Nevada voters kill margins tax to pay for schools

LAS VEGAS — Nevada voters have turned down an education funding ballot measure that drew united opposition from business groups in one of the most expensive ballot campaigns ever in the state.

Question 3 was defeated Tuesday by a better than three-to-one margin. Opponents labeled it a 2 percent margins tax and spent $5 million on the campaign against it. Proponents spent about $1.6 million.

Early returns showed close votes on initiatives that would lift a constitutional cap on taxes for mining interests and create an intermediate state court of appeals.

Nevadans have for weeks heard the Education Initiative derided by opponents who maintained that a 2 percent margins tax on businesses with revenues of at least $1 million a year would force employers to eliminate jobs and businesses to pass costs to consumers.

Karen Griffin, spokeswoman for the Coalition to Defeat the Margin Tax Initiative, said there was no guarantee money it raised would be spent on schools.

Ed Wannebo, 58, of Henderson, said what he was swayed by what he called “the onslaught” of advertising, and voted against the measure.

“I don’t think I had enough sense of where the funds were really going to go,” said Wannebo, a country music production manager who said he usually votes conservative and Republican.

Opponents were led by the Las Vegas Chamber of Commerce, insurance companies, building contractors and large businesses opened their wallets to outspend proponents about four-to-one.

Support for the measure largely came from teachers and unions frustrated that Nevada ranks near the bottom in the nation in per-pupil spending.

“If nobody ran TV ads, we’d win,” said Dan Hart, spokesman for the Education Initiative PAC and a veteran of 25 years of Nevada political campaigns. “People want more money in education. We’re actually doing something and giving voters a chance to do something.”

Support appeared strong in Nevada legal circles for the appeals court measure, Question 1.

But prospects for passage seemed uncertain in a state where measures to establish an appeals court have lost three times in the last 24 years — in 1980, 2002 and 2010.

Law firms and casino interests funded a $250,000 campaign by Nevadans for a Court of Appeals.

Meanwhile Nevada Supreme Court justices led by James Hardesty spent months explaining that the proposal wouldn’t cost anything, but would help relieve a backlog of about 2,400 pending cases before the state high court. Justices decide everything from death penalty reviews to civil disputes to driver’s license revocations.

“Amending Nevada’s constitution is really tough,” Hardesty said Monday. “But Nevada voters are very thoughtful. When they are provided with the facts they give it very fair consideration.”

Proponents said the $1.5 million in operating costs for three appellate judges in Las Vegas to hear cases assigned by the seven-member state high court would be offset by a similar amount that the Supreme Court returns annually to the state general fund.

The mining tax initiative would remove constitutional protections for the Nevada mining industry dating to statehood in 1864. Approval would let the Legislature and governor increase taxes paid by the mining industry, which currently are capped at 5 percent.

The campaign generated little public debate, and the measure might have little effect if it passes because the Legislature adopted a law last year that would provide property tax exemptions for mining companies that would be about equal to the amount of increased taxes they might pay.