Budget negotiations stall

Budget negotiations stalled Monday night " apparently over the size of the sales tax increase in the tax puzzle.

The GOP has been arguing for a sales tax increase of half a percent in order to lower the amount the Modified Business Tax has to be increased.

Democrats want to hold the sales tax hike to a quarter percent.

Those two taxes are the largest elements in the plan to cover Nevada's budget shortfall. A quarter percent sales tax generates an estimated $193.4 million over the biennium. A half percent increase would cover double that.

The business tax would basically double under the Democratic proposal, going from 0.63 percent to 1.25 percent. The result is an estimated $349.8 million in additional revenue. On top of that, they want to double the annual business license fee " from $100 to $200 a year " charge it for every physical location each business has instead of just one location and assess it on every business registered with the Secretary of State. Several hundred thousand businesses registered with the state pay nothing now because they don't have a physical office in Nevada.

Together, those changes bring in an estimated $71.6 million over the biennium.

In addition, they are still trying to resolve disagreements over several policy issues including changes to the state employee retirement and benefits plans, the proposal to relax prevailing wage requirements for contractors and others and others doing business with government and the plan to grant non-economic bargaining to state employees.

The so-called core group met for hours behind closed doors Monday trying to resolve the issues.

While none of the lawmakers wanted to give specifics when they finally emerged from the closed session about 9:30 p.m., several expressed confidence they'd get agreement by today.

"We don't have a lot of time left," said Senate Majority Leader Steven Horsford, D-Las Vegas..

He said they know how much revenue must be produced to pay for the budget, which he earlier estimated at "just south of $7 billion.

"It's how you get there," he said

.Assemblywoman Sheila Leslie, D-Reno, said they would finally agree today because they have no choice.

Other parts of the tax proposal include slowing the depreciation rate for the tax on annual vehicle registrations by 10 percent a year. That generates an estimated $94.3 million for the coming two year budget cycle.

In addition, the business tax would be changed to try capture independent contractors working for business. Analysts say that should generate a significant amount of money but that there is really no way to accurately project the amount.

Those negotiatons were being headed by Sen. Warren Hardy, R-Las Vegas, and Assembly Majority Leader John Oceguera, D-Las Vegas.

Lawmakers had planned on finishing a deal and introducing the compromise tax bill Monday. They have to not only introduce it but pass it before the end of the week in order to have time to override a promised beto by Gov. Jim Gibbons before the end of the 120 day session.

If they fail to do so, Gibbons could send them back in special session to finish a budget without giving them the option of raising revenues since the governor controls the agenda in any special session.

Horsford said some members were planning to continue discussions into the night Monday. The core group, he said, would resume negotiations this morning.