Monday, Oct. 25, 2004 | 11:08 a.m.
CARSON CITY -- The deadlock over raising taxes in the 2003 Legislature has spawned two ballot questions that could change the way the state funds its schools.
Proponents say both are designed to ensure schools get the money they need, but they come from opposite ends of the political spectrum.
Question 1 would require the Legislature to pass a school funding bill before it approves any other appropriations for the coming two years. It comes from the fiscally conservative politician who 10 years ago pushed for a constitutional amendment to require a two-thirds vote of the Legislature to pass a tax increase.
Question 2 would require the Legislature, beginning in 2012, to fund schools at the national per-student average. It comes from the teachers union, which has been pushing the past decade to raise taxes to better fund education.
The questions, if passed by the voters this election, would appear on the 2006 general election ballot for approval before becoming part of the Nevada Constitution.
Both arose out of frustration with the way the 2003 Legislature dealt with funding for public schools, which was imperiled during the fight over raising taxes.
Gov. Kenny Guinn had proposed a plan to create broad-based taxes to provide more stable funding for state services, including public schools, which took 34.7 percent of the budget in the current biennium.
The governor's plan created rancor among legislators, who needed two special sessions to come up with an alternative plan to raise $833.5 million in taxes during two years and balance the biennial budget. Several times legislators came one vote short of the two-thirds majority required to raise taxes.
All of the state's budget except school funding had been passed before the special sessions. Because of a constitutional requirement that the state keep a balanced budget, the schools could not receive funding until the tax package was passed.
The delay until August in passing the tax package, and the school budget with it, created havoc in the state's public school systems, which were delayed in hiring their staffs for the fall semester.
The idea for Question 1 came from U.S. Rep. Jim Gibbons, a Reno Republican and a former member of the Assembly, who in 1994 and 1996 pushed for the constitutional amendment that required the two-thirds vote to raise taxes.
Gibbons and his wife, Assemblywoman Dawn Gibbons, R-Reno, led a drive to gather signatures on the initiative to qualify it for the ballot.
Responding to the same school-funding crisis, the Nevada State Education Association is trying a different tactic with Question 2.
The ballot question says, "Shall the Nevada Constitution be amended to require that the annual per-pupil expenditure for Nevada's public elementary and secondary schools equals or exceeds the national average?"
The state is now 45th in the nation in funding the public schools, at $4,424, or $1,655 per pupil below the national average, Cahill said. The average per-pupil expenditure is $6,079, according to the National Center for Education Statistics.
Sen. Mike Schneider, D-Las Vegas, introduced a bill in 2003 to raise the state's spending to the national average. That was estimated to cost $1.1 billion over the biennium. The bill never made it out of committee.
In 1990 the teachers circulated a petition to enact a corporate net profit tax. It qualified for the ballot, but the teachers backed off the proposal when state leaders agreed to enact a business tax. The 1991 Legislature approved the per-employee tax of $100 per year.
The union then sought to enact a 4 percent business income tax for the support of education. But the Nevada Supreme Court last year ruled the proposed law was unconstitutional.
Question 2 takes a different approach. Crafted by the teachers' union, it doesn't bother with trying to propose the appropriate tax to fund schools. It simply sets the funding level, and leaves it up to lawmakers to find the money.
The fact that the funding requirement wouldn't take effect until 2012 gives the state enough time to do that, Cahill said. In a year with a surplus, for example, part of that money could be allocated to education to avoid a future tax increase.
In addition, she said, the public schools should be able to keep all of the money earmarked for them from the state sales tax. The school districts, however, do not see a windfall if the tax collections are higher than expected. That extra money is kept by the state.
In the current biennium, Cahill said, the group estimates the state will get $50 million in sales tax money that should have gone to schools. In the past 10 years $131 million has gone back to the schools, she said.
Carole Vilardo, executive director of the Nevada Taxpayer Association, which opposes Question 2, said it was "totally impractical to shift money" the way Cahill described. Ninety-two percent of the state's budget goes to the public schools, the university, human resources and prisons, she said.
That leaves only 8 percent, meaning the teachers' plan would require a tax increase, Vilardo said.
Jim Gibbons said he does not support Question 2 because it does not identify a way to pay for the increased funding that it would require.
"I think that while teachers deserve more, there are alternatives to providing that money," Gibbons said.
The congressman has proposed a plan that would change the distribution of money from Bureau of Land Management land auctions to provide more money to public schools. The Southern Nevada Public Lands Act currently earmarks 5 percent of the proceeds for schools; Gibbons wants it to be 35 percent.
But requiring schools to be funded at the national average without setting up a system to pay for it in advance is a bad idea, he said.
The education association has not taken a stand on Question 1, Debbie Cahill, its deputy executive director, said.
"It doesn't do anything to address the level of spending," Cahill said. "We've been fighting a nonstop battle with the Legislature about the levels of funding.
"It was more about the two-thirds vote than about funding education."
Sun reporter Jean Reid Norman contributed to this story.
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