Budget Talks Continue, Sandoval And Dems Poles Apart

(Sean Whaley/Nevada News Bureau) – Work on closing Nevada’s two-year $6 billion general fund budget will begin in earnest [May 3] after the Economic Forum today finalized its tax revenue projections for the coming two years.

But legislative Democrats and Gov. Brian Sandoval remain far apart on an acceptable spending plan even with a $218 million general fund revenue increase.

The Senate and Assembly money committees have scheduled a joint meeting Tuesday to consider the contentious public education budget now that the tax revenue picture is clear.

At a briefing after the Economic Forum completed its work, legislative Democrats said they will finalize their funding recommendations for public schools at the joint hearing at levels beyond the new forum estimates and beyond what Sandoval has proposed, setting up a showdown over the budget.

Identifying new revenues to fill any resulting funding gap remains a work in progress for Democrats, however.

Senate Majority Leader Steven Horsford, D-Las Vegas, welcomed the news of the enhanced revenue that totals about $274 million, but said it is not enough to fill all the gaps that remain in the budget.

“It is our responsibility as elected officials to lead, and our responsibility to pass a budget that meets our obligations to our students, seniors and to all Nevadans,” he said. “The governor’s budged did not do that yesterday and it does not do that today.”

Other Democrats agreed.

“That’s simply not acceptable,” Assembly Ways and Means Chairwoman Debbie Smith, D-Sparks, said of the level of funding in the public schools budget. “So tomorrow, we will move to close those budgets at an acceptable level.”

Sandoval said in a statement the state economy is too fragile to consider higher taxes: “We must, however, realize that while today’s news is welcome, our state’s economy is still fragile. As the Legislature continues to close budgets, it is of the utmost importance to maintain our business-friendly climate to help foster job growth and put our fellow Nevadans back to work.”

The Economic Forum, a panel of private-sector fiscal experts, raised the outlook for most of the state’s tax revenues after an all-day hearing, with the notable exception of gaming. When all was said and done, the general fund will see just under $218 million in new revenue for the next two years.

Because the panel upped the projection for the state share of the sales tax, the schools share of the tax will also benefit by about $113 million. With a reduction due to property tax calculations, the total new funding is $274 million available to Sandoval and lawmakers as they work to finalize a budget for the two fiscal years beginning July 1.

Sandoval said he wants all of the new funding to go to the public education budget.

Democrats in the Legislature say that the additional revenue is inadequate to fund necessary services for the next two years, leaving Sandoval and Republican lawmakers at odds with their Democrat counterparts.

Democrats do not have the votes, however, to raise taxes without support from Republican lawmakers. It requires a two-thirds vote to raise taxes and to override a veto from the governor.

Sandoval will address the state on television at 6 p.m. tomorrow to make the case for support of his budget with the enhanced revenues. Sandoval has vowed to veto any funding plan that requires new taxes or fees.

Complicating the budget dispute is the time element. The Legislature must adjourn its 120-day session by June 6.

Democrats will soon have to introduce a tax plan in order to fully fund the K-12 budget they will propose tomorrow.

Even with today’s revised projections, the gap between what Democrats want and what the governor proposes is about $1 billion just for the K-12 budget.

Horsford said the first order of business is to finalize the budget and determine what level of new spending is required, but the clock is ticking on a revenue plan. If Democrats can muster support for a tax increase, any such measure would have to be passed by the end of the month in order to have time to override a Sandoval veto.