Sun coverage
Related column
Under a Democratic state budget plan that will be unveiled today, businesses would pay taxes on gross revenue instead of payrolls, consumers would pay a small tax on services and tax increases passed in 2009 would become permanent, according to a draft obtained by the Sun.
The plan would generate $1.5 billion to offset deep cuts in education and social services in the budget put forward by Gov. Brian Sandoval, who has pledged to not raise taxes.
Assembly Speaker John Oceguera, D-Las Vegas, and Senate Majority Leader Steven Horsford, D-North Las Vegas, will outline their proposal today at a town hall meeting with community and business leaders.
According to an initial version of the presentation obtained by the Sun, the pair will argue that three months of budget hearings have proven the need to raise taxes to fund $220 million in new education reform programs, offset cuts to education and social services and replace Sandoval’s short-term funding strategies with a more stable tax structure.
The source who provided the presentation cautioned that Democratic leaders were still working on the details and would continue to refine the numbers throughout the rest of the week.
Oceguera and Horsford want funding to offset $403 million of Sandoval’s proposed cuts to K-12 education. They also will propose $220 million in new funding for a literacy program, an after-school remediation program and a pay-for-performance program.
Although joint money committees this week rejected Sandoval’s 5 percent pay cut for teachers and school employees, the presentation indicates they may eventually settle on a 2.5 percent pay cut.
Under the plan, higher education would take a 10 percent cut compared to the last biennium, but would see $123 million more in funding than Sandoval proposed.
Health and Human Services would see an additional $174 million in funding over that proposed by Sandoval.
Democrats also want to reject Sandoval’s plan to take $302 million in school district debt reserves and his proposal to borrow $192 million against future insurance premium tax revenue.
Democrats will argue the short-term funding options would open a significant budget hole for the next Legislature to deal with and result in continuing uncertainty about the future tax environment for businesses.
After arguing the need for new revenue, they will present details for generating it, though revenue estimates are in flux. They include:
• Eliminating the sunset on the 2009 tax increase, generating $626 million;
• Creating a 2 percent to 3 percent sales tax on services, while gradually lowering the sales tax rate on goods by 1 percent, $282 million;
• Creating a 1 percent business franchise tax on gross revenue, with a $1 million exemption, while gradually eliminating the payroll tax, $282 million;
• Additional revenue from updated and more optimistic Economic Forum projections takes care of the balance.
Sun archives
- Sandoval pushes for budget with reduced cuts (5-3-2011)
- Economic Forum forecast adds $217M to general fund (5-2-2011)
- State revenue forecasters to project an additional $72 million to offset budget hole (4-26-2011)
- Senate Republicans refuse to play ball on budget test votes (4-25-2011)
- Shelley Berkley admonishes Nevada lawmakers not to gut education (4-20-2011)
- First public budget debate before full Assembly ends in predictable stalemate (4-20-2011)
- New style of budgeting — probably not a new result (4-17-2011)
- Democrats take budget fight out of money committees, bring it to the floors of the Assembly and Senate (4-11-2011)
- Raggio-style deal-making a no-go this time (4-3-2011)
- Horsford doggedly attacks Sandoval’s budget cuts (3-29-2011)
- Horsford to lawmakers: ‘Talk about our revenue needs’ (3-28-2011)
Join the Discussion:
Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.
Full comments policy