Legislature to seek more school funds

Wednesday, Feb. 28, 2001 | 11:31 a.m.

CARSON CITY -- Although the Nevada Supreme Court ruled that a teachers' initiative petition to impose a business-profits tax is unconstitutional, that won't stop legislative efforts to find more money for public schools.

Assemblyman David Goldwater, D-Las Vegas, chairman of the taxation committee, said the court's decision "does not solve the problem of education funding in the state." However the ruling "makes it more difficult to form a compromise" to help send money to the public schools, he said.

The court, in a 4-1 ruling Tuesday, found the petition was defective and said the Legislature was barred from taking further action on it.

"This is very good news," said Kami Dempsey, spokeswoman for a coalition of business and chambers of commerce, which filed the challenge to the petition. "It was blatantly unconstitutional."

Dempsey said she hoped the Legislature would concentrate on "true educational reform."

She said she doubted there would be any talk about drafting a compromise tax proposal until Gov. Kenny Guinn finishes his review of government.

The Nevada State Education Association, which gathered more than 63,000 signatures on the petition, said it has not seen the decision "but the bottom line is there's an education-funding crisis in Nevada, and we will fight day and night for Nevada kids."

Association Executive Director Ken Lange, said, "Nothing is going to stop us. We've been working on more than one level anyway, and we can look to the Legislature. If we have to, we'll go do it again."

Goldwater's Taxation Committee held two hearing on the tax petition and had a third scheduled for Saturday in Las Vegas. But support among committee members was lacking for the plan that would have imposed a 4 percent tax on business profits above $50,000.

Senate Majority Leader Bill Raggio, R-Reno, said earlier the initiative would never be approved in the Senate.

If the tax plan had been found constitutional and if it had been rejected by the Legislature, it would have gone on the 2002 ballot for voters to decide.

The petition's fatal flaw, the court said, was a section that required the Legislature to allocate 50 percent of the state's budget to the public schools. The court said the Constitution prohibits an initiative from requiring an appropriation without raising a sufficient tax o cover the cost.

About 37 percent of the state's budget goes to education. The court said the profits tax would have raised about $270 million, but that would not be enough for the desired 50 percent.

"...The proposed tax here is clearly insufficient to cover the initiative's required 50 percent of revenue of appropriation," the decision said.

It was signed by Justices Cliff Young, Miriam Shearing, Deborah Agosti and Myron Leavitt. It also rejected the teachers' argument that if one part of the petition was found unconstitutional, the rest could go forward.

The court said it did not want to strike a key part of the petition: "Initiative petitions must be kept substantively intact."

Justice Bob Rose wrote a dissenting opinion saying he felt the basic business-tax proposal "is severable from the provision that would require the Legislature to spend on education at least 50 percent of the state's revenue."

In a five-day trial before District Judge Mike Griffin of Carson City, the teachers union presented evidence that the tax would raise enough money to bring the funding to the 50 percent level, Rose said.

"Additionally, because the petition simply requires the Legislature to spend at least 50 percent of state revenues, funding is available; the revenues to comply with the mandatory minimum spending requirement are already on hand, and thus there is no need to identify a revenue source," he said.

Gov. Kenny Guinn included enough money in his budget for a 5 percent bonus for teachers next school year. But he gave state workers and university professors a 4 percent pay raise next year and a cost of living the year after. He said there wasn't enough money for a continuing pay raise for the teachers.

The union said the state ranks about 23rd in the nation in salaries. But Nevada can't attract new teachers to take care the big population influx, especially in Southern Nevada.

Where the Legislature goes from here is unknown. Some business lobbyists have said there have been discussions whether to try to come up with a compromise tax plan to help education. But with this threat of the initiative petition gone, there may not be an appetite to do anything this session.

Goldwater said he was going to "try to find some amount to fund education." He said the schools cannot wait another two years until the 2003 Legislature convenes. "They (the schools) are already doing without," he said.