Hearing set on teachers' tax petition

Former district court judge and Supreme Court justice Miriam Shearing will hear the case brought by Nevada casinos against a petition to increase gaming taxes to raise $250 million a year for public schools.

A Jan. 18 hearing has been set to begin reviewing the Nevada Resorts Association challenge of the teachers association initiative petition. The Nevada State Education Association filed the petition Nov. 18 to raise the percentage fee levied on Nevada's largest casinos.

If they can get it on the ballot and voters agree, the petition would add 3 percent to the gross gaming revenue tax now paid by casinos making more than $1 million a month. That would raise their tax rate from 6.75 percent to 9.75 percent, which association President Lynne Warne said still is one of the lowest rates in the world.

The petition is similar to one filed by NSEA in 2001. But it contained a different tax: a 4 percent tax on the profits of all Nevada businesses making more than $50,000 a year with the money dedicated to public schools.

That question was taken off the ballot by the Nevada Supreme Court for violating the law confining an initiative petition to one subject. Ironically, Shearing, who retired to become a senior judge at the end of 2004, was a member of the Supreme Court at that time and voted with the majority to take that question off the ballot.

The new petition is being challenged on the same grounds as the 2001 petition: That it covers more than one subject area and that it's brief introductory "Explanation of Effect" is misleading and doesn't match what the actual petition would do if added to the Constitution.

The petition contains language that attempts to prevent the state from "backing out" some of the $250 million by requiring they put at least as much general fund money into school budgets as in the previous budget cycle.

Then it requires that amount be increased every budget cycle by enrollment and inflation.

The resort association argues that would break the Nevada Plan, which has been the system for funding public schools in the state for more than 40 years "and saddle the taxpayers with an ever escalating spending obligation year after year."

They say the practical effect of that language is to take control over funding from lawmakers.

"The Legislature no longer has the discretion to determine the amount of state funds, if any, that are necessary to fund education," it states.

"Instead, the Legislature is now required to spend a set amount of funds, even if local and federal funds are sufficient to meet the basic support guarantees set by the Legislature for each biennium."

And the NRA argues the money per pupil isn't equalized as it is under the Nevada plan, opening the state to potential lawsuits because of the difference that would create in funding between rich and poor counties.

NSEA argues the average tax paid by casinos around the world is more than 15 percent and that Nevada casinos, some of the most profitable on the planet, can afford the hike.

At the same time, she said when the petition was filed that Nevada's per pupil funding is one of the nation's lowest.

The association's own Web site, however, puts average teacher pay in the middle with Nevada at 25th - about $43,000 a year.

• Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.