By Ben Velderman
CARSON CITY, Nev. – The Nevada Supreme Court ruled Thursday that an $800 million tax increase initiative being pushed by the state’s teachers unions passes constitutional muster and must be considered by the state legislature.
The initiative calls for a 2 percent margins tax on Nevada businesses, which would generate about $800 million for Nevada’s public education system.
Since the court upheld the legality of the union-backed tax initiative, the state legislature has 40 days to decide whether or not to pass the tax hike.
“If lawmakers decide not to approve the initiative, it will go to voters in 2014,” the Las Vegas Sun reports.
That means Nevada’s teacher unions will get two bites at the apple. If lawmakers kill the tax hike, the union can begin making an emotional appeal to voters for a future vote.
Union leaders are already framing the tax increase as “a civil rights issue.”
“The failure to invest in our public education system adequately carries with it very real fiscal costs, because kids who don’t succeed academically are less likely to be employed, more likely to need public health assistance and are more likely to be incarcerated,” said Gary Peck, Nevada State Education Association executive director, according to the Sun.
Such sermonizing is tough to take from teacher union leaders who have consistently put their members’ financial interests ahead of students’ needs.
Just last year, Nevada’s Clark County Education Association successfully sued to have its members receive a pay raise even though it meant the cash-strapped district had to pay for it by reducing its teaching staff, cutting student programs and increasing class sizes.
But even if Nevada lawmakers (or voters) fall for the unions’ boo-hoo baloney, there’s no guarantee that the new $800 million in revenue will end up in the classroom.
An anti-tax group, the Committee to Protect Nevada Jobs, says there’s nothing to prevent lawmakers from using the new $800 million for school aid while shifting existing school aid to elsewhere in the budget, reports the Las Vegas Review-Journal.
Business leaders are also concerned about the economic impact the tax hike might have on Nevada’s fragile economy. While the tax would only directly affect businesses, business leaders say all Nevadans would end up shouldering the costs through higher prices and fewer jobs.
“If it doesn’t create a new recession in Nevada, it may extend the one many of believe we are not out of yet,” Bryan Wachter, director of government affairs for the Retail Association of Nevada, told the Review-Journal.
If lawmakers pass the tax hike, Gov. Brian Sandoval seems likely to veto it. Sandoval has publicly said he will not support a tax increase while the economy is weak.
The unions, however, like their chances in a public vote.
“We have no doubt that it will be passed by the people of the state of Nevada,” Peck told the Sun.