Coalition discussing putting tax question to voters

By David McGrath Schwartz

Friday, June 3, 2011 | 1:55 a.m.

Lobbyists representing major Nevada industries are talking with labor and education leaders about putting taxes in front of voters in 2012.

The target right now is a question or questions that will revive some of the taxes Democrats unsuccessfully proposed this session, sources said.

The conversations are built on a consensus among business leaders and labor representatives that major tax reform will never come out of the Legislature.

“I’ve lost all faith in the ability of the Legislature to fund government,” said Danny Thompson, executive secretary/treasurer of the AFL-CIO, the state’s largest labor group. “The only solution is to go to the people.”

Thompson said the coalition would be broad and include business representatives.

Discussions are still preliminary, and it’s unclear what taxes would be included, sources said.

The state faced a severe budget deficit — by some measures the largest deficit in the country — heading into the 2011 session. Both the Assembly and Senate are controlled by Democrats. But the constitutional provision that two-thirds of lawmakers in each house pass taxes meant new proposals were dead almost as soon as they arrived.

The Legislature and Gov. Brian Sandoval reached an agreement Wednesday that extended some taxes and cut more from the state’s budget. About $650 million in taxes will expire in 2013 unless that Legislature acts.

Both Assembly Speaker John Oceguera, D-Las Vegas, and Senate Majority Leader Steven Horsford, D-North Las Vegas, said after Wednesday’s deal with the governor, that taxes they had proposed should be considered by voters.

Democratic leadership tried to negotiate a ballot measure as part of the “endgame” agreement on taxes, spending and reforms. But Sandoval wouldn’t agree to it. Oceguera indicated he might pass a ballot initiative anyway, and try to override the governor’s veto.

According to sources with knowledge of the discussions, the coalition could end up backing a number of separate questions, including on the “margin tax” and sales tax on services. If the teachers union is involved, as is likely, there would also be some sort of mechanism to ensure that a portion of funding goes to education, a lobbyist said.

Gaming and mining, the state’s two major industries, are the most obvious funders for a campaign. The thinking for them is this: If the public gets too upset at cuts and inadequate funding for education, they will target the state’s two prominent industries.

For years now, the state’s establishment has warned against going to the ballot to set tax policy.

But as the Nevada 2011 session comes to a close with another muddling solution of temporary taxes and spending cuts, the frustration is obvious.

“The environment is ripe for those conversations (with industry leaders) to happen after this session,” said one business lobbyist, speaking on the condition of anonymity.

Labor has, after past frustrating sessions, threatened to bring ballot measures.

“I know I’ve said that in the past, but I think everyone now agrees, with the two-thirds requirement (to raise taxes), the minority is controlling the desires of the majority,” Thompson said.