parts of this bill draft.
Ms. Erdoes:
Section 187 of BDR 32-43 is where the changes to A.B. No. 553 of
the 72nd Legislative Session begin.
Senator Raggio:
Frankly, there was an attempt, in discussions with the Assembly
caucus, to try to reach an agreement on a reduction in the budget, which was
originally at $859 million. The discussion was to try to reach a level of
approximately $803 million. That was accommodated, for discussion purposes,
because of discussions with Fiscal. There was a 0.5-percent reduction in the
University formula. Thirty million dollars was removed that would have gone to
the rainy-day fund. There were only suggestions to accommodate some budget
reduction if the others who had to decide on this measure were willing to agree
to some kind of tax plan. This is not something that is cut and dry. The
rainy-day fund would be triggered in full, so the $30 million proposed would be
deferred unless triggered otherwise. There was an additional $5 million removed
from the tax collection. Is that correct?
Ms. Erdoes:
Yes, that is in section 61 of BDR 32-43.
Senator Raggio:
As I indicated, there is a 0.5-percent reduction in the formula
funding for the University, which was $6 million over the biennium. There is
$6.7 million from the TANF caseload-driven reductions over the biennium, and
$3.1 million as a result from the Medicaid caseload-driven reductions. That is
in the bill draft, again, only to accommodate some express need that it was a
necessary part of any revenue plan. No one has agreed to this. I appreciate
Senator Titus bringing it forth.
Senator Carlton:
I agree with the Minority Leader. Earlier, she expressed my
viewpoints well. One issue not addressed is the BLT increase, and that gives me
a bit of concern. I understand the increase but not the index associated with
the increase in capped wages. Am I correct in assuming that if the total wages
of the State goes up 2 percent, which is what the employer is paying the
employee, his business license tax is going up in conjunction with the
increase. It is almost like a consumer price index formula, to which I have
always been opposed. An automatic increase in something like this is difficult.
In my private life, I help to negotiate contracts for 50,000 members in
southern Nevada, and we just negotiated a contract. It is good for the next
three years. I am wondering, when we get our raise next year, since we have an
innovative contract, will that automatically raise my employer’s BLT? How are
we going to address all the different contracts that are out there? When I
negotiate a good contract and get a raise for my co‑workers, that raise
is going to impact every small businessperson in this State because it will end
up raising their BLT. Are my assumptions correct?
Rick Combs (Deputy
Fiscal Analyst):
Senator Carlton, it would not be on a
business-by-business basis, but an overall increase for the State. If the
overall wages paid in the State go up by a certain percentage, that same
percentage increase would be applied to the BLT. The amount is the capped wage.
It is not going to be the gross wages that it will be compared to, but the
amount of the increase in the capped wages that the Employment Security
Division (ESD) uses as 66.6 percent of the average state salary. That would be
the starting point. Look at the increase in the current calendar year, on
July 1, 2003. For the current calendar year, ESD has set the capped wage
at $21,500. You would then compare that to the same wage they set for the
previous calendar year, and the percentage increase in the 2 years would then
be applied to the BLT amount.
Senator Carlton:
I understand that, but when you have a large group of people, as
I am talking about, who negotiate a raise and that raise is considered, it will
raise the bar and ultimately cost every business in this State more in their
BLT.
Mr. Combs:
Ultimately, that is true, unless there were a corresponding
reduction somewhere else that offset it, but you are right. If there are a
large percentage of businesses that give an increased wage, it is going to
affect everyone.
Senator Raggio:
I should have indicated that the indexing for this
increase was also part of the proposal that came over from the majority party
in the other House.
Senator Mathews:
First, I would like to apologize to the Minority
Leader. I did not hear her say there were some who did not agree with the lease
tax. To go back to the BLT and the indexing, my concern with indexing is that
the Legislature has no oversight over it. What happens is, it activates
automatically just as Mr. Combs said. I have always had a problem with anything
that activates without our oversight. I really think we should be careful in
including something in a tax package that activates an index automatically.
Senator Washington:
You indicated that some had agreed to the 2 percent
of gross wages employer tax on financial institutions and some had not. Was
that across the board? Was the agreement more on behalf of the 2-percent
employer tax or was it not?
Senator Townsend:
The discussion was with the general representative
of the banking industry plus Wells Fargo, Colonial Bank and Bank of America.
U.S. Bank and Citicorp were not there. I do not have answers from Citicorp or
U.S. Bank. They agreed to this component as it sits.
Senator Washington:
There is a $29 million tax on the financial
institutions over the biennium. If you subtract it out of the General Fund of
$804 million, it brings it down to $776 million. Because it is an industry
specific tax, are there other options to capture that $29 million over the
biennium.
Senator Raggio:
When the proposal came to us from the majority party
in the other House, the three components they were stressing essential to them
were the doubling of the BAT tax with the indexing component, a franchise tax
on financial institutions and the commercial lease tax. Senator Townsend has
indicated the representatives of the financial institutions he has spoken with
indicated they objected to any type of bank franchise tax. The proposal came
from those representatives.
Senator Townsend:
The discussions that occurred yesterday were pointed. They were
specific. They were not general. The revenue picture came from them confirmed by
our staff. The definition of financial institutions was confirmed by them,
confirmed by our Legal Counsel and confirmed by our staff.
Senator Washington:
We have targeted an industry within the State. Whether the
financial industries agree or not, we are setting a precedent for any other
industry we so wish to target to gain revenues for the State. If we are going
to consider a fair, broad-based tax, then it should be broad-based enough to
get all of the businesses on the same level playing field as opposed to
targeting one industry whether they are the financial institutions,
manufacturing or retail. It should be fair and across the board for everyone.
