Nevada Supreme Court asked to block commerce tax referendum

The Nevada Supreme Court was told Monday the petition to repeal the commerce tax should be blocked for not strictly complying with the constitution.

Matt Griffin representing the Coalition for Nevada’s Future said whether voters back or overturn the referendum, “It’s set in law and the legislature can’t amend it.”

“The same is not true for an initiative petition,” he told the court.

Kevin Benson, also representing the coalition, said if the petition even makes it to the ballot it would become “a super statute” much like Nevada’s original 2 percent sales tax enacted by referendum in 1955. That means it couldn’t be raised, lowered or altered in any way unless the voters themselves change its provisions.

If drafted as an initiative, the vote would either repeal or uphold the tax without barring further legislative action.

Controller Ron Knecht, who is heading the petition drive, said after the case was originally argued in district court that that’s why it was drafted as a referendum, not an initiative.

“Either way we win,” he said.

The commerce tax would impose a tax on all businesses grossing more than $4 million a year.

Griffin said the referendum is flawed because it doesn’t refer to a statute but to a piece of legislation — Senate Bill 483 — that contains the commerce clause. He said referenda must strictly comply with constitutional requirements and that means it must refer to a statute, not a piece of legislation. He said it also contains numerous administrative details such as filing dates that are barred from being part of a referendum.

Griffin also argued that the petition would unconstitutionally unbalance the state budget by removing $121 million from the biennial revenue stream without replacing that revenue. He said if lawmakers can’t pass an unbalanced budget, neither can the voters by petition.

But Craig Mueller, representing the petition’s backers, said that amount of money is just a half percent of a budget that was built on projected revenues and has, in other years, been far more out of kilter than a half-percent.

He argued that, if this referendum can’t make it to the ballot, no referendum can.

“The issue here is direct democracy,” he said. “Are we going to allow it to happen?”

He said the petition refers to the bill, not a statute, because the measure had been passed and signed by the governor but not yet codified into statute when they drafted it.

“I cannot think of a more appropriate use of the referendum power,” he said.

Griffin also argued that the way the petition is drafted is confusing and could actually lead voters to vote against their own wishes. He said it doesn’t clearly say that a “yes” vote would repeal the tax but a “no” vote would prevent lawmakers from changing any part of it.

Justices Michael Douglas and Kris Pickering too questioned whether the way the petition was written is confusing.

Mueller, however, said the description of effect was drafted by the Legislative Counsel Bureau and, despite the bracketing or deleted material and other typographic devices used in presenting and amending legislation, is clear for voters to read.

If the petition survives legal challenges, supporters will have to raise at least 55,234 valid signatures including at least 13,809 in each of the state’s four congressional districts and do so by June 21 to get it on the ballot.

There have been some reports that, while the petition is doing well in rural parts of the state, it is not gathering enough signatures in Clark and Washoe counties that, between them, have 75 percent of Nevada’s registered voters.