Teachers union chief says tax targets large business

Friday, Feb. 16, 2001 | 9:44 a.m.

CARSON CITY -- The leader of Nevada's schoolteachers union told an Assembly Taxation Committee Thursday that many business people don't understand the initiative petition to raise taxes by $250 million a year to support the public schools.

Ken Lange, executive director of the Nevada State Education Association, said the petition protects the smaller businesses. He said 90 percent of the tax will be paid by the top 10 percent of the companies in Nevada.

Lange said many business people believe this is a tax on their gross, rather than their profits.

The teachers union and their supporters got their chance Thursday to push for the plan, which calls for a 4 percent business tax on profits above $50,000. The opposition will be heard by the committee next Tuesday.

Committee Chairman David Goldwater, D-Las Vegas, declined to say when and if he would bring the issue to a vote. He said he was only one of the 11 members of the committee. And if the other committee members want to vote, he will call for a ballot.

Other committee members peppered the proponents with technical questions, such as if the tax would be assessed against trusts, limited partnerships and Internet businesses.

Union officials told the committee salaries of Nevada teachers were 22nd in the nation. Al Bellister, the budget expert for the association, said pay of Nevada teachers was $2,600 below the national average.

Assemblywoman Sandra Tif-fany, R-Henderson, said the teachers feel the estimated $26,000 starting pay is too low. She wondered what would be an adequate salary. Lange said there is "no magic number." He said it would be up to the local school boards to negotiate the pay.

Tiffany said if $3,000 to $4,000 raises were given, that would not leave much money for educational improvement programs. She suggested that those types of increases would eat up the $250 million a year in new revenues.

Bellister said, however, the school districts still get revenue from other sources that could be used for salary increases.

Several committee members expressed concerns about the proposed tax.

Assemblyman Greg Brower, R-Reno, said he was worried that this was a "backdoor personal income tax" and that it would create a "mini IRS in Nevada." He said supporters will have a tough time persuading him to vote for the petition.

Assemblyman David Brown, R-Henderson, said he shares Brower's concerns.

The Legislature must pass or reject the petition by March 16. If it is defeated or changed, the petition goes on the election ballot in 2002.

And the issue is before the Nevada Supreme Court on a challenge by a coalition of business interests, which claim the plan is constitutionally flawed. There is no indication when the court will rule.

The teachers union got support from Barbara Clark of the Nevada PTA, Lonnie Shields of the Washoe County Education Association, Allin Chandler, executive director of the Clark County Association of School Administrators, and Danny Thompson of the Nevada State AFL-CIO.

Clark said the "current tax structure is inadequate to meet the current (public school) needs."

Thirty-eight states, she said, have higher funding than Nevada in education. While the public schools get the biggest share of the state budget, it is not enough, she told the committee.

Chandler said the money will be used to "support quality schools." Thompson said there was a "crisis in budgeting in the state" and he urged the committee to consider the plan.

Gov. Kenny Guinn, in his budget, gave pay raises to state workers and university faculty. But he said he had enough money to only give a 5 percent bonus to schoolteachers.

The teachers union said $84 million would be needed over a two-year period to give 2 percent raises in each of the years.