Judge considers teachers' gaming tax petition

Senior Judge Miriam Shearing was told Monday the teachers union initiative to pump up education spending by raising gaming taxes "utterly fails to comply" with Nevada law requiring an accurate description of what it would do and limiting initiatives to one subject.

But lawyers for the teachers argued it meets both those requirements and that arguments about the content and operation of the proposed amendment should wait until after voters decide the issue.

The initiative would raise the gaming tax from 6.75 percent to 9.75 percent on casinos taking in more than $1 million a month and expand it to include large slot-route operators.

Todd Bice representing the Nevada Resorts Association said raising the gaming tax, actually a percentage fee charged against gross casino winnings, is one issue. The other in the initiative, he said, is the language mandating that education funding increase every biennium by growth plus inflation.

"We believe those are fundamentally different questions," he said.

He told Shearing, a former district judge and retired Supreme Court Justice, the only way to cure that fault is to split the initiative into two ballot questions.

"Now is the time to take these two separate questions and break them out," he said. "There's no question the two concepts are different."

Bice also faulted the "Description of Effect" saying it must explain accurately what the initiative would do if made part of Nevada's Constitution.

"It is not intended as an advertisement for the proponents," he said.

Scott Scherer, representing the Las Vegas Sands, said the description is on every signature sheet and is "what the voters will rely on in deciding whether to sign the petition. And both pointed out that, since there is no attribution on the description, many voters believe it was written by a governmental agency and, therefore, can be relied on to be accurate.

They told Shearing the petition doesn't explain the sweeping effect the petition would have on how schools are funded and doesn't explain that it would not distribute the added funding according to the same per-student formula used to divvy up the rest of state school funding. They said it also doesn't adequately explain that voters supporting a tax hike on casinos would also be committing themselves to higher and higher-education funding no matter what the situation is in the future.

And he said it doesn't provide money to cover the huge cost the Gaming Commission will have in monitoring and auditing the winnings of slot route operators, who are not currently paying the percentage gaming fee.

"(The teachers union) does not have the right to pick and choose which effects to list," Scherer said.

But Jim Dyer, representing the Nevada State Education Association, said the initiative is on one subject.

"What is its purpose? Its purpose is not to tax gaming. The purpose is to increase funding for education," he said.

He said both the revenue from the gaming fee increase and the requirement education funding increase every biennium "are functionally related and germane" to that purpose.

He and Jim Penrose argued the purpose of the language increasing funding every budget cycle is to stop the state from "backing out" the money raised by the new revenue and using it in other areas of the budget.

Penrose also argued there are millions of dollars in the education budget now that are distributed "per program instead of per pupil."

He said that means there's nothing evil about the fact the initiative doesn't distribute the revenue on the same per-pupil basis as in the Nevada Plan, which governs the distribution of most public school funding.

In his rebuttal, Bice said now, not after the question goes on the 2008 ballot, is the time to sort out problems with the initiative.

Shearing took the case under advisement, promising a ruling as soon as possible.

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