Lawsuit again filed to stop business tax petition

CARSON CITY – Once again, a lawyer for Nevada business organizations has filed a lawsuit to block unions from circulating a petition to levy a 2 percent business margins tax.

Reno lawyer Josh Hicks filed a lawsuit Wednesday that argues the Education Initiative petition violates a single-subject law and, as written, would not guarantee that more money would be spent on public education.

“Key impacts of the petition were not disclosed to voters, and worse, many key impacts are patently misstated,” said Hicks, who represents the Committee to Protect Nevada Jobs.

The lawsuit was filed 16 days after Carson City District Judge James Wilson threw out another version of the business margins tax petition on the grounds it violated the single-subject rule. After that decision, the Nevada State Education Association and the state AFL-CIO made minor changes and resubmitted a modified petition a day later to the secretary of state’s office.

Nevada State Education Association President Lynn Warne has said the petition will raise $800 million a year for public education. But she has added that there is nothing to force legislators, other than the motivation to do the right thing, to guarantee funds will go to public education, or that legislators will not use existing education funds for other purposes.

The unions must collect 72,234 valid signatures by Nov. 13 to force the Legislature to consider the tax during the session in 2013. A similar tax plan advanced by some Democrats died without serious consideration in the Legislature last year.

If Hicks prevails in court, then any signatures already collected by the unions would be declared invalid and a new petition must be filed before signatures could be gathered.

Even the teachers’ association has conceded the Legislature won’t approve the tax. If legislators don’t, then the matter would go before voters in 2014.

Under the tax proposal, the first
$1 million in business revenue would be exempt from taxes. Some, but not all, expenses of companies then would be deducted before the 2 percent tax is calculated.

A national Kids Count study in July ranked Nevada 50th in public education and among the worst states for children’s well-being.

The Committee to Protect Nevada Jobs consists of the Las Vegas Chamber of Commerce, the Retail Association of Nevada and other business groups.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3900.