Suit challenges teacher’s tax petition as unconstitutional

Tuesday, Oct. 3, 2000 | 9:48 a.m.

The suit filed late Monday in Carson District Court seeks to block a vote on the measure slated to appear on the Nov. 7 general election ballot.

In the filing, the Nevada Pro-Education Alliance charges that the proposed 4 percent tax on business income is flawed, unfair, and a thinly disguised personal income tax, which is barred by the Nevada Constitution.

"The provisions of the legislation proposed by the instant initiative are unconstitutional to the extent that they set forth a de facto personal income tax or a direct personal income tax or an indirect personal income tax in Nevada," the complaint said.

The suit also challenges the collection and verification of signatures and the secretary of state's handling of the petitions.

It further argues that enacting the plan would violate another constitutional requirement that any mandated appropriation provide the cash to do the job.

That argument refers to a provision in the plan that requires the state to spend at least half its general fund on education each year. The requirement is separate from the business tax and would require public education's share of the general fund increase by 12-14 percent.

Without a specific source for that money, it would have to come out of other state agency budgets.

The coalition includes a long list of individual business owners as well as the Carson City, Douglas, Las Vegas, Greater Reno and other chambers of commerce, the Nevada Taxpayers Association, Associated General Contractors and Nevada Association of Employers.

The initiative proposed by the teachers union would impose a 4 percent tax on all businesses in Nevada reporting more than $50,000 income on their federal tax returns. The plan would mandate the estimated $250 million a year from that tax go to public education.

Organizers of the proposal gathered more than 63,000 signatures to qualify the measure for the November ballot.

If the petition remains on the ballot and is approved by voters, it would be presented to the 2001 Legislature. If the Legislature refused to enact the plan as approved by voters, it would go to the 2002 general election for voters to make it part of the constitution.

Leaders of the teachers' group have said they are willing to work with lawmakers on a compromise.