CARSON CITY – The Nevada State Education Association jumped the first of two big hurdles Friday in its race to force the state Legislature to consider adopting an
$800 million-a-year tax increase for public schools.
The secretary of state’s office ruled that the teachers union had collected 107,298 valid signatures for its 2 percent business profits tax petition, far more than the 72,234 required.
The second hurdle is the state Supreme Court, which must decide whether the 200-word description on the petitions signed by registered voters sufficiently explains the intent of the tax.
If justices determine that it does, then the proposal will become one of the hottest and most controversial items before the Legislature in February.
It’s not clear how they will rule.
Nevada State Education Association President Lynn Warne expressed confidence that the Supreme Court will rule for the teachers.
“More than 100,000 valid signatures are ready to be presented to legislators in Carson City. The opponents to the initiative should not be permitted to impede the right of Nevadans to make their voices heard when the Legislature convenes in February,” she said.
“Nevadans understand what this initiative will achieve. This initiative is about dedicated revenue for K-12 funding, corporations paying their fair share, and all of our children being given an opportunity to succeed.”
In a Supreme Court hearing Wednesday, Justice Ron Parraguirre said the petition’s description did not mention the fact that even businesses losing money would pay the tax.
“Isn’t it ‘material’ that losing businesses still pay?” Parraguirre asked union attorney Francis Flaherty.
Flaherty argued that there is only so much room – just 200 words are allowed for the petition’s description – to list the measure’s effects.
Lawyer Josh Hicks, who represented businesses opposed to the tax, has said repeatedly that there is no guarantee that the money collected from the tax would lead to increases in funding for public education.
While money from the new tax would be placed in the state’s education fund, Hicks contended legislators could back out funds they now spend on education and spend that money on other parts of the state budget.
Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, said last week that legislators are likely to develop their own version of a business margins tax in February. Such a measure would compete with the teachers tax on the ballot.
She said there are technical problems with the union initiative. One of them is that unprofitable businesses would be taxed, and another is the cost of assessing the tax.
Kirkpatrick led the Assembly Taxation Committee, which held two weeks of hearings on a business margins tax at the 2011 legislative session without bringing a bill up for a vote.
Under law, successful petitions must be considered by the Legislature within the first 40 days of each session.
If legislators reject the business tax, then the matter would be placed before voters during the 2014 election.
But legislators can adopt an alternative version of a business margins tax. This tax, with the union proposal, would be placed before voters. The plan that receives the most votes, if it were a majority vote, then would become law.
“We can do it more quickly and do it better, and then in 2014 both will go on the ballot,” Kirkpatrick said during an interview. “I am not saying yes yet, but we have to evaluate our options.”
In 2006, two competing anti-smoking ballot initiatives were placed before Nevada voters. The more restrictive proposal – supported by health groups – blocking smoking in most restaurants and bars won voter approval.
Legislators had prepared an alternative question for the 2012 ballot in an attempt to stop a petition that required higher sales taxes for a $500 million sports arena in Las Vegas. But the Supreme Court threw out the sports arena petition, so there was no need for an alternative plan.
Gov. Brian Sandoval already has vowed to veto any new tax that is approved by the Legislature next year.
Democrats are four votes short of the two-thirds majority needed to override governor vetoes and pass new taxes.
Contact Capital Bureau Chief Ed Vogel at firstname.lastname@example.org or 775-687-3901.