JOE HARDY: Tax lawsuit needed to defend the constitution
Earlier this month, several employers and eight Republican state senators, including me, sued over two unconstitutional votes on the floor of the Nevada Senate. These bills raised taxes and fees without the two-thirds majority required by the Nevada Constitution.
In the mid-1990s, Nevadans voted to place a tax restraint initiative into the state constitution. It requires a supermajority vote in both houses of the Legislature to increase a fee or revenue generated by a tax.
During the course of the 80th legislative session, the governor’s proposed budget plus his State of the State recommendations were used to build a spending blueprint in harmony with the revenue projections from the Economic Forum. Including a scheduled decrease in the Modified Business Tax, the nonpartisan fiscal staff of the Senate — jointly with that of the Assembly — did the math for budget projections.
There would be a surplus of $240 million even after filling of the “rainy day” fund with about $45 million a year.
As a state senator, I was personally approached multiple times to consider voting for extending the MBT beyond its promised lower level. I had made a contract with the people of Nevada in 2015 that as the “commerce tax” grew organically, it would draw down the MBT percentage assessment on the employers of people with jobs. With each approach, I inquired what it was that the MBT extension was needed to fund. I never received an answer.
On the last day of the session, the public found out how much was needed for real funding priorities over and above the governor’s budget and commitments. It came to about $60 million. Thus, when the proverbial “smoke-filled room” cleared at the end of the session, there was approximately $175 million that had not been allocated.
The state had plenty of money without changing the promised tax-saving MBT reduction.
Let me say it again. We have plenty of money.
Despite that, Democrats insisted on passing two revenue-increasing bills, Senate Bill 542 and Senate Bill 551.
The first extended a fee imposed by the DMV. The second extended the MBT rate, which would generate $98 million. Democrats didn’t have a two-thirds majority in the Senate, and these bills passed along party lines.
With our lawsuit, state Senate Republicans are seeking to require adherence to the constitution of the state of Nevada. A two-thirds vote of both houses of the Legislature is required to pass any bill that generates a revenue increase for the state.
It is chilling to ponder how the constitution can be ignored by elected officials. Who next will be affected by such wanton disregard to our constitution?
I am confident that, aside from other well-meaning legal opinions, the Nevada Supreme Court will agree with the overarching rule of law, the constitution of Nevada.
We have plenty of money. This lawsuit is not about the money.
Joe Hardy, a Republican, represents District 12 in the Nevada Senate. He writes from Boulder City.