Union sure tax will pass

Monday, April 10, 2000 | 10:54 a.m.

CARSON CITY -- The state's largest teachers union believes it will win out over Gov. Kenny Guinn and industry leaders to impose a 4 percent net profits tax on businesses to raise $250 million a year for public schools.

Elaine Lancaster, president of the Nevada State Education Association, said the public will listen to educators over Guinn and the Legislature.

Guinn, through a spokesman, called the initiative petition "divisive" on Saturday and said he wanted to bring everybody together to hammer out a solution to Nevada's financial problems.

"He (the governor) intends to get the word out that this is bad for Nevada," Guinn's spokesman Jack Finn said. "The fiscal situation demands real leadership, and he's in a position to provide that leadership."

But Lancaster said the association isn't going to retreat from its position, as it did in the early 1990s when it backed a corporate income tax, then agreed to compromise. The state Legislature then passed a much smaller tax increase than the teachers had advocated, and education needs did not get the funding teachers had sought.

This time, she said, "There is no room for discussion" until the 2001 Legislature creates an alternative plan that will put an additional $250 million into public education and the governor signs it.

In an address to some 350 cheering and applauding delegates at the association's convention over the weekend, Lancaster said, "The political structure of Nevada has been unable to muster the courage to create the resources we need." So the union has had to take the lead, she said.

The first $50,000 of net profits would be excluded from the tax, meaning, Lancaster said, that one-fourth of the state's businesses won't pay anything.

Mining operations would be exempt because of a ban in the Nevada Constitution, the association said.

The tax will be imposed on all gaming profits, including those coming from slot machines and table games. The association had talked about excluding those profits, but Al Bellister, the financial expert for the union, said it was an issue of fairness.

Bellister said the casino industry would pay only $15 million to $17 million of the tax.

Bill Bible, director of the Nevada Resort Association, declined comment, saying he hasn't seen the 28-page initiative petition. He said he would be consulting with his members, most of them big gaming operations in Las Vegas, on what position to take.

Lancaster said 52 percent of the tax will be paid by businesses that earn a profit in Nevada but are located outside the state.

Kara Kelley of the Las Vegas Chamber of Commerce said Saturday a statewide coalition of businesses has been formed and is raising $2.1 million to defeat the initiative petition.

She called the teacher efforts "special interest politics."

Kelley said she thinks the 22,000-member union will get the required 44,009 signatures to put the initiative on the ballot. But she doubts the Legislature will approve the plan. And she said the real fight will come during the 2002 election, when voters would decide the issue for good.

She lobbed the first volley from the business community, noting that while money raised from the tax could be spent for a variety of purposes such as reducing class size, providing remedial instruction to students or buying computers, all or most could go for teacher pay increases.

Kelley said the average teacher in Nevada now makes $39,000 a year, and Nevada is tops in the nation in contributing to teachers' pension plans. Fifty-five percent of the state's budget goes to education from kindergarten through college, she said.

"This is simply an opportunity for the union to create a large pool for salaries," Kelley said.

Lancaster replied that Nevada teachers salaries are not competitive. "Despite the stellar economy, our paychecks have barely kept pace with inflation and in many cases have not." The average starting salary for a teacher is $25,000 to $26,000 a year, which puts Clark County below most of the urban districts in the nation, said Bellister.

"If the teachers union could prove to taxpayers and the public that every dollar is being spent wisely," Kelley said, "plus identify the legislative needs that will result in a net gain in student achievement and performance, then the business community would be more than likely to meet and resolve the challenges.

"No one cares more than business, except parents, about education," she added. "It is spending hundreds of thousands of dollars for remedial training (for new employees who come out of school). Businesses adopt schools, provide mentoring programs, job shadowing and help with fund- raising for schools."