Lawmakers, governor reach budget deal

Gov. Jim Gibbons, Assembly Speaker Barbara Buckley and Senate Majority Leader Bill Raggio today announced a budget deal that paves the way for the end of the 2007 Legislature.

"Everybody gave a little," Raggio said from the steps of the Capitol. "While it isn't perfect, I think it's the nearest we can agree to."

Conspicuously absent from the press conference was Senate Minority Leader Dina Titus, D-Las Vegas. She reportedly said her 10-member caucus will stand solidly against the plan if necessary. But since she and other Democrats supported the compromise Monday until Gibbons balked at the business tax portion, it's likely she is using her leverage to get a couple of items added to the final budget.

The big concession by Democrats was that the Modified Business Tax will not increase from 0.63 percent of gross payroll to 0.65 percent July 1.

That will cost the state about $4.5 million a year in revenue compared with the original Democratic compromise offer of 0.64 percent. Gibbons originally objected to the demand by Democrats that reduction be made up by cuts in programs Gibbons wants, not those sought by lawmakers. But he accepted that deal Tuesday.

Lawmakers also agreed to support establishment of the Nevada ChalleNGe National Guard training program for young people who are in legal trouble.

It was the business tax rollback Gibbons wanted that caused the first deal to collapse Monday. He refused to budge, saying he had promised voters he would not raise taxes. He said allowing the sunset in the law to bump the tax back up to its original level amounted to a tax increase.

Buckley said more than $63 million was added to the K-12 education budget above what Gibbons originally proposed. That is enough to put all-day kindergarten in up to 63 schools and provide Gibbons' empowerment proposal to 29 schools statewide. There is also money to continue incentive grants to schools, which was funded at $100 million two years ago and partially used to begin the all-day kindergarten program.

Buckley said that program has been praised by teachers, parents and students.

Buckley said money for enhanced career and technical education programs is included in the spending plan - a total of $9 million over the biennium instead of the $2 million Gibbons originally included.

For higher education, Raggio said, the deal makes the university system whole by restoring the cuts made by Gibbons to reduce spending when revenue estimates were decreased by the Economic Forum. It keeps the increased per-student formula funding proposed by Gibbons and provides more than $50 million in "hold harmless" funding to protect the budgets and programs at campuses where enrollment is below projections. In the case of the University of Nevada, Las Vegas, enrollment is actually dropping.

And for professors who rely on the merit pool for increases in pay, the Assembly backed off its attempt to reduce the merit pool percentage from 2.5 percent to 2 percent this biennium only. That would have cut back the amount of money available to reward professors who perform well with a pay raise.

The Ways and Means committee approved the compromise proposal Tuesday afternoon. Chairman Morse Arberry, D-Las Vegas, said the bill will be prepared overnight, introduced and passed as an emergency measure by the Assembly today and sent to the Senate.

After speedy Senate action, the bill goes to the governor, freeing lawmakers from the restrictions of the Education First amendment in Nevada's Constitution which requires public schools be funded before any other agency or state need is budgeted for.

In anticipation of that, the money committees are scheduled to meet today to begin reconciling budgetary differences in a long list of agency accounts.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.