Lawmakers, Gov. Sandoval Announce Budget Deal - KTVN Channel 2 - Reno Tahoe News Weather, Video -

Lawmakers, Gov. Sandoval Announce Budget Deal

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From the Office of Governor Brian Sandoval:

Governor Brian Sandoval joined Legislative leadership today to announce a budget and reform agreement for the upcoming biennium.

"This afternoon, I am proud of Nevada," Governor Sandoval said. "We have reached a groundbreaking agreement to bring the 2011 Legislative Session to a successful close by June 6th."

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.

Sandoval says the court's $62 million decision made it imperative to extend those sunset taxes. "It overcomes the hole created by the unprecedented Nevada Supreme Court decision last week and still ensures those taxes that were necessary to balance the budget sunset two years from now."

That money and some diversions the governor wanted to take from education will now indeed go toward funding education.

Higher education will be cut about $100 million over the next two years, instead of $160 million Sandoval previously recommended. 

"We will have the funds to improve crumbling schools, we will save teachers and students from overcrowded classrooms. We will restore per pupil spending to adequate levels," says Sen. Steven Horsford.

The agreement 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.

The agreement:

  • Ends teacher tenure.  Poor-performing teachers are placed back on probation for ease of dismissal if necessary.
  • 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.

"As a result of unprecedented direction by the Supreme Court, we have done this work in five days, often working around the clock with our staff," Sandoval added. "I'm proud of the hard work of all our legislators, from both parties and both houses, in finishing the people's business on time. Nevadans deserve leadership, stability, and consensus, and I believe this budget and reform package provide all three."   

Talks accelerated after a state Supreme Court ruling last week, and got a boost on Memorial Day when the Senate passed two education reform bills.

(The Associated Press also contributed to this report.)

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