Nevada voters reject margins tax, OK appeals court
November 5, 2014
LAS VEGAS — Nevadans turned down an education funding ballot measure on Tuesday, amid what one voter characterized as an onslaught of expensive advertising funded by business groups united against what they labeled an indiscriminate 2 percent margins tax that would hurt the state economy.
Question 3 fell Tuesday by a better than three-to-one margin after opponents spent some $5 million on the campaign against it. Proponents spent about $1.6 million, making the battle one of the most expensive involving a ballot measure ever in the state.
Voters also approved creating an intermediate Nevada court of appeals, while returns early Wednesday showed a close vote on an initiative that would lift a constitutional cap on taxes for mining interests.
Nevadans have for weeks heard the Education Initiative derided by opponents who maintained that a 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.
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She said the vote "shows that Nevadans were united against Question 3 because it was such a flawed proposal."
"Now is the time to unite to decide what we're going to do to fix education," Griffin said.
Ed Wannebo, 58, of Henderson, said he was swayed to vote against the measure by what he called "the onslaught" of advertising raising questions about it.
"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.
"We got overwhelmed on TV. We were outspent," said Dan Hart, spokesman for the Education Initiative PAC. "We assumed, apparently incorrectly, there would be a stronger Democratic turnout."
In the fourth vote in 24 years, Nevada voters finally approved a measure to change the state constitution and create a state appellate court to handle some of the thousands of cases currently backlogged before the state Supreme Court.
Passage of Question 1 means that three judges will be appointed by the governor to hear cases appealed to the seven-member Supreme Court and designated by the justices for appellate court review. High court justices would still have the option of reviewing appeals court decisions.
Until now, the Supreme Court has been the only appeals court in the state. Amid statistics showing that the court gets up to 2,500 appeals a year and has some 2,000 cases pending, support appeared strong in Nevada legal circles.
Justices decide everything from death penalty reviews to civil disputes to driver's license revocations.
"You can't overload the Supreme Court with things that shouldn't be there," said voter and retired lawyer Nikkie Laventis, 54, of Las Vegas.
Nevadans for a Court of Appeals, with backing by big law firms and several casino companies, spent more than $214,000 in support of the measure, which had no organized opposition.
But similar measures to establish an appeals court had lost three times — in 1980, 2002 and 2010.
Nevada Supreme Court Justice James Hardesty said he made some 127 presentations around the state since September 2013, explaining that the proposal wouldn't cost anything but would help relieve the backlog of cases. He said he gauged support from Republicans and Democrats alike.
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.
"Amending Nevada's constitution is really tough," Hardesty said. "But Nevada voters are very thoughtful. When they are provided with the facts they give it very fair consideration."
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.