A group representing a wide variety of Nevada businesses has filed suit to block circulation of the teachers union's proposed business tax petition.
The lawsuit filed by attorney Josh Hicks on behalf of the "Committee to Protect Nevada Jobs" charges that the petition is deceptive, misleading to voters, violates the law limiting any petition to just one subject and violates the state constitution.
"From the title on down, the initiative is deeply flawed and misleading," said Hicks.
He said first, the 26-page petition claims to be for funding education but that it "makes no provision for requiring that education funding be increased over current levels by even a penny."
In fact, he said, the petition would allow for a decrease in classroom funding, "which would be an unpleasant surprise to Nevadans who sign it."
"Quite clearly, this initiative is designed solely to increase general tax revenues and to take advantage of citizens' concerns about education in order to mislead them into signing the petition and, later, into voting for it," said Hicks.
The petition would impose a new 2 percent margin tax on businesses in Nevada and temporarily increase the existing modified business tax paid by banks. It would exempt natural persons, nonprofits and businesses making less than $1 million a year from paying.
The suit argues the petition's description of effect, a 200 word explanation of what a petition does, fails to inform voters of the effects and consequences of the petition ? in part by stating the money raised by the tax would be deposited in the state Distributive School Account when, actually, it simply goes into the General Fund and could be used to support any state program.
It argues that by adding a new chapter to state law and amending 23 distinct chapters, it clearly violates the single subject requirement imposed on all initiative petitions.
Finally, the challenge states that the petition violates Article 19 of Nevada's Constitution, which requires any statute or amendment that appropriates or requires expenditure of money also impose a tax or other revenue source sufficient to pay the cost. The petition, it states, appropriates $5 million from the General Fund to pay expenses of starting the new tax without providing a way to raise that revenue.
It asks the court to bar circulation of the petition and enjoin Secretary of State Ross Miller from putting it on the ballot.