Senator Raggio:
Under the Committee of the Whole rules, if the committee appears
to be working under misinformation, anyone with correct information is invited
to speak.
Senator Cegavske:
I have questions about the indexing, something requested in the
other House. We talked about indexing extensively in the Senate Committee on
Finance when the Division of Wildlife wanted to implement that. We discussed
why that was not a good concept. I would not be able to support it.
Please explain the difference between what the dollar amount
would be if we let the financial institutions have the 2 percent of their gross
wages from what it would be if we kept them in the BLT.
Mr. Ghiggeri:
Are you asking what the 2-percent tax would be versus what the
BLT would be?
Senator Cegavske:
The amount brought in is $11.4 million for 2004 and $23.6 million
for 2005, but is that number greater than the BLT.
Mr. Ghiggeri:
The tax in fiscal year 2004 is effective January 1. That is why
it is $11.4 million. The $2 million reduction indicates what our
calculation is, what the financial institutions would have paid for the BLT.
The tax would raise $11.4 million verses $2 million under the BLT. It is about
$9 million more. The second year is $4.2 million verses $23.6 million making it
a $19 million difference.
Senator Cegavske:
We are asking one industry to pay that much more.
Senator Carlton:
I am confused about this indexing. There was a comment that it
came over from the Assembly that way. There are many different packages, and I
have read many different things.
Senator Raggio:
Let me clarify, nothing has come over from the Assembly other
than Senate Bill No. 6 which was amended. This proposal was orally delivered to
us. That is what was contained in their presentation.
Senator Carlton:
Thank you. I wanted to understand this because I could not track
where it had come from.
Senator Raggio:
It came from the representatives of the majority party in the
Assembly who, yesterday, indicated those were the components they would agree
to. That is the reason we are considering them. Understand, we still must reach
an accord of two-thirds vote in both Houses to get a tax plan passed.
Senator Carlton:
Thank you. I thought it might have been in a previous draft.
Senator Raggio:
No. This draft was requested in an attempt to bring together the
concepts coming from both Houses in the many discussions in the various
caucuses. There are four caucuses and then there are mini-caucuses. Every time
they meet external forces and special interests intervene, then everything
changes. We are getting nowhere fast. I am trying to find a way to get us on
record discussing the issues openly. Each of us cannot remain rigid. We must
reach an accord that gives up something and that accommodates everyone’s
concerns. This bill draft came because of those discussions.
It was the Chair’s thought we could take this and change some of
this if necessary. There may be elements in this draft, like the index, that
will not work, but we should be mindful that we are trying to reach a
two-thirds accord with at least four factions in this Legislature who represent
each of the caucuses.
I do not know how else we can do this. We are not being
successful in the method we are using. That is why we are here with everyone
participating. That is the only way we can get anything done.
Senator Care:
In its final report, the Task Force gave its explanation as to
why the State of Nevada was in the situation it was. They reported that
cigarettes, alcohol, restricted slots and the BLT taxes had not been adjusted
for inflation even though more people had moved into the State, more people
drank, more people smoked, more people played slot machines and more small
businesses opened. It is clear, one of the reasons we have fallen behind is
because there had been no corresponding adjustment for inflation.
Senator Schneider:
As we listen to those of us in this room, there are people in
this Committee who do not agree with everything here. We have done our best,
and we have done a great job trying to move something out and to get two-thirds
of this House to agree. We all have not agreed with everything, but we have
compromised. We should take this discussion to what the budget was in 2001. We
should consider a continuing resolution. I do not think there is going to be a
compromise. No matter what we pass from this Committee, the “no-new-taxes” the
“no-increase‑in-spending” voice is getting stronger and more dug in.
I wanted to spend a billion dollars to fund education at the
national average. I can see we are not accomplishing anything right now. Mr.
Chairman, you have made a yeoman’s effort to try to work with members of your
party. It has not moved forward. The Minority Leader has worked with members of
her party. Some people will not change their views. I am not convinced that at
this late date we can accomplish anything. We should start looking backwards.
We should look at 2001 and see where we were and what dollars were spent. If we
do not raise taxes, where will we be? I would be willing to discuss this. I
would not be happy with what would happen to education funding or welfare
funding, but maybe that is where we are.
Senator
Rawson:
Mr. Chairman, there is agreement on most aspects of the budget.
We have had some people suggest what they can support. Maybe we should find
those things that are not supported by a two-thirds vote, and then concentrate
on those things. I think we are closer than we are far apart.
Senator Nolan:
Thank you, I know we have all been making an effort
to fund the budget in whole, that is the responsible thing to do. The greatest emphasis
has been on funding our educational institutions appropriately. Our educational
systems need the most attention. They are deficient in many areas compared to
national standards. At a time when we should be giving extra emphasis in that
area, we are bogged down. We need to focus. We need to deliver a complete
funding mechanism for the budget. There are enough non-controversial parts of
the funding proposals brought before us, so far, that we can fund the DSA and
the needed enhancements for education. We should move these out in separate
bills, quickly, if we cannot agree on a total funding package.
Senator Townsend:
For clarification, the bill does not include the Secretary of
State’s fees. They are approximately $44 million. The bill is for $776 million.
Senator Raggio:
That is correct.
Senator Neal:
How does gaming relate to the BLT? Are they exempt?
Senator Raggio:
No. The doubling of the BAT tax includes all employers including
gaming, mining and insurance―everyone.
Senator Neal:
Gaming and non-gaming establishments with over 7,500 seats will
be taxed at a rate of 5 percent but would not include food or beverages.
What is the importance of that? Why would that be the case?
