A group calling itself Nevadans for Sound Government on Thursday filed a referendum to repeal most of the $836 million tax package passed by the Nevada Legislature in July and an initiative that would kick all public employees out of legislative office.
The group headed by George Harris of Nevada Liberty Caucus is composed of conservative Republicans and members of the Independent American Party.
He said people were outraged by the size of the tax package. He couldn't specifically say which taxes would be deleted and which would stay, but a review of the specific sections of Senate Bill 8 on the repeal list showed the referendum would repeal every tax increase imposed by the law. That includes cigarette and liquor tax hikes, the real estate transfer tax, entertainment tax and new business payroll tax as well as the gaming tax and slot route tax.
That doesn't mean the repeal would cut taxes by $836 million.
The referendum doesn't affect Senate Bill 2 and Assembly Bill 4, which raised the secretary of state's fees and reduced a variety of allowances retailers now receive for collecting taxes for the state. The higher fees charged by the secretary of state will generate an estimated $41.4 million and the reduced allowances $33.6 million - a total of $75 million over the next two years.
Those are counted as part of the $836 million.
In addition, repealing SB8 would, in fact, reinstate the old business license tax - generating an estimated $165 million over the next two years.
Together, those taxes generate $240 million which means the net effect of the referendum would be to reduce state revenues by $596 million.
But that would be enough to seriously unbalance the state budget since the referendum leaves about $2 billion in funding for public schools in place.
"This package doesn't repeal anything to do with education," said Harris.
Asked about the budget shortfall, he said the governor and Legislature would have to cut other parts of the budget to make it balance.
"Government should fund education first, not last," he said.
He said while most states tightened their belts this past year and cut budgets, "this state went into a feeding frenzy." He said too many state agencies got double-digit increases at the expense of the average citizen and businessman and that those must be rolled back.
The vast majority of the increases went to cover the growth in public schools - primarily in Clark County - and for entitlement programs such as Medicaid which are mandated by the federal government and outside state control. Schools budgets increased nearly $400 million because of growth and Medicaid more than $200 million for the coming two years.
Harris blamed the increases on the number of public employees who are members of the Legislature. That, said Harris, is the reason for the initiative to ban all public sector employees from serving in the legislature, including state and local government workers, university employees and even teachers.
"Government employees are inherently conflicted," said Harris. "You won't see them vote to cut government."
There are currently 16 public employees who are members of the Legislature and several others with spouses and other immediate family members in education or government jobs.
According to the Secretary of State's Office, the group has until May 18 to raise more than 51,000 signatures from registered Nevada voters to put the tax repeal referendum on the ballot and until June 15 to raise that many valid signatures to put the public employee ban on the ballot.
"We're pretty confident," said Harris, predicting at least 600 people would help circulate the petitions.
He dismissed questions about whether the one-paragraph explanation of the tax repeal meets constitutional and statutory requirements for explaining to voters what the referendum would do. Legislative Counsel Brenda Erdoes said she believes they should attach the entire 40 page text of SB8 to the petitions. Harris said their lawyer said that wasn't necessary.
Secretary of State Dean Heller's chief deputy, Renee Parker, said after the petitions were filed, Heller will ask the Attorney General's Office for an opinion clarifying the issue.
She said Heller believes they should have the text of what they are repealing attached.
"Their petition has the sections but that doesn't tell you what's in those sections," she said.
Since there is disagreement, she said they will ask Attorney General Brian Sandoval to give both sides some guidance.
Harris said they don't intend to bog down a simple petition with 40 pages of law because they believe it will just complicate the process and isn't legally required.
He predicted the group would easily raise the necessary signatures for both petition drives.
