Supreme Court will not hear tax case
The U.S. Supreme Court refused on Monday to hear an appeal of the Nevada Supreme Court’s tax decision last summer setting aside the two-thirds majority requirement to raise taxes.
But John Eastman, the legal scholar who filed the appeal on behalf of a group of Republican lawmakers outraged by the decision, said denial at this stage wasn’t unexpected.
“I made the argument this was an extraordinary case which warranted their review, but I’m not surprised.”
He and Legislative Counsel Bureau Director Lorne Malkiewich said the Supreme Court generally follows the doctrine that state supreme courts are in charge of interpreting state constitutions.
“But I want to point out that denial of certiorari (appeal) is not an indication of any opinion by the Supreme Court,” said Eastman.
Malkiewich said the refusal is in line with prior opinions in that “regardless of your opinion of the decision of the Nevada Supreme Court, that court is the final arbiter of Nevada law, and that’s pretty fundamental.”
Gov. Kenny Guinn sued the Legislature after that body failed to pass a balanced budget, asking the court to order it to meet constitutional requirements. But the court, with only Justice Bill Maupin dissenting, ruled the two-thirds majority requirement to raise taxes in the state constitution must “give way” to the mandate the Legislature fund education. The court ruled a tax increase could be approved by a simple majority, despite the constitution.
The Legislature finally found the two-thirds majority in each house and passed a budget – and tax increase to pay for it. But Republicans who had held out to try reduce the size of that tax package went to the U.S. Supreme Court seeking to overturn the decision and erase it from Nevada’s legal record.
Eastman said the Supreme Court notice ends that legal battle, but he will pursue a federal court lawsuit seeking an injunction preventing lawmakers from trying to pass taxes by a simple majority in the future. Whether federal district court has jurisdiction over the issue is set for argument before the 9th Circuit Court of Appeals in San Francisco on April 15.
“The day this is scheduled for is tax day,” said Eastman. “The irony doesn’t get any thicker.”
Malkiewich said the Legislative Counsel Bureau’s argument is that case is moot because lawmakers passed a tax plan by two-thirds, not by simple majority.
Assemblyman Ron Knecht, R-Carson City, said he will take a different road to ensure the Nevada Supreme Court ruling isn’t used in the future – a constitutional amendment that imposes a cap on how much state budgets can grow each year, and gives that cap and the two-thirds requirement to raise taxes precedence in Nevada’s constitution.
Knecht is one of the Assembly members who held up the tax plan, demanding it be reduced by cutting the proposed state budget. He presented the same proposal last session, but AJR18 died without receiving a hearing. He said he will bring it back this next session.
“It will codify in the constitution what, up until this last session, has been the practice for 50 years – that state spending grows with the economy and no faster,” he said.
Knecht said it will cap spending growth by state government and spell out that the two-thirds majority and spending cap supersede any conflicting provisions in Nevada’s constitution.
“It will serve notice it is the intent of the Legislature and the people to reverse the damage they (the court) did in Guinn v. Legislature,” he said.