Nevada teachers lend support to business-tax initiative

By David McGrath Schwartz

Wednesday, Jan. 18, 2012 | 2 a.m.

Nevada teachers are prepping for a tax fight.

The state teachers union, with tens of thousands of members and the ability to spend big money, will join the state’s largest labor union in backing a tax initiative.

Frustrated by the inability and unwillingness of lawmakers to raise taxes, Nevada’s AFL-CIO, which includes state employees and construction trades, has been working since the fall to draft a tax initiative. Sources said the proposal, to be filed this month, will be a tax on business margins similar to a failed Democratic proposal in 2011.

“We’re part of the coalition,” Lynn Warne, president of the Nevada State Education Association, said Tuesday. “We support the effort.”

The wording of the initiative is being finalized, and the coalition backing it is so new it does not have a name, Warne said.

Sources said early versions would raise as much as $1 billion a year, a huge sum for a state that takes in less than $3 billion a year in taxes.

How broad that coalition will be is a crucial, unanswered question.

Gaming, mining and other companies have been talking with labor unions, but no deal has been struck. And none is expected before the petition is complete.

A tax that affects a large swath of businesses will draw big opposition and require an expensive campaign.

That would make support from the teachers union crucial. A child’s teacher remains among the most personable faces of tax dollars at work, political observers believe. Add to that cash for the fight: The NSEA has a tradition of being able, and willing to spend money. In 2008, the group spent nearly $800,000 advocating an increase in the room tax.

Political sources say that gaming companies, which have supported broad-based business taxes at the Legislature, are divided on whether to support the initiative.

Indeed, gaming and mining have every reason to be cautious, knowing that they have the biggest targets on their back for any industry-specific tax.

Conservative businessman Monte Miller last week floated the possibility of raising gaming and mining taxes through separate initiatives. He declined to comment further until they’re drafted.

But many political observers and industry representatives believed Miller’s plan is a “shot across the bow” to gaming and mining — a warning to those industries not to join the AFL-CIO’s coalition.

The Keystone Corporation, a conservative business advocacy group of which Miller is an active member, put out a statement Tuesday distancing itself from efforts to raise taxes. Keystone President John Gibson said: “I think it’s the consistent policy of Keystone that the problem in the state is spending. That has to be gotten under control.” He added that individual members of Keystone can support different proposals.

Warne said per-pupil funding in Nevada, even in the boom years, was too low. Specific taxes on gaming and mining “won’t do anything to broaden the tax base, which is so narrowly focused on a few revenue sources. Not everyone in the state pays their fair share,” she said.

Representatives of the Nevada Resort Association and Nevada Mining Association said they are not supporting the initiative and would oppose any industry-specific tax.

Add into the mix maverick attorney Kermitt Waters, who filed suit Tuesday to challenge the state’s single-subject restriction on initiatives and plans to introduce a wide-ranging constitutional amendment to raise mining taxes and abolish homeowners’ property taxes.

The various tax plans have the ingredients for a sequel to the historic tax fight of 2003, when industries and labor unions warred with each other over former Gov. Kenny Guinn’s proposed gross receipts tax. The divisions and resentments from that dust-up still linger.

The labor coalition would need to collect over 70,000 signatures by the end of the year. The proposal would then go to the 2013 Legislature. If the Legislature did not pass it with the required two-thirds majority, it would go to voters in 2014.