RENO — Nevada’s hotel-casino industry wants a judge to halt a petition drive for a ballot initiative backed by the state’s biggest teachers union that would raise taxes significantly on the largest casinos.
The political arm of the Nevada Resort Association representing more than 70 hotel-casinos filed a lawsuit Tuesday seeking a court order prohibiting Nevadans For Fair Gaming Taxes from gathering signatures and nullifying the petition unveiled last month.
The fair tax coalition backed by Las Vegas-area teachers advocates amending the state constitution to raise as much as an additional $315 million a year from the largest casinos.
The Nevada Resort Association PAC says it would result in a 44 percent tax increase on some. It argues the petition’s description is potentially misleading and that the proposed effective date is unconstitutional.
The required, maximum 200-word description in the initiative makes no reference to how the new tax revenue that would flow into the state’s general fund might be spent.
But the lawsuit says the head of the Clark County Education Association backing the effort has been touting the tax hike as a way to raise hundreds of millions of dollars for education.
The lawsuit filed in state court in Carson City acknowledged the petition isn’t required to explain the types of programs the general fund supports.
“But the defendant does have to tell voters that the money will not be dedicated to education and that it will be deposited in the general fund,” the lawsuit states.
“The Legislature would have no duty to use any of this money for education. The Legislature would be free to spend it on state employee salaries, construction of state buildings or anything else.,“ it said.
John Vellardita, executive director of the Clark County Education Association, is listed as the contact person on the registration form of the fair tax PAC that filed the petition with the secretary of state on Jan. 13.
Two days later, another PAC backed by the education association — Fund Our Schools — submitted documents seeking a statewide vote to raise more than $1 billion annually for schools by increasing part of Nevada’s sales tax dedicated to school funding by 1.5 percent — from 2.6 percent to 4.1 percent. That would push sales taxes in Las Vegas and Clark County to nearly 9.9 percent.
Sponsors say they’ll have to secure 98,000 signatures on each measure by November to keep either alive.
If they do, the proposals initially would go to the legislature in 2021. If lawmakers reject them or fail to act, they would appear on the state ballot in 2022 for voters to decide themselves.
The casino ballot initiative proposal would add a fourth tier to the current casino tax schedule to collect 9.75 percent on monthly gross revenues of more than $250,000.
The three-tiered system currently tops out at 6.75 percent on monthly revenue greater than $134,000. Taxes would remain unchanged for smaller establishments
Verradita said Wednesday the legal challenge was expected.
“We believe their challenge is weak and in the end the initiative will go to the ballot in 2020. Absent a funding solution in the 2021 legislative session, we have confidence in the public making the right decision on this initiative in 2022,” he said via email.
The resort association said in a statement its industry “has consistently supported a broad-based business tax to support public education and has a long history of investing in Nevada’s classrooms.”
“Broad-based taxes are a sound and stable approach rather than the volatility that comes with taxing a single industry,“ it said.