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September 22, 2014

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District judge rules tax petitions invalid

CARSON CITY – A district judge ruled today that tax petitions pushed by Las Vegas casino owner Sheldon Adelson were defective and should not be on the November election ballot.

District Judge Todd Russell said this was a “harsh remedy” and would “disenfranchise thousands of voters” but the initiative petitions did not follow the law.

And before he made his ruling, he predicted that the case would be appealed to the Nevada Supreme Court.

The judge heard oral arguments for two hours before announcing his decision.

The initiatives would divert future increased room tax money from the Las Vegas Convention and Visitors Authority and sent it either to the public schools or to other government functions.

Former State Controller Steve Martin, a backer of the three initiatives, refused to say whether the ruling by Russell would be appealed to the Supreme Court.

The judge said it was clear the 2007 Legislature imposed the rules that those who circulate initiative petitions must attest to the number of people who signed the documents and that the signers had an opportunity to read the full constitutional amendment that was being proposed. That information wasn't on the petitions that were circulated, the judge said.

Two of the proposed amendments would freeze the amount of room tax collections going to the convention authority based on fiscal year 2006-2007 but it would be adjusted annual for inflation.

The collections above that amount would be shifted to governmental functions. One petition would send all the extra money to the public schools. In the other petition, one-third of the extra money would go to the schools, one-third for building highways and one-third for public safety.

A third initiative would require that any tax increase by initiative petition would have to be approved by two-thirds of a vote by the public. At present the Legislature is required to have a two-thirds vote to raise any taxes.

Supporters said there would be millions of dollars being shifted away from the convention authority to governmental functions.

All three petitions had more than 100,000 signatures. To qualify for the ballot, 58,628 signatures of registered voters were needed. And they required 10 percent of the signatures of voters in each of the 17 counties.

The petition to send money to the schools alone had 108,000 signatures. The one to put the money into the schools, public safety and transportation contained 110,000 signatures. And the two-thirds vote tax petition gathered 120,697 signatures.

Scott Scherer, attorney for Nevadans for Fair Taxes that supported the petitions, said there was “substantial compliance” in gathering the signatures for the petition. He said there was no evidence of fraud involved in the gathering of the signatures.

Judge Russell asked Scherer how long it would take to correct the defective affidavits. Scherer said that could be accomplished in one or two weeks.

But in his ruling, the judge said, “We can’t go back and un-ring the bell.” He said the signatures of voters were collected under different standards and the backers should not be given a second chance to correct their mistakes.

Russell sided with the arguments of Senior Deputy Attorney General Nhu Nguyen who represented the Secretary of State’s Office; Todd Bice, Las Vegas attorney for the convention authority and Mike Dyer representing the Nevada State Education Association.

Bice said the proponents of the initiative petitions “just didn’t read the statute,” on the requirements that circulators must sign affidavits about the number of signatures and attest they gave signers a chance to read the full document.

Now, he said they are trying to blame others for their failure.

Russell said the secretary of state’s office did not exceed its authority when it judged those documents did not comply with the law. But he also criticized the secretary of state’s office for failing to update the voter guide in explaining what must be done in circulating the petitions. “The secretary could have done a better job,” he said, adding there were other failures by the office in handling this case.

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