Senator McGinness:
We are making certain we are not placing events such as the
NASCAR facility in Clark County and National Finals Rodeo in a position where
they would not be competitive. We do not wish them to leave the State.
Senator Neal:
The 5 percent will not include the food and beverages and will
sales tax be included?
Senator McGinness:
The 5 percent will not include the food and beverages, and they
will pay the sales tax.
Senator Neal:
I understand that non-gaming establishments with less than 300
seats and gaming establishments with less than 300 seats and less than 51 slots
and 6 games or a combination of slots and games with these limits are exempt
from taxes. What are we talking about in reference to these exemptions?
Mr. Combs:
The seat requirement was put in at the request of
the other House. Three hundred seats in a non-gaming establishment was to
prohibit some smaller restaurants and bars that do not have gaming from having
to collect the tax if they have a band that performs in the small restaurant or
bar from the casino entertainment tax. If a gaming licensee has less than 51
slots or 6 games or a combination of the two, they are not required to pay the
casino entertainment tax.
Senator Neal:
You are speaking of gaming and non-gaming establishments or a
combination thereof. What are we talking about?
Mr. Combs:
The combination thereof modifies the 51 slots or the 6 games. It
is a combination of the 51 slots or the 6 games not the gaming or
non-gaming.
Senator Neal:
What is an example of the type of establishment this would
affect?
Mr. Combs:
This would affect primarily restricted slot operations that do
not have more than 51 slot machines. For instance, there might be a bar with
only 10-15 slots. If a band performed in that bar, they would not be required
to collect that tax.
Senator Neal:
Does this refer to a bar within a casino?
Mr. Combs:
If the casino had more than 51 slots, 6 table games, or a
combination thereof, then they would not be exempt. The exemption would be an
“and” exemption. They would both need to meet the 300 or more seat requirement
and they would have to meet the more than 51 slots or 6-table games requirement
to be exempt from the tax. They would have to meet both of those requirements
to be exempt.
Senator Neal:
As one who comes from the old school of gaming, we used to refer
to the “lounge acts” and I would like to know how does this apply to them?
Mr. Combs:
If it were a cabaret-type facility inside a casino and if the
casino had more than 51 slots, 6 table games or a combination thereof it
would be taxed.
Senator Neal:
Taxed at 10 percent or 5 percent?
Mr. Combs:
At the rate of 10 percent.
Senator Raggio:
I have received a note from Assemblywoman Buckley indicating they
did not intend to propose an indexing on the doubling of the BLT tax. Apparently,
staff had suggested it as a way to keep it current. I do not want to attribute
anything to them that is not accurate.
Senator Rhoads:
If we were to increase the financial institution tax to $400 and
put them under the BLT would that be constitutional because we are taxing some
people $200 and some $400? We could do away with the gross tax.
Mrs. Erdoes:
It is all right to do as long as the distinction drawn is an
industry-based distinction or a general distinction and not one based on the
specific bank or the specific industry. If all of them were included, it would
be constitutional. If you look at our tax structure now, even though we do not
call some of the taxes the same thing, we do tax different industries
differently. That would be all right.
Senator Rhoads:
How much would $400 raise in comparison to the 2
percent?
Mr. Ghiggeri:
The $200 is estimated to raise $4.2 million and $400 would double
that to $8.4 million. That $19 million differential would increase it a great
deal.
Senator Rhoads:
From speaking with some of our Assembly colleagues, this would be
acceptable. We can increase the BLT tax from the financial institutions from
$200 to $400 because they are not currently included in the BLT. Instead, it
taxes them 2 percent of their gross wages. I suggest we put them into the BLT
at $400. I think they would accept that.
Senator Neal:
I would like to discuss the gross receipts tax on gaming. The
figures I have been given for the fiscal year that ended on June 30, 2003,
gaming took in $9.5 billion. That is 1.1 percent above what they took in by
June 2000. That money is a loss to the individual who dropped the money in the
slots or lost it at the gaming tables. This money is a source that should be
tapped more so than has been done previously. The tax should increase by more
than the 0.5 percent currently proposed. The tax should go up to 7 percent or
more. This would garner additional funds. The largest opposition to the tax
plan comes from an activist who stated on a news report that gaming could be
taxed at a higher rate than it is at present. Though not being of his same
philosophy, I agree with his conclusion. I propose we increase the tax on
gaming to 7 percent with another 0.25 percent increase for one tier.
Senator Raggio:
There have been some changes suggested on several components. One
has been made on gaming by Senator Neal. We need to focus on the needs. This is
the second special session, and this Legislature has passed a budget to meet
the State’s needs except for K-12 education. The Governor has directed us by
proclamation to meet in special session and has prescribed for us the issues
that we may consider. We have been within those confines. There was a
suggestion to return to the 2001 budget and to issue a continuing resolution. I
would need clarification from Legislative Counsel as to what was meant by that.
My understanding of a continuing resolution as utilized by Congress is that
when they are unable to meet a budget deadline, they adopt a continuing
resolution to continue something for a limited length of time. I assume it
means we remain in session while a continuing resolution is being utilized. We
would still be under some restraints because the Constitution requires us to
fund both the State’s needs, which we have already addressed by sending a
budget that is signed into law, and to fund K-12 education. That remains
unfunded. Senator Nolan suggested we could pass that out and fund it to the
extent that is required, but I am not certain that is feasible. I would have to
ask Fiscal. If we did that with some limited funding how do we meet our other
Constitutional requirement in funding the budget. Regardless of what the Court
rules, we are still subject to the writ of mandamus to pass a budget whether or
not it is by majority vote or two-thirds. However, we all want to reach the
two-thirds accord.
