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April 18, 2014

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In high-stakes business-tax fight, teachers union gets early, bold start

Updated Wednesday, June 19, 2013 | 2:29 p.m.

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Dan Hart, managing partner of Dan Hart & Associates, listens to keynote speaker Roberto Suro, director of the Tomas Rivera Policy Institute at USC, during the English Mastery for Nevada's Prosperity education forum at the Stan Fulton Building on UNLV campus Thursday, June 21, 2012.

The state teachers union plans to make a $1 million campaign contribution Wednesday to jumpstart a political campaign to pass a 2 percent business tax on the 2014 ballot.

Although the election is more than 16 months away, the Nevada State Education Association is launching the Education Initiative campaign with the money and a new website called TheEducationInitiative.com.

The announcement marks an unusually early start to the campaign for the Nov. 4, 2014, election.

“It’ll be a long, expensive campaign,” said political strategist Dan Hart, who is leading the Education Initiative campaign to pass the tax.

Hart says that opponents are also ready to spend millions of dollars to persuade voters to say "no" to the ballot question.

Supporters of the 2 percent tax on business revenues say it will inject about $800 million into the state’s coffers to help improve Nevada’s education system and better serve Nevada’s children.

Acknowledging that business groups and monied interests intend to fervently oppose the tax, Hart said he and supporters in teachers and labor unions are launching their campaign untraditionally early in an attempt to reach as many voters as possible.

“Our task is to identify voters and potential voters and create a running dialog with them, to make it into a cause and get them to the polls,” Hart said. “Ours is going to be a methodical communication campaign.”

The new website will have ways for Nevadans to connect to the campaign, volunteer and receive news updates. Hart said he envisions the site as a hub for community organizing and grassroots efforts to pass the ballot measure. The website itself is based off nationbuilder.com, a service that facilitates such political campaign organizing.

A description of that website tells potential customers that “you don’t need a huge budget or institutional support to run — and win — your campaign. You just need to talk and listen to your community. You need to build relationships and get people to pay attention to you. You need to organize the field.”

Hart said the Education Initiative political action committee, the fundraising arm of the campaign, will also begin working in earnest to more actively solicit contributions as part of the campaign launch.

The $1 million kicks off the campaign and includes money from state teachers union members who set aside money in an “advocacy” account, said Lynn Warne, president of the Nevada State Education Association.

“That’s not all the money that’s set aside through this assessment for advocacy,” she said. “That’s just how much money has been allocated.”

In addition to the major donation from the teachers union, the PAC reported about $670,000 in contributions as of Jan. 15 of this year.

The teachers union also paid for a big campaign last year to gather enough signatures to qualify the initiative for the ballot.

Now the union is hoping the extra $1 million and will attract more supporters. The campaign will also try to recruit allies, including progressive and community groups, who can help promote, organize and drive voters to the polls next November.

The goal of the whole effort is to reach at least 100,000 voters, Hart said.

Meanwhile, the ballot measure has already faced criticism, especially from business groups and Republican lawmakers who have called it a job-killing tax that will harm an economy that’s still recovering from the recession.

The counterpoint to the Education Initiative PAC is the Committee to Protect Nevada Jobs, an organization that reports raising $126,300 through Jan. 15 of this year.

“Our coalition is built, from our standpoint, on the small businesses that are going to be incredibly impacted by a tax that they’ll have to pay whether they’re profitable or not,” said Bryan Wachter, spokesman for the committee.

Wachter also noted that the opponents are actually being outspent by supporters of the ballot question, which is contrary to what Hart has said.

But that’s the situation right now. Both sides have lots of money they could throw around in an election year.

Even if they haven’t revved up fundraising machines yet, individuals and groups with lots of money and political clout have been lining up to oppose the tax.

Opponents include Gov. Brian Sandoval, who is also on the ballot in 2014, the Las Vegas Metro Chamber of Commerce, Wynn Resorts, Las Vegas Sands Corp., and various trade groups representing retailers, bankers, manufacturers, auto dealers, truckers, builders and contractors. Most of these groups are represented under a political group called the Committee to Protect Nevada Jobs.

Calling the ballot question complex and burdensome for small businesses, Wachter said Hart and the teachers union have a lot of explaining to do to the community.

“They have an uphill climb, and I kind of see that as the reason why they’d want to start 17 months before an election,” Wachter said. “That’s going to be a large part of their battle, explaining what the tax is and why it’s valid.”

Hart said groups like the Committee to Protect Nevada Jobs will likely outspend supporters of the ballot measure as the campaign season heats up.

“We are underdogs here, absolutely, in this race because of how well funded our opposition will be,” he said.

But for now, the supporters of the tax are far outspending the opposition. Representatives from the business community say they aren’t ready yet to launch their own campaign, so they’re holding back money they plan to spend to defeat the ballot measure.

Brian McAnallen of the Las Vegas Metropolitan Chamber of Commerce brushed off the $1 million donation, saying voters aren’t paying attention to the Nov. 4, 2014, election yet.

“This is their attempt to flex their union muscle,” he said. “A year and a half out is way too early.”

The tax has been looming for longer than that. In some ways, it was unlikely that Nevadans would ever have this proposition on their ballots.

The campaign began with frustrated teachers union leaders essentially saying that the two-thirds supermajority requirement to pass a tax increase at the Legislature would always prevent the state from paying for what they view as an inadequately funded public education system.

So they gathered tens of thousands of signatures during 2012 and overcame a lawsuit to put the initiatve before the Legislature.

But Legislators of both parties never warmed to the 2 percent tax on businesses that make $1 million or more per year in revenue.

They declined to pass or reject the measure. Instead, they just punted to voters, who now have the decision to vote "yes" or "no" on the tax.

Legislators also ignored a proposal from several Senate Republicans to put an alternative to the margins tax on the ballot. That would have allowed voters a choice between the 2 percent tax on gross business revenue and a tax on the state’s mining industry.

Now it’s just the business tax on the ballot and the uncertainties of a long, expensive campaign ahead.

The first step? Shhh, don’t call it a tax.

“That’s our first struggle, to get people to call it the Education Initiative,” Hart said.

For opponents, it’s a tax that’s complicated for businesses to calculate and hits businesses no matter whether they are profitable or not.

Opponents also note that the money the tax could raise might not go to education at all.

Wachter drew connections between the 2014 proposal and another union-backed initiative for a room tax increase that was supposed to send more money to the education system.

This year, the local teachers union lamented the fact that the Legislature and governor never directed that money to education.

“In 2009, and again in 2011, the Legislature used that money to cover a shortfall in the State’s general fund — never for education,” the Clark County Education Association wrote on its website earlier this year.

In the budget the Legislature just passed, legislators again shifted that room tax money out of the education budget.

The 2 percent business tax on the ballot in 2014 might go the way of the room tax, Wachter said.

“We’re not talking about something unprecedented here,” he said. “We’re talking about something that we did three weeks ago (at the Legislature).”

Still, Hart dismissed such fears as “what if stuff” in the realm of the hypothetical.

With the election still 17 months ahead, a lot of hypotheticals, unknowns, and unanswered questions surround both sides of the business tax campaign.

It remains to be seen how avidly Sandoval’s reelection campaign will try to defeat the ballot measure and to what extent Democratic candidates will embrace it.

Although the state teachers union started the campaign with a major donation, nobody knows if the campaign will cost millions or tens of millions of dollars, as some political observers suggest it might.

But in a year without the president or a U.S. senator on the ballot, the margins tax has the potential to become the defining issue of the election.

“This is going to be the big race,” Hart said.

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