VICTOR JOECKS: Democrat tax hike vulnerable to lawsuit

The legislative session is over, but the drama isn’t.

On Monday, Democrats extended the current Modified Business Tax rate. The tax was scheduled to decline. The Legislature has the ability to raise taxes, of course, but the state constitution limits that power. Any bill “which creates, generates or increases any public revenue in any form” requires two-thirds support in each house. Extending the MBT rate will raise around $100 million over the next two years.

Democrats claimed the MBT extension, contained in Senate Bill 551, didn’t need a two-thirds vote. The Legislative Counsel Bureau, at the behest of Democrats, produced a legal opinion reaching the same conclusion. That’s laughable because the reason Democrats wanted to extend the tax is to spend the money it would generate.

On Monday, Democrats showed they know they’re on shaky legal ground. They offered an amendment that would have added a two-thirds requirement onto the bill, hoping to gain Republican support. Democrats needed one vote in the Senate to reach two-thirds. They had a super-majority in the Assembly.

Republicans stood firm. It was a terrible offer anyway. Democrats included a poison pill along with $9.5 million in additional tax credits for the school choice program Opportunity Scholarships. Most scholarships would go only to current enrollees, which would prevent many new students from taking advantage of the program.

After their gambit failed, Senate Democrats passed a different amendment, which didn’t contain a two-thirds requirement. It also limited Opportunity Scholarships in the same way and repealed the Education Savings Account program. Republicans passed ESAs in 2015, but the program never went into effect because the Nevada Supreme Court ruled that, while ESAs were constitutional, their funding source was not. The program hasn’t been paid for since, despite thousands of families applying for it.

The bill passed without a two-thirds majority in the Senate. The Assembly passed it by two-thirds. It’s on to Gov. Steve Sisolak, who has said he’ll sign it. Senate Minority Leader James Settelmeyer has all-but promised a lawsuit.

If Republicans sue — which they should — things will really get interesting.

There’s the importance of defending the constitution: It would make a mockery of that document reminiscent of the infamous Guinn v. Legislature decision from 2003 if the state Supreme Court lets this bill stand.

But the bill also directed $72 million to school districts. The Clark County School District has said it needs these dollars to afford the 3 percent pay increase Sisolak promised teachers. The Clark County Education Association is continuing to threaten a strike if it isn’t happy with the district’s new spending plan.

That shouldn’t scare Republicans off. If anything, it should embolden them. If Democrats bungled the state budget so badly that even their own allies are upset with them — to the point of striking — that doesn’t reflect poorly on Republicans.

Bring on the lawsuit.

Victor Joecks’ column appears in the Opinion section each Sunday, Wednesday and Friday. Listen to him discuss his columns each Monday at 10 a.m. with Kevin Wall on 790 Talk Now. Contact him at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on Twitter.