New Nevada tax initiative filed

CARSON CITY, Nev. — Backers of a Nevada business tax initiative to fund education filed a new version Tuesday with the secretary of state's office and said they will begin gathering signatures.

Supported by the Nevada State Education Association and other labor groups, the new initiative removes language that District Judge James Wilson ruled the day before violated state law by dealing with two unrelated topics.

Wilson's order said a provision in the initial version that called for the state Department of Taxation to publish the names of businesses and the amounts of tax they paid was too far removed from the measure's core purpose and violated Nevada's single-subject rule on ballot measures.

The measure filed Tuesday deleted that requirement.

The Education Initiative seeks to impose a 2 percent margins tax on businesses that gross more than $1 million annually. Supporters say it would generate about $800 million annually and increase funding for K-12 education.

It was challenged in court by the Committee to Protect Nevada Jobs, a pro-business coalition, which argued the measure's description of effect — a required synopsis limited by law to 200 words — failed to adequately explain the initiative's ramifications.

Besides the publication of business names and taxes paid, Josh Hicks, an attorney for the committee, also argued during a hearing last week, that a provision temporarily increasing taxes on financial institutions to fund startup administrative costs for the tax agency was also outside the scope of the initiative's intended purpose.

Wilson, however, disagreed, ruling that the margins tax proposal and temporary tax hike on financial institutions "are functionally related and germane to each other."

Hicks also argued that the initiative was misleading because it didn't guarantee money raised by the tax would increase funding for public schools, another argument rejected by the judge.

The business coalition could still appeal Wilson's ruling on those points to the Nevada Supreme Court.

In an email, Hicks said the committee had not seen the latest initiative language.

"Once the committee has had a chance to review (it) we'll decide on a course of action," he said.

In the meantime, the sponsors said they will begin gathering the more than 72,000 signatures needed by Nov. 13 to send the business tax proposal to the 2013 Legislature. If it advances that far, lawmakers would then have 40 days to approve it or it would automatically go to voters in 2014.

Gary Peck, executive director of the NSEA, said he was confident supporters would collect enough signatures to qualify the initiative.

[ljpierce_ely]

"Supporters say it would generate about $800 million annually and increase funding for K-12 education." Maybe it will generate $800 Million but all that means is that the legislature will subtract that amount from whatever funds they would have already budgeted for education from traditional sources. State governments everywhere do that. California passed the Lottery initiative years ago to "fund education". But when it came around to doing their budgets for the year, they subtracted from the education budget what the lottery was funding. Schools didn't get anything more at all. Smoke and mirrors. The ONLY way this will work for Nevada is if the initiative spells out that not only will the money obtained by this tax be used solely for education, but if the legislature is prevented from reducing the amounts budgeted for education from the traditional sources they've used all along.