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State budget deal reached: compromise on education, taxes

State budget deal reached: compromise on education, taxes

CREATED Jun 1, 2011

CARSON CITY, NV -- The Nevada State Legislature and Governor Sandoval's office reached an agreement early Wednesday on a state budget.

According to a statement issued by the Governor's office, the agreement represents historic reforms in education, collective bargaining, public employee benefits, and construction defects. 

It also balances the state budget, includes no new taxes, and partially extends "sunset" taxes by only two years.

The agreement will also completely eliminates the modified business tax on 70% of Nevada businesses, meaning 115,281 Nevada businesses will no longer pay the MBT. 

Total state spending will decrease biennium-over-biennium by $500 million.

Other points of the agreement include:

  • Ending of teacher tenure.  Poor-performing teachers are placed back on probation for ease of dismissal if necessary.
  • It also ends the seniority system in school district lay-offs. Other factors, including performance and effectiveness, must now be included.
  • Dramatically changes collective bargaining for local government employees.  Agreements will be re-opened during times of fiscal emergency and supervisory employees will not be allowed to collectively bargain.
  • Allows the governor to appoint the state superintendent of public instruction.  A new State Board will also have members appointed by the governor and legislative leaders, as well as four members elected by the people of Nevada.
  • Saves an estimated $275 million over the next 30 years by removing eligibility of newly hired state employees for health insurance benefits during retirement under the Public Employee Benefit Plan, effective January 1, 2012.
  • Allows passage of construction defect legislation this session.  AB 401 will set new definitions and revise the statutes of limitation and repose.
  • Conducts a complete analysis of PERS in order to give the 2013 Legislature and the Governor information they need to address unfunded liability.  The study must include recommendations with actuarially-sound alternatives.

The new deal was hammered out in five days and with only five days remaining in the scheduled session.