Nevada's budget director told Carson District Judge Mike Griffin on Tuesday the teachers' union business tax would raise less than half the money the proposal would cost the state.
Perry Comeaux, director of administration for the state, said his calculations show the proposed 4 percent business profits tax would have raised $201.7 million if in effect this year. But he said the mandate in the plan requiring half of the state budget go to public schools would have cost $451.6 million.
The difference, said Comeaux, "would have to come from someplace else - other budgets."
The testimony was made during arguments over whether the tax plan would violate the Nevada constitution by not providing enough money to cover what it would cost.
But Judge Griffin questioned at one point whether that section of the constitution applies, saying the teachers may be right in arguing that section was aimed at new programs, not expansion of existing programs.
"It may be bad policy, but is it illegal? Maybe you've just got to change the way you do budgets," he told Comeaux.
But Thomas "Spike" Wilson, attorney for the business coalition that has challenged the teachers' tax petition, said he reads Article 19 of the constitution as mandating that "where an initiative includes an expenditure, it has to include a tax that pays for it.
"You cannot go outside the Legislature and increase a budget without creating a tax to pay for it," he said.
Comeaux testified that basic per-pupil support and funding for special education now requires 35 percent of the state general fund budget.
"The petition would require just basic support to be 50 percent of funding," he said.
And he said "basic support" doesn't include more than $102 million a year that goes for class size reduction, adult education, educational technology, remediation and teacher development among other programs.
He said his interpretation of the initiative is that the state would have to maintain that funding in addition to the 50 percent.
And he said the state would be unable to cut the total going to education even if the state fell on hard economic times.
"The language of the petition requires that school districts be provided with no less than half of the forecast amount of revenue," he said.
"We'd have to either draw down the (rainy day) fund balance or cut other budgets," he said.
But Nevada State Education Association financial analyst Al Bellister said Comeaux was wrong on several counts. He said NSEA intended that the $102 million in class size reduction and other special programs as well as other existing education funding be included in the total. He said altogether, that would bring the state's current education budget to $676 million.
In addition, he said NSEA experts estimate the business tax would raise more than $250 million a year, not $201.7 million. That, Bellister said, comes to a total of $926 million, which he said is half of the total $1.8 billion general fund.
"In other words, it adds up," he said. "The tax will pay for the program."
Lange also denied the plan harms other state agencies.
"We're not looking to draw money out of the rest of the budget to keep education whole at the expense of other programs," he said.
He said the intent was only to make sure state officials didn't use business tax money to replace other state money in the education budgets - effectively taking it out the back door and using it where ver they want.
"If there's a problem there, we'll work it out with them," he said.
The hearing is to wrap up today in Griffin's court. He is expected to decide soon, because he has said that no matter what his decision the other side will appeal to the Nevada Supreme Court.