Mrs. Erdoes:
In regard to the continuing resolution, it is my belief that the
Nevada Legislature does not have the same option as Congress which enables them
to pass a resolution that continues funding at the same level as was previously
enacted. You can accomplish the same thing by enacting an appropriation for
that amount through a bill. It would not be automatic. It would not be a
resolution, but you could accomplish the same end by appropriating a certain
amount of money for a certain amount of time. You need to make certain that
those appropriations would be funded with existing revenue in lieu of passing
measures to actually fund those appropriations for the fiscal years 2003-2005.
Senator Raggio:
Senator Schneider’s suggestion was to pass a bill to fund the
State with all its needs including education at the same level that we did in
2001. Is that your suggestion, Senator Schneider?
Senator Schneider:
Yes, Mr. Chairman. That is the only way we can pick up votes. The
votes are in the hands of the minority. That is the only way we can get votes.
Senator Raggio:
If we did that, we would hear from many constituents about what
was not being funded. However, I do understand the point you are making.
Senator Coffin:
If the federal court overturns the Supreme Court or orders them
to revisit their decision and we came back to the two-thirds Nevada
requirement, then I can understand the doomsday scenario because that is what
it is. Under a continuing resolution, you would lose all of your growth in the
budget. What some people have derided as enhancements are necessary attachments
to the budget to handle the growth portion of the budget. I have been on money
committees for 17 of the 22 years I have spent in the Legislature. School class
size will increase considerably if we do not provide enough money for growth.
That would be the unintended outcome of Senator Schneider’s resolution.
Senator
Rawson:
We have been told the minority caucus in the Assembly is willing
to look at the financial institutions tax if it was raised to $400. It does us
no good if we lose votes in the Senate from people who will not go that low. As
we try the math on this, it is a little different from what has been stated. We
would remove the “delete financial institutions” line item and the “employer
tax on financial institution” line item. The employer tax on financial
institutions is not $11.4 million it is $9.4 million when the delete financial
institutions line item is subtracted. You are adding $4 million in the BLT
tax subtracting it from the $9.4 million financial institutions tax. It leaves
us with a total revenue of $338.6 million. Our General Fund requirement is
$342.5 million. Now, we are down in the $3.9-million range. We should not talk
about doomsday scenarios when we are this close. I am trying to look for a
solution for this.
Senator Raggio:
We have received formal notification from the Governor that the
May, 2003, gaming win and percentage fee tax collection totals were just
released. The May figures represent the final collections from gaming for
fiscal year 2003. In May, 2001, when the Economic Forum made its projections,
they projected, on which the fiscal 2003 budget was built, that the estimates
would be $611.5 million in total gaming revenue. They revised the estimate last
May and reduced it to an expected amount of $576.8 million. That was $53
million less than what the fiscal year 2003 budget was built. The actual
gaming numbers are $559 million which is $17.7 million less than the revised
figures projected in May. The unappropriated General Fund balance for fiscal
year 2003 is projected to be $82.5 million. That is 4.09 percent or
$18.5 million less than what is required under the law as a 5-percent
ending-fund balance. People keep talking about big reductions in the budget and
in the revenues. There are much bigger holes in the financial package than what
was originally considered. This is another $17.7 million hole. It exacerbates
the problem. It needs to be brought to the attention of those who continually
want to make bigger cuts in what the revenues are to fund the special needs of
the State or of education.
It is our responsibility in the Senate to not sit here and worry
about what the other House is going to accept. We have a responsibility to
reach a two-thirds accord in this House on some plan that will fund a budget.
If we massage the budget without doing harm, that is fine, but let us try to
reach an accord on a tax plan. Senator McGinness stated earlier, “I could learn
to hate this one as much as any others I have seen.” We have to recognize our
responsibilities and not shirk that. We have a responsibility to reach a
two-thirds accord. Let us reach a plan that we hate less than the others. No
one likes to raise taxes. I have a BDR ready for introduction that would
address all of the needs and all of the concerns. It is a 1/4-cent increase in
sales tax. That would do everything we need. It would still have the other components
we have discussed including increases in gaming, but it would delete all the
argument about employer tax and gross receipts. The business license tax would
be increased to $140 instead of $100. Those two components would raise the
needed revenue for the needs of the State and for education.
Senator Mathews:
How much would that raise?
Senator Raggio:
If implemented on October 1, 2003, the 1/4-cent increase would
raise $65.5 million in the first year and $91.9 million in the second year.
Effective October 1, 2003, the $140 for the business license tax would raise an
additional $25.1 million in the second year. That would raise $804.8 million
over the biennium with the other components already discussed in the tax
proposals. That includes the increase in gaming, the restricted slots and the
live entertainment tax.
Senator Washington:
Would that be one of the proposals that could be considered as we
move forward to consider a tax package?
Senator Raggio:
Yes, but we still have to reach a two-thirds accord. I was
suggesting that as a proposal we could consider.
Senator Washington:
I would like us to consider Senator Rawson’s proposal to go
through these items one at a time. Then we could find out if there is a
consensus on any of the items. I would like to see that as one of the options.
A fourth tier in gaming has been proposed at 8 percent starting at
$10 million per month. Could that be an option as well? It could raise
another $40 million.
Senator Neal:
I would second that if that were considered.
Senator Raggio:
I would like some discussion to see what could be considered.
