Tax hike foes see victory at polls

Tuesday, Dec. 23, 2003 | 10:53 a.m.

CARSON CITY -- If opponents of the state's $831 million tax package get a referendum to repeal it on next year's election ballot, they say they will have accomplished their goal -- even if the repeal effort fails.

"It's a win-win situation," said George Harris, the Las Vegas-based leader of a group circulating a referendum petition to repeal the taxes imposed by the Legislature this year.

Harris said he would consider it a victory if the referendum reaches the ballot because, according to a legal opinion issued last month, those taxes would be capped pending another vote of the people.

The Harris Group, nicknamed "Axe The Tax," must collect 51,243 signatures of registered voters before May 18 to get the issue on the ballot.

Dan Burdish, also of Las Vegas, plans to circulate a referendum starting next month to repeal just the business taxes. His group is called "Nevadans for Tax Restraint."

According to the legal opinion issued last month by Legislative Counsel Brenda Erdoes:

A vote to approve the new taxes "means that the Legislature could not directly amend or repeal the statute, but the Legislature could suggest to the people changes which the people could vote to approve. Any such changes would be effective only if approved by the people," according to the legal opinion.

Senate Minority Leader Dina Titus, D-Las Vegas, called the tax referendums "potentially dangerous." She said they would tie the hands of the Legislature, which wouldn't be able to fix problems, lower taxes or get rid of the payroll tax.

Titus said she doesn't like the payroll tax but it would take a vote of the public to eliminate it if a vote on the referendums reaffirmed them. She said she did not realize that the taxes would be "locked down" if voters support the tax package.

She also said the question on the ballot may be confusing for the voters. They would be asked whether they support or oppose the tax increase. She said she did not think the opponents who are gathering signatures to repeal the tax are telling the voters that the taxes will be frozen if the repeal fails.

"I don't think they (the signers) are getting the whole story," she said.

Senate Majority Leader Bill Raggio, R-Reno, said he has not seen the legal opinion and would need time to study it. But he said it "doesn't seem logical" that the taxes, if approved, would be cemented in.

Assemblyman David Parks, D-Las Vegas, chairman of the Assembly Taxation Committee, said he had not seen the legal opinion and would have no comment.

Burdish said he knew the new taxes could not be changed if the voters endorsed it. "It's right in the Constitution," he said.

Similar situations arose in previous cases involving sales tax, abortion and the right to work, Erdoes said.

In 1956 voters approved a law passed by the Legislature to enact a 2 percent sales tax with the money going to the state. To change the 2 percent, the Legislature would have had to get voter approval, technically.

But lawmakers have gotten around that law. They enacted a sales tax called the local school support tax with the proceeds going to public education. There have also been sales tax increases that go to local governments. So the total sales tax that is imposed is in the 7 percent range, depending on the county -- but only 2 percent goes into the state treasury.

If the voters cast their ballots to repeal the taxes, the law would become effective Nov. 23, 2004, when the Nevada Supreme Court canvasses the vote. The 2005 Legislature would be free to enact the same or similar taxes without any restrictions.

The legal opinion signed by Chief Deputy Legislative Counsel Scott Wasserman and Principal Deputy Legislative Counsel William Keane suggests there could be further complications as well.

They said if both the Harris and the Burdish referendums end up on the ballot, it is possible that the vote on one could counteract the other.

"For example, if the majority vote no on the Harris referendum and the majority vote yes on the Burdish referendum, then a conflict will occur because the law cannot be approved and disapproved at the same time," the opinion stated.

In cases of conflicting initiative petitions, the one with the majority vote prevails. The state constitution does not specify what happens in conflicting referendum petitions, the opinion stated.

"We simply do not have an adequate basis to predict with any certainty how the Nevada Supreme Court would address such a conflict," Wasserman and Keane said.

Harris said he believes the referendum with the most votes should prevail. Burdish could not be reached for comment on the matter.

Harris said he could not provide the number of signatures his group has already. He said his group is ahead of pace, averaging 600 to 650 signatures a day.

Harris said he plans to spend $1.5 million to $1.8 million on gathering the signatures and on a media campaign to try to persuade voters to repeal the taxes.