The defeat of Question 3
November 6, 2014
Local dairyman and county commissioner Pete Olsen released a big sigh of relief after he heard of the statewide vote that soundly defeated Question 3, the Education Initiative that proposed a 2 percent tax on a business' gross revenue of $1 million or more and then channel the extra money into the Distributive School Fund.
Churchill County voted 6,631 to 795 against it, and statewide, the voters defeated it, 429,431 to 115,915.
Likewise, Karen Griffin, spokeswoman for the Coalition to Defeat the Margin Tax Initiative, said there was no guarantee that the money raised would be spent on schools. One thing for certain, though, is that the additional tax would have hurt thousands of the Silver State's businesses including Olsen's Hillside Dairy southwest of Fallon.
"It's been taken off the table, and we have certainty with our taxes," Olsen said Thursday after attending a Churchill County Commission meeting.
Olsen, though, said he is hopeful another group will not propose a similar bill to squeeze money out of businesses for education funding. If the ballot measure had been approved, Olsen said it would stifle economic development, and out-of-state people would have been reluctant to relocate to Nevada. Olsen said the mood around the state appeared to be anti-tax as evidenced by the defeat of Question 3 and the narrow passage of County Question 1 to continue local funding for major fire equipment and repairs.
"The will of the voters is don't put more on them," Olsen said.
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Pete and his brothers, Eric and Neal Olsen, own and manage Hillside Dairy, milks 2,000 cows and farms 1,500 acres.
According to an interview for the Nevada Farm Bureau, Eric Olsen said the dairy provides milk for hundreds of consumers and is also the primary source of income for the families of three brothers and their parents. Eric Olsen said during most years, the dairy's net income does not reflect gross revenue.
Pete Olsen said the economy is still shaky in rural Nevada, and because of the way the initiative was written, he said Hillside Dairy and others would not be able to pass the costs to the consumer.
"This was a brutal tax revenue … even the smallest dairy grosses more than $1 million," he said. "This year we made money, but for five years before this, we lost money. Thankfully, we have had a good year, but we wouldn't know where to come up with the additional money (for the Education Initiative)."
Ed Louie, owner of Louie's Home Center, said the passage of Question 3 would have cost him thousands of dollars each year.
"I was happy to see it fail," he said. "It would have cost us $60 grand and that is $60 grand. We would have cut expenses or raised prices."
He said another option may have resulted in laying off one or two employees, but he thought a combination of raising prices and reducing costs would have been the first step.
Louie said this year's electorate was in a no tax mood.
"Overall, the people elected were from the conservative side of the spectrum," he added. "Voters out there were also conservative."
Louie said getting the word out to educate voters about the negative effects of Question 3 was critical, and he gave letters to his employees detailing his options if Question 3 passed.
The Las Vegas Chamber of Commerce and chambers of commerce led opponents around the state, economic development authorities, insurance companies, building contractors and large businesses.
With Question 3's defeat, businesses are knocking on the door again, inquiring about the opportunities to relocate to Nevada.
Rachel Dahl, executive director of the Churchill Economic Development Authority, said businesses began calling her on Wednesday to ask about Churchill County.
"People are cognizant of the beginning of the economic recovery and did not want to see a setback," Dahl said. "I would say there's relief in this region among the people we work with."
Before the general election Dahl said businesses would not move forward with their plans until the vote was taken.
"Many frankly said they would not come here if it passed," Dahl said. "I also knew of businesses in the state that said they would have moved back (to their original state)."
Dahl said she was extremely pleased how businesses and politicians rallied to defeat Question 3 including the AFL-CIO in Las Vegas, which originally supported the bill but reversed its position in May.
"I am obviously elated for the sake of our businesses," said Natalie Parrish, executive director of the Fallon Chamber of Commerce. It's a testament to educating the people on this initiative."
The chamber director said small business owners were worried before the election and wondered how they would stay in business. Parrish also said Churchill County residents knew how much Question 3 would affect small businesses if passed, but they also recognize the need for more education funding. She said the Legislature must look at ways to address educational funding but not at the expense of businesses.
Parrish said she heard from retired teachers who were against it. Even the five candidates running for the Churchill County School Board all said they opposed the initiative.
Yet, educators are asking the state's lawmakers to find a way to fund education.
As Griffin said, though, "Now is the time to unite to decide what we're going to do to fix education."