Senator Titus:
We have a responsibility to move this. The Senate has lived up to
that responsibility. We have voted on the net proceeds and missed the two-thirds
by one vote. We sent a payroll tax to the Assembly. We have been meeting. We
have been negotiating. We have come with proposal after proposal. We have
eliminated the net profits tax. We have eliminated the UBT, the GRT, the OREO
and the payroll. We are bidding against ourselves. Until we know what is going
to get one Republican vote in the Assembly, why are we voting on tax after tax
just to go on record saying, “we have been responsible; we have voted for all
of these taxes,” when we do not have any idea what figure they will go for or
what tax package they want. It is a moving target. We have nothing with which
to negotiate. We need to get the people to sit here before us and to tell us
what it is they want and make them justify it and see if we can get the
two-thirds. We are not the ones who are irresponsible in this process. I am
physically, psychologically and intellectually spent. I do not know what else
we can come up with and get any kind of reaction from the other House. I know I
have expressed my frustration, but I do not know what we can vote for that will
get passed in the other House. A gaming tax? A bank tax? What is it that will
get a two-thirds vote? Why do we keep voting on tax after tax, cut after cut
and not have any way of knowing if we are getting closer or not? This is
extremely frustrating.
Senator Raggio:
That is the reason the Chair indicated we can come in here as a
Committee of the Whole. That is the Chair’s intention. That is how we will
operate from now on. These caucus meetings with people coming in and out get us
nowhere. If we continue to operate in this House in a collegial fashion, we can
continue to send the other House a plan. If we can agree, we will continue to
do our job. We cannot run the other House. I do not disagree with anything else
you said.
Senator Coffin:
What I heard from Senator
Rhoads on banks was an interesting proposal to help reach a resolution. Does
the Senator have suggestions that would help us with a sales tax proposal if it
were sent to the Assembly Republicans?
Senator Rhoads:
It is my feeling if we do away with the financial institution tax
and double their BLT to $400, we would pick up some votes on the other side.
Senator Coffin:
If Senator Raggio’s proposal on sales tax were brought forth,
would that attract additional votes?
Senator Rhoads:
It is my understanding the Democrats in the Assembly are against
it.
Senator Raggio:
Are there any other comments?
Senator Rhoads:
I
move we approve the revised July 15, 2003, document with amendments doing away
with the employer tax on financial institutions, the 2 percent of gross wages
increase financial institutions' BLT tax to $400. I move to delete the annual
inflation indexing of the BLT.
I realize that decreases the amount of money that this would
take, but we could increase the annual business license fee accordingly.
Senator Raggio:
Before I accept the motion, I will ask Fiscal to indicate what
the change in revenue would be under that proposal.
Mr. Ghiggeri:
If Senator Rhoads is advocating the removal of the 2-percent bank
franchise fee, add a BLT for financial institutions for $400, delete the
indexing which would increase the BLT from $200 to $204 and roll that back to
keep it a flat $200. Then the business license fee would be balanced with an
annual fee to compensate for the loss of the indexing component of the BLT. We
would have to calculate that.
Mr. Combs:
You would be required to raise the business license fee. I
believe you would be short $5.4 million the first year and $18.6 million
short the second year. The business license fee at $100 is proposed to generate
approximately $24.5 million in the second year. There needs to be another $75
per year added to the business license fee if that is what you are using to balance
the budget.
Senator Raggio:
That
would raise the annual fee, which is now a $25 one-time fee to $175 per year. I
have a motion by Senator Rhoads to delete any indexing on the business license
tax, to remove any employer tax on gross wages for financial institutions and
to impose a business license tax on financial institutions in the amount of
$400 instead of the $200 annually per employee. In order to retain the amount
required the business license fee would be adjusted to about $175.
Senator Rawson seconded the motion.
Senator Neal:
Is the motion for adopting a portion or the entire
package?
Senator Raggio:
This is for the entire package but with the amendments in Senator
Rhoads proposal.
Senator Neal:
I would like to offer an amendment to the motion to create a
fourth tier starting at 8 percent on gross wins over $10 million per month.
Mr. Combs:
The present rate is at 6.25 percent. The current proposal would
raise that to 6.75 percent on the top tier.
Senator Raggio:
This would be an additional tier?
Senator Neal:
This is for a fourth
tier. Those gaming entities with a win of over $10 million per month would pay
8 percent.
Senator Washington:
I second that motion.
I would like to ask Senator Neal to add to that amendment that we
roll the financial institutions to the same level as everyone else on the BLT.
Then do away with the license fee increase for gaming.
Senator Raggio:
Is this an additional motion?
Senator Washington:
Yes.
Senator Raggio:
We have before us an amendment to the main motion. The amendment
is to create a fourth tier on gaming for establishments that have a gross win
over $10 million a month. That the rate for those establishments would instead
of 6.5, it would be 8 percent for everything above $10 million.
Senator Washington:
I would like the financial institutions to be at the same level
as everyone else on the BLT.
Senator Neal:
That was not included in my motion. I do not know what the
figures would be.
Mr. Ghiggeri:
We cannot give you figures for anything when dealing multiple
scenarios as just suggested. We need time to run the numbers. Anything else
would just be a guess.
Senator Raggio:
Do we have any numbers on what this would provide in additional
revenue?
Mr. Ghiggeri:
Not for what they just asked.
Senator Raggio:
Nothing on Senator Neal’s proposal to raise the rate to 8 percent
on establishments with over $10 million per month?
Mr. Ghiggeri:
We are getting the files with that information in it at this
time.
Senator Raggio:
It is appropriate we obtain that information before we take
action.
Senator Washington:
I would like to withdraw my amendment to the motion at this time.
Senator Raggio:
Senator Neal did not accept the amendment added to his motion.
That is not part of the motion to amend the main motion.
