Tax plans died in both the Senate and Assembly on Saturday night, unable to win the constitutionally mandated two-thirds vote in either house.
That forced Gov. Kenny Guinn to lift the 5 p.m. Sunday deadline for ending the special session. He, Speaker Richard Perkins, D-Henderson, and Senate Majority Leader Bill Raggio, R-Reno, agreed lawmakers would adjourn until Tuesday to give fatigued staff some rest before returning to try finish the battle.
Raggio said he hoped to have an amendment Tuesday that would add a couple of votes and push the tax plan over the two-thirds mark. It fell one vote short Saturday -- 13-8 -- when Senators expected to support the plan, including Mark Amodei, R-Carson City, changed their minds because of concerns there was no cap on the amount of net profits tax an individual company could be charged.
Amodei said earlier in the day some companies have told him the bill could hit them for millions in taxes unless it was capped.
"If that's the only issue and that's what they're telling me, we can get it done," said Raggio.
But Ann O'Connell, R-Las Vegas, said opponents would hold out until the budget is reopened and cut.
"We can pass a bill that takes out the money," she said.
Guinn said that's not going to happen because he controls the agenda. He said more than two-thirds of both houses--including the opponents -- voted for the budget.
"If they didn't want to fund it, they shouldn't have passed it," he said.
Guinn said since public education's funding is tied up in the battle, the school system will have to basically shut down July 1 unless the opponents agree to pass a tax plan.
Perkins questioned whether lawmakers should take a couple of weeks off before trying again.
"I can't see where 24 hours is going to change anything," he said after the combined tax and education funding package died 23-18 on a party line vote. Both plans center on a net profits tax -- the Senate calling for 3 percent on all businesses and the Assembly 5 percent. The Senate tax package would raise an estimated $862.5 million over the next two years and the Assembly version $866 million.
The budget, which has already been signed into law by Guinn except for the two bills providing $1.71 billion to fund public education. To pass those bills and balance the budget, lawmakers must increase taxes $860 million over the biennium.
The outcome in the Assembly was obvious even before the floor debate. As the session convened, Assemblyman Ron Knecht, R-Carson City, who has opposed any tax increase since the session started, grinned broadly as he flashed reporters a thumbs down sign."
Republicans led by Lynn Hettrick, R-Gardnerville, protested combining the tax plan with the education funding bills saying it was an attempt to make tax opponents look as though they oppose education. He said they should be allowed to vote on the education funding separately.
But Perkins said he wasn't about to allow the Republican anti-tax group to vote for education and then refuse to approve the necessary funding.
Assemblywoman Chris Giunchigliani, D-Las Vegas, said the nay-sayers have never come up with a plan to fund the budget and never been willing to compromise. She said refusing to pass a tax plan is the same as refusing to fund Nevada's public schools.
"If you can't deal with that, you shouldn't have run for office," she said.
"Put your money where your mouth is."
The vote was along party lines with Republicans against the tax hikes.
In the Senate, the opposition was also Republican except for Maggie Carlton of Las Vegas -- the only Democrat to vote against in either house. She said she doesn't believe the proposal based on a net profits tax does enough to broaden the tax base and that the plan doesn't raise enough money.