Lawyers for the teachers' union told a Carson City district judge on Monday he will soon get a brief from the state's largest casino association supporting the constitutionality of their business tax initiative.
The Nevada State Education Association convinced 63,000 voters to sign the plan calling on legislators to enact a 4 percent tax on all businesses to increase education funding.
But businesses led by several chambers around the state and the Nevada Taxpayers Association filed suit challenging the tax plan as constitutionally flawed.
The two sides went before Carson District Judge Mike Griffin on Monday to argue the case. Griffin has said the issue will be appealed no matter who wins but that he intends to conduct a "trial on the merits" of both the constitutional challenge and the teachers' motions to dismiss the case or for summary judgment to build a proper record for consideration by the Nevada Supreme Court.
Education association lawyer Mike Dyer informed both Griffin and opposing counsel Thomas "Spike" Wilson during his opening statement that the Nevada Resort Association "will be requesting permission to file an amicus brief in support of the initiative."
Dyer said afterward the resort association's brief will support two key positions in the legal challenge. The business lawsuit says that because of the way the tax plan is designed, it would be applied to some individuals and, therefore, is the same as a personal income tax to those people. Nevada's constitution specifically prohibits a personal income tax.
In addition, the business suit argues that the tax requires the state to put more money into K-12 public education than it would generate.
According to Dyer, the resort association's "friend of the court" brief will support the teacher's position on those issues as well as the charge that, in some cases, the tax could be imposed on earnings generated from tax-exempt municipal bonds.
Resort Association Director Bill Bible could not be reached for comment on Dyer's assertions to the court. However, the association was more adamantly opposed to the other tax alternative raised this year - State Sen. Joe Neal's proposed 5 percent increase in the gross gaming tax.
Bible has said in the past that before any new tax is enacted the state must review current programs and see if there are ways to cut expenditures so that no one has to pay higher taxes.
Resort association officials have also made it clear that they believe any new tax should be spread across a broader base than just casinos.
The comments came as the five-day trial got off to a slow start in Griffin's court. He halted the proceedings late in the afternoon, instructing the two sides to work with his clerks to assign numbers to several hundred examples of petition documents Wilson argues are flawed and illegal.
Dyer said it is wrong to disqualify the petitions on technical grounds.
"What we're doing here today and next week is engaging in a process to disenfranchise 63,000 voters," he said.
He told Griffin the petition should be presented to the 2001 Legislature and, if that body doesn't act, to the voters in 2002 unless "the initiative petition itself is so clearly unconstitutional it cannot be salvaged in any way."
He said even if the court doesn't like the controversial section that would require half the state general fund to go for public education, the rest of the plan should not be tossed out.
That section has generated the most protest from the state budget office which says that is an arbitrary order to put so much money into education without a guarantee the tax will generate enough cash to cover the cost. That would violate Nevada's constitutional requirement that any mandate be accompanied by a tax that will cover its cost.
Wilson said the tax is not an effort to disenfranchise the voters.
"In fact, my heart is with the teachers, but these are constitutional issues, not emotional issues," he said referring specifically to the 50 percent requirement.
Griffin said the proceeding would resume this morning after the exhibits Wilson plans to use are properly marked and cataloged.