Senator Care:
I will vote against the motion in whatever form it is. This is
like a room full of adults trying to read the instructions for assembling a
wagon on Christmas morning. This is an intricate and convoluted procedure. It
is difficult to obtain two-thirds of the vote in both Houses. We cannot sit
here and do this spontaneously. There is much serious thought that should go
into this. We have a BDR before us. I have not liked anything I have voted for
yet. I am not a tax-and-spend politician but my voting record would indicate
that I am. This must stop. I will vote against the motion, and if the motion
dies, I will move to do pass the BDR before us.
Senator Raggio:
The problem with the motion is that it sounds good, but if we
passed it here it would not get anywhere in the other House. I am trying to
direct us in a way that will accomplish our goal of passing a tax package.
Senator Neal:
Is he talking about the amendment to the motion or to the motion
made by Senator Rhoads?
Senator Care:
It was the gaming tax increase.
Senator Neal:
I just put it out there. Anyone can vote against it if they wish.
Senator Care:
The reason the BDR before us has a 0.5-percent increase in gross
gaming revenue tax is because of an amendment I made where we had a BDR with
0.25 percent the first year and an additional 0.25 percent the second year. No
one can say I have not made motions to raise the gross gaming revenue tax. We
will not know until we send this to the Assembly as to how it will go. It is
not reasonable to make motions and just throw them out without thought. Most of
us have given these plans thought, but the inference is that this is being done
willy-nilly. I know we are all frustrated, but it is for that reason I will
oppose the motion.
Senator Neal:
I would take exception to the suggestion that people are
discussing this willy-nilly. I have been discussing this issue for over eight
years in this Legislature. I do not come here willy-nilly, dealing with the
increase on gaming. When I go for something, I have an exact idea where I am
going and why I am going. We are responsible for our votes. We are obligated to
vote the way we see it. I do not ask anyone to vote against the way they feel.
I take exception to the inference that when I make a motion, it has not been
thought out. It has been thought out. The public is aware of what is going on
here. They said in a poll, taken a week ago, that gaming should be increased to
7 percent.
Senator Amodei:
This is one case where Senator Care and I will not agree. Since
the adjournment of the regular session, there have been no other committees
meeting; there have been no other issues on the table. The discussion has been
limited to revenue generation and budget issues. The discussions on these
issues have increased the knowledge for all of us on issues that normally were
reserved for those on the Senate Committee on Taxation.
These public discussions as the Committee of the Whole have
increased our knowledge. We talk about the gaming tax, the financial
institution tax, the payroll tax and a variety of ideas both dead and alive.
These are issues better known by the people, now, because they have been
discussed instead of us relying on the committee work as we traditionally do
during the regular session. I am comfortable with people proposing motions the
way they have in terms of other issue areas that may or may not have been
discussed in public. Is it appropriate in a parliamentary sense. Senator Rhoads
made a motion about financial institutions. Senator Neal made one about gaming.
If those amendments can be voted on individually as opposed to voting on them
in one package, the bill will either be amended or not, but everyone will have
voted on it with those areas addressed.
Senator Raggio:
If that is the will of the Committee to take either motion, then
the Chair would be happy to do that.
Senator Titus:
I oppose that. The last time we did that when we went through
this package, we had many people who voted in Committee on the different
amendments who did not intend to vote on the bill. I do not see what that
accomplishes.
I appreciate Senator Neal’s attempts to raise the gaming tax. I
have supported him on some of his proposals and some I have not.
Here are some figures for Bank of America and Citibank. They had
quarterly earnings with 25 percent growth over the last quarter. Citibank’s
dividends went up 75 percent. Together they made a net profit of over $12
billion. These institutions make a great deal of money in this State and are
very prosperous but contribute little to the State. Let us talk about financial
institutions as well as gaming.
Senator Mathews:
Did those figures apply to only the growth in earnings for the
banks in the State or for their earnings as a whole?
Senator Titus:
Their earnings as a whole.
Senator Raggio:
Does the Committee wish to proceed on the motion from Senator
Rhoads first, and then take up the motion from Senator Neal?
We will vote on the motion from Senator Rhoads to adopt the
proposal, BDR 32-43, with the following changes: to change the financial
institutions components from 2-percent gross payroll to a BLT component with a
$400 payment per employee annually and to change the business license fee from
the proposed $100 annual fee to an amount that would be adjusted to reach the
level as indicated, which would be $175 annually, and to eliminate the indexing
on the proposed business license tax increase.
Mr. Ghiggeri:
By my calculations, I think that is high and I would like to
verify that.
Senator Raggio:
Is there further discussion on that motion?
Senator Amodei:
I appreciate the comments of the Minority Leader. That is a great
deal of income. The one thing I would add is that the amendment proposes
treating the industry different. When you look at impact, there is not 45
million people a year coming here to open a checking account with Bank of
America. That reduces the impact on the State general fund obligation when we
look at how we treat other industries.
Senator Neal:
Do I understand we are taking this as a separate motion from mine
relative to gaming?
Senator Raggio:
Yes, we will consider your motion following this one.
I will concur somewhat with what Senator Titus has said. It is
not going to do us any good to adopt this motion unless the motion, if adopted,
is going to get a two-thirds vote on the Senate Floor. If you are going to vote
for the motion, please indicate as to whether you are prepared to vote for this
on the floor, otherwise there is no use taking this to the floor.
Senator McGinness:
Thank you, I agree with part of Senator Rhoads’ motion, but I do
not want to see the business license fee go from a $25 one-time fee to a $175
fee. Considering Senator Washington has another motion for later, I will
support this to make the changes on the financial institutions.
Senator Raggio:
The vote on the amendment is 9 yeas, 11 nays, 1 abstain.
The motion failed.
Mr. Combs:
We have run the scenario represented by Senator Neal’s motion
before. We would have to talk to the Gaming Control Board. They have
proprietary information we would need.
