Casinos see interest in legal struggle over teachers’ tax

Tuesday, Nov. 14, 2000 | 11:24 a.m.

CARSON CITY -- Big casinos in Las Vegas are going to jump into the middle of a district court battle over the constitutionality of a proposed 4 percent business profits tax sought by the teachers union in Nevada.

The Nevada Resort Association does not intend to take sides in the suit, which pits the teachers against business, but it wants to make sure that any court ruling does not limit the state's ability to tax business in general.

The association intends to file a friend of the court brief in the case now being heard by District Judge Mike Griffin.

Association President Bill Bible said today, "We want to make sure that any judicial interpretation does not narrow the ability to tax some forms of business."

If the state needs additional revenue, Bible said, it should be a broad-based tax, not focused on one industry such as casinos.

The issue was raised Monday at the start of the court hearing between the Nevada State Education Association and chambers of commerce and small business. The chambers and business have filed suit to invalidate an initiative petition that would impose a 4 percent tax on profits above $50,000.

It alleges that the petition is flawed and that there are several unconstitutional sections. The suit contends the tax petition, which was certified with 63,000 signatures, would also apply to some individuals and that would amount to a personal income tax. The Nevada Constitution prohibits a personal income tax.

That makes the petition defective, says the business suit.

The gaming industry dodged a bullet last week when Sen. Joe Neal, D-North Las Vegas, announced he would not have enough signatures on his initiative petition to raise the taxes on big casinos by 80 percent.

Now the resort association wants to make sure the ability of the Legislature to tax business is not restricted.

Bible said the state's surplus and the tax revenues are coming in higher than expected. "But there are a lot of needs in education and Medicaid. If additional revenues are needed, we argue they should not be increased on single source such as gaming or mining, but instead should be broad-based tax spread through business.

"A number of business activities do not contribute significant revenue," to the state's treasury, said Bible, a former state budget director. Asked to name them, he said the banking industry, department stores and fast-food restaurants are examples. He said a person pays the same for clothing or a hamburger in Nevada as they do in other states with a corporate income tax.

"Any tax should be spread out to other segments," he said.

Bible said the brief will be filed "soon," as the court hearing is expected to last at least through the end of this week.

Judge Griffin told opposing attorneys -- Mike Dyer for the teachers union and Thomas "Spike" Wilson for the chambers and business -- that he expected his ruling, whichever way it goes, to be appealed to the Nevada Supreme Court.

If the petition survives the challenge, it will be presented to the Legislature that has 40 days to act. If the lawmakers reject or change any portion, then the issue goes on the ballot in the 2002 election.

The proceeds from the proposed tax would all go into the public schools. And there is a provision the state cannot use the collections to replace present funding for the schools.