Senate Republicans reimbursed for court fight over tax

The Legislature on Saturday, May 22, 2021.

The Legislature on Saturday, May 22, 2021.
Photo: David Calvert / The Nevada Independent

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The cost of the attempt by legislative Democrats to get around Nevada’s Constitution came home to roost Tuesday.
The Board of Examiners approved paying Senate Republicans $150,000 to reimburse them for their legal battle to prevent removal of statutory sunsets of higher rates for the Modified Business Tax and a DMV technology fee.
Together, preventing those tax rates from sunsetting would have generated just over $100 million in revenue for the 2020-21 budget. But with all eight Republican senators on board, the Democrats could only get 13 votes in favor of the plan. That is one vote short of the constitutional mandate that any bills generating more tax revenue must get a two-thirds majority.
Democrats argued they weren’t raising taxes, just keeping them at the existing level.
The DMV fee was only worth about $6 million. But the MBT rate was worth $100 million. It was based on a temporary increase in the business tax rate to cover a shortfall in 2015. That legislation returned the MBT back to the lower rate effective in 2019
Led by Minority Leader James Settelmeyer of Douglas County, the Republicans sued, arguing that in the past eliminating sunsets had always been treated as a tax increase.
He said at the time that, “Democratic leaders knowingly violated the Nevada Constitution.”
They won the battle in Carson District Court and a unanimous vote by the Nevada Supreme Court upheld that decision.
Settelmeyer said Tuesday the $150,000 is about half the total cost of the legal battle. But he said under Nevada law, they can only get attorney’s fees through the district court process, not the appellate court battle. He said, however, they proved their point with the victory.
In the last analysis, the funding issue was moot after the Economic Forum raised revenue projections by $909.7 million so the reduction in MBT and elimination of the DMV technology fee made no impact on the state budget.
In addition, the board consisting of the governor, secretary of state and attorney general approved $200,922 for Ignacio Dealba, who was wrongfully convicted and imprisoned for nearly three years before he was ruled not guilty of the crime.
That total includes $25,000 in attorney’s fees.
The order from the court also allows Dealba to seek future reimbursement for tuition, books and fees if he decides to attend Nevada System of Higher Education institutions as well as support for health coverage through Nevada Health Link.
He was originally convicted in Clark County on charges of conspiracy, robbery with a deadly weapon and attempted murder.

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