By Selwyn Harris
An education initiative calling for a 2 percent margin tax hike on some Silver State businesses could generate more than $800 million for Nevada schools if passed by state lawmakers during the 2013 legislative session that began Monday.
The tax applies only to businesses who earn at least $1 million annually.
The state teachers’ union drew up the so-called “teacher tax” initiative and then gathered more than enough petition signatures needed to compel the legislature to consider it.
Last week the Nevada Supreme Court voted 7-0 to uphold the petition after critics questioned its constitutional merits and what they claim was misleading and deceptive information contained therein.
The court’s decision means lawmakers in Carson City have roughly 40 days to either approve the plan or summarily reject it.
If rejected, the initiative would automatically be put on the 2014 ballot to let voters decide.
In a press release, Nevada State Education Association NSEA President Lynn Warne gave high praise for the court’s decision.
“The unanimous decision by the justices makes clear the Supreme Court of Nevada has agreed with the will of the people. The message Nevadans are sending to legislators is that it is time to provide dependable, predictable, K-12 revenue for education and that it’s time corporations pay their fair share,” she said.
Warne went on to address critics of the initiative who clung to the notion that the wording within was less than honest.
“The opinion of the court clearly found the initiative’s description of effect, the 200-word summary of the petition was adequate, straightforward, succinct, and nonargumentative. The initiative’s primary purpose is to clearly fund education,” she said.
NSEA Executive Director Gary Peck was equally ebullient this week as he described what’s ahead for the initiative.
“The next step is with legislators, as they will have the first 40 days of the session to consider and enact the education initiative,” he said.
Not everyone associated with education in Nevada is thrilled with the initiative.
Nye County School District Board of Trustees President Traci Ward suggested that the teacher tax proposal was specious on its face.
“It doesn’t necessarily go to education. All of the taxes that are collected are put into a great big pot and it is divvied up to everybody. The only way I would think it’s a good idea is if they put a sunset clause on it. If it is used for anything other than education, that it would go away. I think any money that is specifically for something should have a sunset clause on it and if it is ever used for another purpose it should go away. I think raising taxes and saying it is for education is not a good idea because I think people look at it and say, ‘wow, I pay a lot of money for education but it doesn’t necessarily go for education,’” she cautioned.
Ward has an ally in her opposition to the tax proposal.
Nevada Superintendent of Public Schools James Guthrie was also critical of the plan.
“It will be devastating on Nevada’s small businesses. It would be so harmful to the recovery of the Nevada economy. I hope desperately that the voters will defeat it. There is nothing in this provision that says it has to go to education. It can go to general government. It can go to anything that state government does but all of that is irrelevant because it puts the brakes on economic recovery to such an extreme degree that revenues will ultimately sink further and further because there just won’t be any small businesses. It is one of the worst ideas that I can imagine at this time,” he said.
According to the Supreme Court’s decision, if enacted, the initiative would require, among other things, that the margin tax revenues raised under the new law be deposited into the state Distributive School Account, DSA , which, in essence, is a subaccount of the State General Fund, NRS 387.030 1 , and then be apportioned among the several school districts at the times and in the manner provided by existing laws for the money in the state DSA.
NCSD Superintendent Dale Norton also weighed in on the initiative.
His thoughts appeared to be in contrast to those of Guthrie and Ward on at least one level.
“I am optimistic about it flying, but I’m also a little bit concerned if it will fly. Of course, anything that we can get into education is beneficial. The key is if it gets in it needs to be sustained,” he said.
Norton also shared the concerns of his colleagues about keeping an eye on the money.
“In California a few years back they did something similar but they started robbing from it. They took it and used it for other things. They didn’t keep it there,” he said.
If the initiative were to pass, Norton said he had a few ideas on where the funds should initially go.
“I’d like to see us have the ability as a district to take a look at what the needs are to spread it across not just for teachers but for all education purposes and as close to the classroom as we can keep it,” he said.
Early last year the Nye County School District Board of Trustees voted unanimously to ratify the 2011-2013 negotiated agreement between the Nye County Support Staff Organization, NCSSO, and the Nye County School District.
All three school district unions agreed to concessions by accepting a 1.75 percent wage reduction.
Roughly two years ago the district was forced to lay off 57 staff members.
In 2010, the district cut more than 70 positions to help balance its budget.