Special Sessions and Lawsuits

I was fortunate enough to not be around during the 2003 legislative session, as I am told it was ugly.

There were two or three special sessions that lasted into July.

The governor filed a lawsuit against the legislature because of their failure to pass a budget on time.

The Nevada Supreme Court ignored the constitutional requirement that 2/3 of the Legislature must vote for any tax or fee increase (a decision they later reversed).

And the largest tax increase in state history was approved, which was somewhere in the neighborhood of $833 million.

It is that number that should be watched carefully. One line of thought has it that legislators will be loathe to pass a tax increase over that amount, because the campaign mailers in 2010 and beyond will read that they supported the (new) largest tax increase in Nevada history.

Some legislators have stated they want a new "broad-based" business tax.

Others, like Senator Raggio, seem to only support increasing existing taxes and would opppose creating new ones. Assembylman Pete Goicoechea has stated his public support for a sales tax increase, because it hits everybody. Senate Majority Leader Steven Horsford has stated that he is willing to go above and beyond the 2003 magic number and has hinted at some sort of "broadening" of the tax structure.

As the Governor has repeatedly stated that he will veto any and all tax increases, 2/3 of both houses will have to support the final tax package.

That means at least two Senate Republicans need to go along with the Democratic majorities in both houses. Bill Raggio has more power now than he ever had as Majority Leader. The Democrats need him to pass any tax package.

After the Governor receives a bill on his desk, he has five days to sign it, veto it, or let it become law without his signature. That means the Legislature has to send him a tax bill at least 6 days before June 1, the constitutional deadline for the end of session. If they do not get the budget/tax bill over to the Governor before Memorial Day, the Governor will have to call a Special Session in order to fund state services for the next two years.

The key is, the Governor determines what issues the Legislature may take up in a special session. If a special session necessity comes to pass, it will be the Governor's position that he can order the Legislature to consider the budget, but prohibit them from considering any tax increases.

The Legislature would argue, however, that while the Governor can limit the discussion to the budget, he can't limit the details (tax increases) of what the budget includes.

This is a situation ripe for lawsuits and court decisions, a la 2003.

The Speaker seemed to preclude all of this by saying that she is not willing to get into a legal fight and would just accede to the Governor's budget and adjourn on June 1.

This should get very interesting.