The executive director of the Nevada State Education Association said Tuesday he is confident its plan to tax businesses will survive a constitutional challenge.
A coalition representing hundreds of Nevada businesses filed in Carson District Court Monday afternoon asking for an order that would decertify the initiative petition so the 2001 Nevada Legislature doesn't face the demand to approve a 4 percent business tax.
The court challenge by business groups, including the Carson City and other area chambers of commerce, Nevada Taxpayers Association and more than a dozen small businesses, says the teachers' union business tax is really a thinly disguised personal income tax. It also says that, as written, it would allow some corporations to completely escape the tax while others had to pay the full rate.
"We're confident that what the chambers presented here is a thinly veiled smokescreen for their failed attempt to stop us in the signature collection process," said NSEA Director Ken Lange. "They're making an attempt to prevent the Legislature and the citizens of Nevada from thoughtfully considering what we believe to be a well-constructed petition."
The proposed tax would raise about $250 million, which would be dedicated to public education. The plan would also require that each year at least half the total state general fund be dedicated to public education to prevent lawmakers from taking the tax "out the back door" and using existing education dollars elsewhere in the budget.
Lange said the petition was drafted by lawyers who carefully reviewed the Nevada constitution. He agreed the constitution prohibits a personal income tax but the teachers' plan doesn't fit that description.
"Notwithstanding that, it says the state can levy a tax on the cost of doing business," he said.
As for the charges in the lawsuit that the petition drive had serious procedural flaws, Lange said NSEA consulted with the secretary of state's office several times to make sure it met the legal requirements.
And even if one part of the plan was later ruled unconstitutional, he pointed out the proposed legislation has a clause in it that allows just the unconstitutional part to be removed without canceling the entire plan.
"The tax is one part of this, but we also articulated an entire plan for improving education in the state of Nevada," said Lange. "The tax itself is a way to empower making positive changes in our schools for kids."
Lange said NSEA lawyers are going over the complaint filed Monday and are confident they will be able to respond to every point in it.
The petitions were certified by the secretary of state last week and, unless blocked by the court they will be presented to the 2001 Legislature.
If lawmakers refuse to enact the proposed legislation, the issue goes on the 2002 ballot and voters will be asked to make it law. Lange pointed out the plan had more than 63,000 valid signatures statewide and that polls indicate it would get strong voter support.
He said he doubts the court will order the measure decertified.
"In the past, courts have generally deferred the process," he said. "I don't think they're going to cross that threshold."