Senator Raggio:
Do we want to vote on the motion made by Senator Neal without
knowing the figures? It might be inappropriate, but if the Committee wants to, we
will do that. Otherwise, we will hold your motion until we get the information
needed for it.
Senator Neal:
I would like to have this considered when we have all the
information before us so that people will understand what they are voting for
and so that the public can judge our votes in terms of what amount this would
bring in for the State.
Senator
Rawson:
I moved to do pass BDR 32-43 as is but without the indexing.
Senator Care:
I second the motion.
Senator Raggio:
Does the Committee recommend the approval of BDR 32-43 without
change other than to remove the indexing proposed for the business license tax?
Any further discussion?
Senator Neal:
From the motion, I understand, we are disallowing the senatorial
courtesy of having a Senator with information pertinent to this bill be able to
present it to this body when a second had been made on the amendment proposed
to this bill?
Senator
Rawson:
I made my motion independent of the previous action. I assume
when information is available, the Senator’s motion will be acted upon. This
motion will stand on its own. If his motion passes, in the future, it would
modify this one.
Senator Raggio:
Fiscal has stated they would not be able to get the information
on what you proposed until sometime tomorrow morning.
Mr. Combs:
We need to get the information from the Gaming Control Board.
They are not available at this moment but will be available in the morning.
Senator Neal:
Then this could be considered after we receive the information we
need.
Senator Raggio:
The Chair wishes to be as accommodating as possible. Let us
assume this motion passes. That would be the motion to recommend this to the
full Senate.
Before we act on the Senate Floor, we would come back as a
Committee of the Whole, if that is your desire, to have that motion considered.
We would not act until that information is available.
Senator Nolan:
I would like to ask for a clarification on what we discussed
earlier. We discussed the Secretary of State’s fees.
Senator Raggio:
They are not in this bill.
Senator Nolan:
How will that revenue impact this?
Senator Raggio:
Senate Bill No. 2 covers the Secretary of State’s fees. That bill
would have to be processed as well to bring revenue up to this level.
Senator Townsend:
Is the motion to introduce this bill? The motion was to do pass,
but we do not have this bill?
Senator Raggio:
The motion is to recommend to introduce and do pass the bill
draft. That is what we have been doing during the special session. I accept the
motion with the understanding that if there is an amendment from Senator Neal
that needs to be considered, we would accommodate that proposed amendment.
Senator Townsend:
Thank you, Mr. Chairman. Everyone has worked hard on this. They
have principles upon which they make their decisions, and everyone has made a
sincere effort to compromise and to bring forward constructive alternatives.
What frustrates most of us, and the Minority Leader expressed her
feelings with passion on this issue, is there was an effort made in good faith
in which we passed the earlier bills and the funding mechanisms. The Senate has
honored its obligations. The Assembly has made a good faith effort to do the
same thing, but they were not able to fulfill that. We are all trying to
understand.
Mr. Chairman, you have made a good faith effort to keep us in the
Committee of the Whole. All of us support that. We have to share our feelings
and our thoughts in trying to build consensus, but every time we try to do
that, the people we are trying to work with are never in the room.
I suggest that at some point, whether it is tonight, tomorrow
morning or whenever, we ask the individuals whether there are 15, 16 or 17 from
the other House to come before the Committee of the Whole, on the record, and
to let us know exactly their feeling about the budget, what cuts they want made
and what revenue streams they will support. We deserve to know that. The public
deserves to know that. We deserve to have it on the record. That would help us
work better together with one another to try to come to a resolution. Perhaps,
that will get us out of here.
Senator Raggio:
We can accept this motion. If it passes with two-thirds so it
will be supported on the Senate Floor, we can introduce the bill. We can
reconvene as a Committee of the Whole to request whoever this Committee would
like to come in here tomorrow to discuss this. We cannot compel people to come
in here, but we can request they come. This will offer them the opportunity to
indicate their support. We should not make an empty effort. I will accept the
motion to introduce the bill draft.
Senator Hardy:
This is something I spent most of the day working on with members
of the Committee. There are some outstanding problems, which need to be addressed
by this BDR. I could vote for the introduction, but I could not vote for it
with the understanding I would support it on the Senate Floor.
Senator Raggio:
I understand, but there is little use of us introducing a bill
with support for introduction without having the votes to pass on the Senate
Floor and send it to the Assembly. We need to know if there is two-thirds vote
for passage. If the members of the other House, regardless of party, will come
before us to indicate what their feelings are about it, what changes are needed
to pass it, and there is not two-thirds vote for passage, then there is no need
to introduce the bill draft.
Senator Tiffany:
What will happen with the resident agent, the Secretary of State
bill? We passed it over to the other House. Are we going to uncouple it here
and look at only the tax bill?
Senator Raggio:
That is not in this bill. That bill has been passed by our House.
Senator Tiffany:
We are going to leave it uncoupled? We are not going to mention
it if we pass this over to the other House?
Senator Raggio:
It was uncoupled.
Senator Tiffany:
To leave that revenue out of the total discussion is not
appropriate. We want to make certain that when this goes over to the other
House, because it has been uncoupled, that it is our intention to put it back
together as a total package.
Senator Raggio:
We would anticipate that would be passed as well. It must be
passed to fund the budget properly.
Senator Tiffany:
That statement needs to be said. We keep talking about the other
House and what they are going to do. It has been clear you are not going to get
all 15 votes, but you could pick up 2‑4 votes to get this passed. I
know you do not want to discuss this, but that depends on the budget number.
