Carson District Judge Mike Griffin says he'll rule by Dec. 6 on whether all or part of a teachers' union business tax initiative is unconstitutional.
Testimony wrapped up this week, with most of the controversy focused on provisions in the plan that mandate half of the state's general fund budget go to public education.
Teachers put that language in to prevent lawmakers or the governor from using money raised by the proposed tax on other programs.
The initiative, signed by more than 63,000 Nevada voters, would impose a 4 percent net profits tax on all businesses making more than $50,000 a year.
If the 2001 Legislature refuses to approve it, it would go before voters in 2002.
Businessmen, chamber of commerce officials from around the state and the Nevada Taxpayers Association sued to block the initiative from going to the Legislature, arguing that it violates the state constitutional requirement that any petition mandating a program provide a tax sufficient to pay the costs of the program.
Griffin gave both sides until Thursday to file written briefs arguing their side of the case. He said he would rule by Dec. 6 at the latest and that he expects the matter will be appealed to the Nevada Supreme Court no matter which way he rules.
Former state Budget Director Judy Sheldrew agreed with earlier testimony that there is no logical way to interpret the plan so that it pays for the services it mandates, a requirement under Nevada law.
Although the tax would raise $200 million to $250 million, Sheldrew said her calculations show it would fall anywhere from $102 million to $301 million short of its total cost.
Current state Budget Director Perry Comeaux has estimated the shortfall at $200 million to $249 million.
Sheldrew said the big problem with the plan is that it mandates half the state budget for "basic support" - the amount the state contributes to Nevada's local school districts for each pupil, plus the state's contribution for special education.
The teachers' union argues that programs such as class-size reduction are included under basic support, so the tax would bring in more money than it would cost to administer.
However, the teachers' union also argued during the 1999 Legislature that such programs must be kept separate from basic support for the schools, otherwise they would be absorbed into regular school budgets.
Sheldrew agreed with teachers' union lawyer Mike Dyer there is no statutory definition of "basic support," but she said both the budget office and Legislative Fiscal Division have used the same definition for more than a decade.
That left teachers' union financial expert Al Bellister in the position of arguing that the current state budget director and his predecessor are both wrong in their explanation of how the education budget is constructed.
Dyer has argued the plan isn't unconstitutional if it can be made to work by changing the definition of basic support.