The legal battle over whether a business tax proposed by the teachers' union is constitutional will wrap up Tuesday in Carson District Court.
Judge Mike Griffin recessed the trial Wednesday before noon after the Nevada State Education Association finished presenting witnesses supporting the initiative petition.
The Nevada Taxpayers Association, businesses and several chambers of commerce from around the state challenged the constitutionality of the initiative in early October.
Association financial expert Al Bellister, who designed much of the proposed tax plan, explained how the 4 percent tax on net business profits was supposed to work, including the controversial 50 percent provision that would require half the state's general fund each year go to public education.
He has said on numerous occasions the provision is intended to prevent the state from taking the $250 million the business tax would raise for other purposes by "backing it out" of existing education funding.
State Director of Administration and Budget Director Perry Comeaux will be the main witness Tuesday, called as an expert to counter Bellister.
The plan would impose a 4 percent tax on all Nevada businesses making more than $50,000 a year and dedicating the revenue to Nevada's public schools. The association makes no secret that a large share of the money would go to increase teacher salaries.
The core issue before the court is whether the proposed tax is unconstitutional. Challengers say the tax is a personal income tax - especially on many small businesses. Personal income tax is unconstitutional in Nevada.
Challengers say the proposed business tax doesn't include the money necessary to administer it.
Some state officials say it will take dozens of new employees and auditors to make sure businesses were paying the tax. That would violate the constitutional requirement that any tax provide for the cost of implementing and managing it.
The initiative, which attracted 63,000 signatures, will be presented to the 2001 Legislature if it survives the court challenge. If lawmakers don't approve the proposed tax, then it will go to voters in 2002.
The business group wants Griffin to throw it out as unconstitutional so lawmakers don't have to make that decision. Griffin has said from the bench that, no matter which way he rules, the issue will go to the Nevada Supreme Court.
