RENO - Before a cheering group of 350 teachers, directors of the Nevada State Education Association Saturday kicked off their drive to create a business tax that raises $250 million a year for better schools.
Despite the booming economy and agreement even from Gov. Kenny Guinn that education needs money to get better, NSEA President Elaine Lancaster said, "the political structure of Nevada has been unable to muster the courage to create the resources we need."
"The nation and, in particular, this state, finds itself in the midst of record breaking prosperity, yet our wages don't reflect the good times businesses are enjoying," she said to cheers from the crowd at NSEA's delegates meeting in Reno's Peppermill Hotel/Casino.
She said schools received only two dollars per student more from the 1999 Legislature, forcing teachers to file their initiative petition. She said that petition will spread the cost of public education more fairly across the state.
"Today, the burden falls on individuals and families as the primary source of revenue for schools," she said. "Yet one group who profits greatly from educated, qualified workers and consumers pays little or nothing to support public schools. That group is business."
She said, however, many businessmen agree and that NSEA polls show as many as 45 percent of them will support the initiative.
"They know that when you make a profit and take something from the community, you have an obligation to put something back," she said.
Lancaster said the teachers propose a 4 percent tax on net profits of all businesses including casinos. That is far smaller than the 5 percent gross profits tax proposed by state Sen. Joe Neal, D-North Las Vegas, which would work out to about 23 percent of net profits.
And she pointed out that businesses only pay the teachers' proposed tax if they make a profit. And the first $50,000 in profits is exempt from the tax, which Lancaster and NSEA financial analyst Al Bellister said excuses nearly a fourth of all Nevada businesses.
In fact, she said, the wealthiest 8 percent of Nevada businesses would pay 90 percent of the tax.
She also said NSEA analysts can show that more than half the tax would be paid by "businesses that make a profit in Nevada but take it to other states where they reside."
"It's simple, its fair and it's time," she said repeating the association's theme for the tax petition drive.
Opponents are expected to take the teachers' proposal much more seriously than Neal's initiative since there is no doubt the 23,000 members of NSEA will be able to get the 44,000 signatures needed to put the issue on the ballot. Neal is expected to have trouble raising signatures for his plan particularly in rural counties. The law requires not just 44,009 total signatures but 10 percent of registered voters in at least 13 of 17 counties.
Lancaster said she expects they will raise more than double the minimum number.
Once teachers get the necessary signatures, the 2001 Legislature will have just 40 days to approve the plan or it will be put on the ballot for Nevada voters to enact at the 2002 elections.
A key part of the proposal is language designed to prevent the Legislature or the governor from just cutting back other state funding for education, effectively nullifying the tax and using what they save elsewhere.
"One of the things the state currently funds, for example, is money for new teachers - for growth," he said. "This doesn't absolve the legislature from that responsibility."
Nonetheless, there is no way to write a law which would require lawmakers to increase other state funding for education which means that, over time, lawmakers could "back out" the money raised by the tax just by not increasing general fund contributions for education.
Bellister said a 4 percent tax shouldn't hurt the economy since Nevada would still have one of the nation's lowest business taxes.
Gov. Guinn has already come out against the tax plan as have several chambers of commerce and other business groups, which Lancaster protested saying they vowed to oppose a plan they hadn't even seen.
The money raised would go into a special account and could be used only for those things listed in the legislation contained in the initiative petition.
Bellister admitted that, under the terms of the legislation and existing local government employee arbitration laws, all the money could theoretically be used for salaries.
But he and Lancaster both said that includes many things in addition to teacher salaries but that salaries are high on most teachers' list of priorities.
She said their plans for the money also include technology, more and better class facilities, promoting parental involvement and increased student accountability.
They have until Nov. 14 to file their petitions.