Teachers union seeks 5 percent profits tax

Monday, May 24, 1999 | 11:57 a.m.

CARSON CITY -- Nevada's teachers union announced today it would start a ballot drive next year to impose a 5 percent tax on the profits of business to provide up to $150 million a year for education.

About 340 delegates to the convention of the Nevada State Education Association voted overwhelmingly Saturday in Reno to support the drive.

Elaine Lancaster, elected to a third two-year term as president of the association, told a news conference today the public schools are not properly funded. Besides the need to increase teachers' pay, schools require more money for training, school supplies, summer school and intersession classes, she said.

The organization, which has 21,000 members, must gain the signatures of 44,009 registered voters on a petition by Nov. 14 next year to submit the initiative to the 2001 Legislature, which would have 40 days to act. If the lawmakers did nothing, the issue would go on the ballot in 2002.

The Legislature could not change the petition, but it could approve a competing petition to go on the ballot.

The education association conducted a similar drive in 1989 and succeeded in getting the measure on the 1990 ballot.

But an agreement was reached among the association, business and political leaders to pump more money into education. So the teachers union withdrew support for its own petition and the initiative was soundly defeated.

Lancaster noted that the 1991 Legislature was the last session that provided teachers a decent pay increase.

Greg Ferraro, a lobbyist for a number of businesses in the Legislature, said the petition was premature. He said Gov. Kenny Guinn has promised to do a study of the taxation structure of Nevada.

Nothing should be done, he said, "until we learn who is paying and who's not paying." His clients include insurance, gaming, mining, utilities and airlines.

Pete Ernaut, Guinn's chief of staff, said the teachers' decision was understandable because they have long sought to broaden the tax base.

He questioned, however, who would determine the profits made by each business. "It would be tantamount to setting up a mini-IRS and that may be problematic," he said.

"We have to have discussions on a stable tax base for education, crime prevention and social services," Ernaut said. "That needs to be done."

Jim Mulhall, vice president for government relations Nevada Resort Association, said he had no comment until he sees the petition.

Ken Lange, executive director of the teachers union, argued that Nevada's tax base is too narrow and volatile to meet the projected needs.

"While we were able to squeeze by this time, this will be the last session we will be able to do this," he said.

Nevada is one of three states without a corporate income tax, he said. The other two are Wyoming and South Dakota. California has a 9.3 percent levy on business profits, Lange said.

Lancaster said the union has committed $1.3 million toward gathering the signatures and promoting the tax to the voters.

The estimated $150 million to be raised each year would be in addition to the $1 billion being spend now on the public schools, union officials said.

Teachers expect some of that money would go to their salaries.

Nevada's average salary, $38,883, is below the national average and dropping, Al Bellister, research director for the teachers association, said.

Nevada teachers rank 21st in the nation in pay, and while the Nevada Legislature provided no money for teachers' raises, other states have given teachers pay raises, he said.

Beginning annual salaries in Nevada, Lancaster said, were $4,000 lower than other states. And such places as Clark County -- where the average annual salary was $38,711 -- are having problems attracting teachers to keep up with growth, he said.

Lange said a tax on business profits would lead to improvements in school achievement. That would produce a better work force to attract more business, rather than scaring business away.

Lancaster said association polls show the public is willing to support additional funds for education.

A poll by the University of Nevada conducted late last year showed 68 percent of those sampled believed more should be spent on public education. And 62 percent would support a tax on corporate profits.