Legislature will set budget first, then decide taxes

The 2003 Legislature has been stalled since February over the "chicken or egg debate."

Which do they decide first -- how to raise taxes, or how much they're willing to spend in the budget?

The debate ended this week when legislative leaders decided to wrap up the budget first. Then they'll take on the sticky issue of which taxes will be raised to meet it.

As Senate Majority Leader Bill Raggio, R-Reno, put it Tuesday: "The chicken has now laid an egg."

Assembly Speaker Richard Perkins, D-Henderson, said the proposed budgets seem "less contentious" than the tax-increase proposals, so those can be settled first.

"It's not something where we got together and said this is what's going to happen," said Assembly Speaker Richard Perkins, D-Henderson.

Until this week, the Senate Finance Committee and the Assembly Ways and Means Committee held off closing anything except small, non-controversial or non-general fund budgets.

But neither Taxation Committee has seemed willing to step forward and act on tax increases, despite having comprehensive plans from Gov. Kenny Guinn, the Task Force on Tax Policy, Nevada businessmen and from Senators Terry Care, D-Las Vegas, and Mark Amodei, R-Carson City.

Both taxation committees met Tuesday and, again, took no action on proposed tax increases.

The budgets-first, taxes-second approach became obvious the first two days of this week as subcommittees settled on mental Health and developmental disabilities budgets, then closed the University and Community College System budget -- second biggest in the state after K-12 public schools funding.

The Distributive School Account, largest budget in state government and the base for public school funding, will close next week, as will Medicaid -- the state's next largest budget. Subcommittees are already most of the way through the Department of Motor Vehicles, prisons and public safety budgets.

Ways and Means Chairman Morse Arberry, D-Las Vegas, said committee members hope to have more than 80 percent of the state budget hammered out by the end of next week.

Arberry and Raggio will begin presenting subcommittee reports to their individual committees next week, finalizing the state budget for the coming two years.

Arberry said it wasn't as much a strategic decision as a necessity that they close the state budget even though no tax plan is ready.

"It appeared no one was ready to start driving the ship," he said. "We have to close these budgets and they're just going to have to find the fuel, because we can't wait until the last week of the session."

"We've got to close budgets and then figure out what it's going to take to fund these things," added Raggio.

Arberry said, however, the budgets are generally closing "very conservatively," for the most part following Guinn's recommendations in the executive budget.

"We haven't done anything outrageous so if we have to adjust, it won't be a major change," he said.

Sen. Mike McGinness, R-Fallon, said lawmakers in past years have usually settled on the budget before finalizing revenue issues.

"It always seems like they spend the money before they have the revenue," he said. "It's been hard because the numbers we're shooting at have been a moving target as well."

McGinness said the number they have been working with is the $704 million over the biennium Gov. Guinn says is needed. He said the figure will become more firm after the Economic Forum gives legislators its revenue estimates later this week.


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