Teachers association gets head start in selling business tax hike

CARSON CITY — The November 2014 election is still more than 16 months away but the Nevada State Education Association on Wednesday kicked off its effort to win voter approval of its business margins tax with a $1 million donation to the effort.

Political consultant Dan Hart said the money will be used to get the campaign for The Education Initiative, which would impose a margins tax on business to raise an estimated $800 million a year for public education, underway.

The initial funding, coming from a special assessment members imposed on themselves for political activity, will be used in part to start the education effort for voters and to begin to build the support network that will be needed to get voters to the polls on Election Day, he said. It was donated to a political action committee that will fund the effort.

The teachers association announcement included a new website to push the ballot measure.

Gary Peck, executive director of the Nevada State Education Association, said: “We are proud and excited to help the PAC kick off the campaign to provide a dedicated, predictable source of revenue for our kids’ education.”

Bryan Wachter, director of government affairs for the Retail Association of Nevada, said opponents of the measure will match the teachers step by step in educating voters on why the tax is bad for Nevada.

“The teachers will need to prove their case,” he said. “The margins tax has not worked in Texas and it will not work here.”

The proposal will stifle job growth, hurt the economy and there is no guarantee the money raised will be spent on education, Wachter said.

Opponents are organized as the Committee to Protect Nevada Jobs, and are led by the Las Vegas Chamber of Commerce and the Nevada Taxpayers Association, among others.

Gov. Brian Sandoval is also opposed to the measure.

Hart said the campaign will spend money on television and other media, but much of the effort will involve identifying supporters who will serve as the foundation to help with voter turnout.

The association and other supporters will spend as much as they can raise, but it likely won’t be as much as the opposition will spend, which anecdotal information suggests could range anywhere from $3 million to $10 million, he said.

“If the election was held today we would win,” Hart said. “But it isn’t and that will give our opponents a chance to cloud and confuse the issue a bit. It is how they will try to gain an advantage. We’ll have to do some counterpunching.”

The tax would impose a 2 percent margins tax. Businesses could deduct some but not all of their expenditures before calculating the tax, and the first $1 million of their earnings would be exempt. Because it is not a business profits tax, some businesses that are losing money would be required to pay it.

Hart said he is not aware of any recent polling on how the margins tax is faring with voters.

A survey of voters by the Retail Association of Nevada in February showed 58 percent in favor and 39 percent opposed.

But when asked if they agreed with one of two statements: that the tax is needed to support education or that it will increase unemployment and cause struggling businesses to fail, the survey showed voters evenly divided at 48 percent.

Contact Capital Bureau reporter Sean Whaley at swhaley@reviewjournal.com or 775-687-3900.