Judge asked to dismiss suit to block tax initiative

By Cy Ryan

Tuesday, July 17, 2012 | 4:29 p.m.

CARSON CITY — Attorneys for organized labor and school teachers say a proposed initiative petition to impose a 2 percent margin tax on businesses is not confusing and is a clear effort to direct more money to the schools.

They have asked District Judge James Russell Jr. to dismiss a lawsuit aimed at blocking supporters of the initiative from gathering signatures to present the plan to the Legislature.

Russell has set a July 31 hearing on the case.

Backers of the petition must gather 72,352 signatures of registered voters to present the plan to the 2013 Legislature. If lawmakers reject the proposal, it would be placed before the voters in 2014.

A group called the Committee to Protect Nevada Jobs filed suit in Carson City District Court, claiming the petition is misleading and fails to inform the voters of the effect and consequences of the measure.

The group, composed of banks, car dealers, farmers, truckers and the Las Vegas Sands Corp. says the petition mentions education once in its 26 pages and makes no provision for raising public school support.

Attorney James Penrose, representing the Nevada State Education Association and the Nevada State AFL-CIO, said in an answer filed Monday that the petition “is no more ambitious and no more complex” than imposing the margin tax to support the public schools.

The initiative, Penrose said, does not order school funding be increased or be maintained at a certain level. It also does not prohibit the Legislature from using the new tax revenue to replace money now going to the public schools.

“Do supporters of the initiative believe that the combination of this new source of revenue and public support for the schools would induce the governor and the Legislature to increase school funding?” Penrose asked.

“Of course, and supporters are hardly lying when they express that belief, but we all recognize — and the committee fully understands — that any such outcome is dependent upon political and economic factors that are not governed and cannot be governed by the initiative or any other statutory measure,” Penrose said.