You could pick up 2 votes if the budget is slightly under $800 million, and you
could pick up 4 votes if the budget is around $750 million. You are not going
to pick up 15 votes, but you might pick up a couple. If you want to drag
these people in front of us for that, that is not appropriate.
Senator Raggio:
No one is going to drag anyone in front of this Committee.
Senator Tiffany:
I hope not.
Senator Raggio:
The suggestion was that they be invited. If they want to come,
and I do not know whom “they” is, we will invite anyone who wants to come in
and explain their position on this proposed bill. They will be invited.
Senator Tiffany:
I think invitation would be a proper approach.
Senator Raggio:
There has been too much discussion behind closed doors and in
caucuses. We ought to bring this out into the open so we know where we are
going. That is a good suggestion. No one will be dragged before this Committee.
Senator McGinness:
As this bill is now, I cannot support it. We need to have
information on Senator Neal’s proposal, which will cause a ripple effect with
regard to the banks. Depending on what the numbers are, I would like to see
part of Senator Rhoads’ motion to change the BLT to $400 for the financial
institutions. It would be difficult for me to vote. I cannot vote until I see
all the other pieces of the puzzle.
Senator Raggio:
The motion is to introduce the BDR 32-43. We will meet again and
will invite anyone from the other House to make comments on this and to listen
to Senator Neal’s motion.
The vote was 7 ayes, 13 nays, and 1 abstain.
The motion failed.
Senator Hardy:
I am prepared to listen to any potential cuts. I said that when I
voted for Senate Bill No. 6. My mind is open, and I am anxious to make the cuts
being discussed. I would like to invite those who think the budget is excessive
to come before this Committee tomorrow to express those cuts so that we can
have an opportunity to consider them.
Senator Washington:
Along with the cuts, it would be incumbent to look at this tax
package to make certain it is not industry specific. If we are going to pass a
tax proposal, it should be fair and it should be equal across the board to
everyone, not just one industry.
Senator Coffin:
I do not hold out much hope that people will come forth with their
cuts. We know who they are. They will show their cuts to people every now and
then. However, they do not want to put them in print. They are secret cuts to
end the budget war. They do not surface when you need them.
Senator Washington:
The cuts have been put in print several times. They have been
expressed to the press as well. I do not know if you had the opportunity or not
to see those cuts, Senator Coffin. That is up to you. You can ask the people to
give you their cuts. I am certain they would show them to you.
Senator Raggio:
Is there a suggestion as to who should be invited to talk with
us?
Senator Washington:
We should invite Mr. Hettrick. He has stated his wishes
repeatedly. He has made press releases. Ask him to come and show you his proposed
cuts.
Senator Raggio:
If that is the Committee’s desire, we will invite Mr. Hettrick.
Senator Mathews:
I would like to request a list of the cuts so I would have an
opportunity to study them. We may be in agreement with those.
Senator Raggio:
I will ask Mrs. Erdoes
what our limitations are under in this special session. Are we within the
purview of the legal authority we have?
Mrs. Erdoes:
Because the proclamation
included language in terms of the budget bill, it is likely that would be included.
I would suggest that final determination be made with the Governor’s Office,
once you have that information, to make certain everything is covered by the
proclamation. Because the budget bill was indicated in the proclamation, you
could arrange some of those numbers. I do not know how far you could go to
change the budget and still be under the proclamation.
Senator Titus:
If you open up the budget and look at cuts, does that mean that
any of us could propose potential cuts? Once it is open, there might be some
money we might want to move from one project to another.
Mrs. Erdoes:
That is accurate. If you look at this BDR, you will see that we
amended section 16 and section 19 of A.B. No. 553 of the 72nd Legislative
Session. Some numbers were changed. They were reduced. My concern is that, if
this turns into a complete rehash of the general appropriations act, I do not
know how many cuts and how far you can go and still stay within the
proclamation. Some will be justifiable. I cannot tell you that if you
completely change the whole budget, you will remain within the call.
Senator Titus:
I would say to Mr. Hettrick, you show me your cuts, I will show
you mine.
Senator Cegavske:
One of the other discussions we have had is to give the Governor
the authority to pick a number―5 percent, 3 percent―and that he
make the cuts. Is that something you have looked at?
Mrs. Erdoes:
Yes it is. Are you asking if it would be within the proclamation?
I believe it would be. Again, if you make it 100 percent, then I am not certain
the Legislature could do that because I do not believe that then you are
carrying out your duties in terms of defining what the appropriations are. Cuts
at 3 percent is what I was asked before, and I think that works. Somewhere
between 3 percent and 100 percent, though, it will fall out of the call,
and you will not to be able to do that.
Senator Cegavske:
Of the $5 billion, that would be based on the total of the
budget?
Mrs. Erdoes:
Yes.
Senator Cegavske:
We do have the leadership from the Assembly Democrats here. They
might want to respond to any of the motions that have been made today whether
or not they would support any of the taxes that have been proposed. They are
sitting in the audience.
Senator Raggio:
I will not call on anyone, now, unless they want to appear. We
will invite anyone to appear tomorrow on these issues as long as they are
within the Governor’s proclamation to designate what we can consider during
this session. The Chair invites Mr. Hettrick, or others who have comments, to
speak with us tomorrow. That information will be used by this Committee, as
they deem appropriate.
On the motion of Senator Townsend, the committee did rise and return to the Senate Chamber.
SENATE IN SESSION
At 6:43 p.m.
President Hunt presiding.
Quorum present.
Senator Raggio moved that the Senate adjourn until Thursday, July 17, 2003 at 8:30 a.m.
Motion carried.
Senate adjourned at 6:44 p.m.
Approved: Lorraine T. Hunt
President
of the Senate
Attest: Claire J. Clift
Secretary of the Senate