Lawmakers join in fight against teachers’ tax plan

Brendan Riley

Saturday, Jan. 6, 2001 | 12:44 p.m.

CARSON CITY - The Nevada Legislature has joined in a fight against a teachers' proposal to get more money for the state's schools by imposing a business profits tax.

The lawmakers' Legislative Counsel Bureau filed a brief with the state Supreme Court supporting part of a business group's claim that the teachers' tax plan is unconstitutional.

Chief counsel Lorne Malkiewich said Friday that lawmakers worry the plan violates a constitutional ban on earmarking funds for a specific purpose without providing an adequate tax source.

Part of the teachers' proposal states that the total appropriation for education must equal half the state's budget total. The current total for public education is 37 percent.

"The Legislature's interest is that you could have initiatives from all sorts of groups that earmark funds without raising the necessary revenues," he said. "The Legislature would have no discretion on how the money is appropriated."

The proposal from the Nevada State Education Association was challenged by a coalition representing hundreds of businesses. The case went to the state Supreme Court after a lower court judge ruled in favor of the teachers.

Carson District Judge Mike Griffin said there were problems with the education association's tax proposal - but the plan "is not clearly unconstitutional." He added he based his decision, in part, on "strong presumptions in favor of the initiative process."

The education association, the main union for Nevada teachers, needed only 44,009 valid signatures on its initiative petition seeking the tax plan - and submitted far more than that. The secretary of state's office found that 63,795 signatures were valid.

Unless Griffin's ruling is overturned by the Supreme Court, the proposal will go to the 2001 Legislature. The high court has scheduled a Feb. 7 hearing on the dispute - two days after the 2001 session opens.

If state lawmakers refuse to enact the proposed legislation, voters would have to approve it in 2002 for it to become law.

The Nevada Pro-Education Alliance, leading the fight against the proposed 4 percent business net profits tax, has argued it's a thinly disguised personal income tax, which isn't allowed in Nevada.

Foes also claim the plan would let some corporations escape the tax while others would pay the full rate.

The proposed tax would raise about $250 million for public education. The plan also would prevent lawmakers from taking the tax revenue "out the back door" and using education dollars elsewhere in the state budget.

Ken Lange of the education association has said the petition was drafted by lawyers who carefully reviewed the Nevada Constitution. He agreed the constitution prohibits a personal income tax, but added that the teachers' plan doesn't fit that description.