Geoff Dornan

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June 7, 2012
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Teachers file petition for business tax

The state teachers' union has filed what President Lynn Warne concedes is its fourth or fifth attempt to impose a tax to generate more money for K-12 education.

The proposed statute calls for a margins tax on all businesses including professional offices such as lawyers, architects and engineers.

Asked whether voters would understand the proposed tax, which took 32 pages to outline in the petition, she said: "This is a complex tax, but we feel it's broad-based and it's fair."

She said the plan that supporters hope will generate $800 million a year for education is important if Nevada is to improve public education.

"This isn't just a union issue," she said. "We've done a dismal job funding education."

Warne said Nevada ranks nearly last in the nation in per-pupil funding for K-12. That, she admitted, is just counting the direct state funding to schools. It doesn't include the property tax, sales tax, room tax and other revenues in each of the 17 county school districts. When those are counted, Nevada's per-pupil funding is about average for the 50 states.

In terms of teacher pay, Nevada is also about average nationwide, largely because of the amount of non-state revenue - most of which was imposed by the Legislature and governor, not local governments.

Warne argued that those funds are "local effort" and shouldn't be counted.

She said that contrary to what some might think, she expects some support from business because they need a better-educated workforce.

"Improving our state's quality of education is critical to Nevada's economic recovery and our ability to attract new industries and the jobs of the future," she said.

Warne said the money is intended to increase support for education, not other state programs but also said that there really isn't a good way to keep lawmakers and the governor from siphoning off some of it, with the exception of public pressure from parents who want to see better school programs.

She and lawyer Jim Dyer filed the petition with the Secretary of State's office Wednesday morning as a statutory initiative. If they collect enough signatures, the proposed statute will be presented to the 2013 Legislature. If the governor and lawmakers refuse to approve the tax, it would go to a vote of the people at the 2014 general election.

Dyer said that the tax is based on a Texas law. He said calculating the tax begins with a business's total revenue. Then the business can set its margin either at 70 percent of that total or total revenue minus costs, including materials, salaries and other expenses, whichever is less.

Then, for entities doing business in more than one state, he said, the business calculates the portion of its business in the state of Nevada.

The tax is set at 2 percent of that number.

Dyer said that there are really only two exemptions in the proposed tax plan. First, the tax doesn't apply to businesses making less than $1 million a year. Second, casinos don't pay on gaming revenue. Gaming win is already taxed at rates of up to 6.75 percent by the Nevada Gaming Commission.

He said mines, however, don't get an exemption.

"Mining is taxed the same as any other industry," he said, arguing that that doesn't violate the constitutional restriction on taxing the mining industry.

"Miners may argue that," he said.

In order to get the statutory petition to the 2013 Legislature, the group will need to collect at least 72,352 signatures of registered voters statewide, at least 18,088 of them in each of Nevada's four congressional districts.

The signatures must be filed with the Secretary of State's office by the close of business Nov. 13.

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The Nevada Appeal Updated Jun 7, 2012 06:02PM Published Jun 7, 2012 06:02PM Copyright 2012 The Nevada Appeal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.