Democratic Senate Majority Leader Nicole Cannizzaro has introduced a bill that would allocate roughly $98 million in set-to-expire proceeds of the state’s payroll tax to school safety, Pre-K programs and expanding educational programs serving English-language learners and low-income students.
SB551, which was introduced on the Senate floor on Monday, proposes to restore all of the $30 million in funding for school safety programs that was cut from Gov. Steve Sisolak’s budget earlier this month by legislative budget committees, allocate an additional $4 million for Pre-K programs and boost funding of the state’s Zoom and Victory School programs by $63 million.
It comes as schools — most prominently the Clark County School District — are clamoring for more funding beyond the $62 million that lawmakers added to the general school budget over the weekend. It could put pressure on Republicans, who have called for more education funding and decried school safety cuts as lawmakers freed up more than $200 million from the governor’s budget, but who have been staunchly opposed to extending the payroll tax rate.
The funding would be directly allocated from a portion of the Modified Business Tax, which is assessed on payroll, that would not exist if the rate decreases at the end of the fiscal year because of provisions of a 2015 law requiring the tax rate to drop if certain taxes overperformed. Legislative Democrats earlier this month received an opinion from the Legislative Counsel Bureau stating that a two-thirds vote wasn’t needed to extend the tax rate — something Republicans have warned could spark a “constitutional crisis.”
“We've obviously put money in school safety enhancements, but trying to be responsible about our money and where we're spending it on enhancements to the budget,” Cannizzaro said. ”I think we recognize that there is a need for some additional funding to make that a reality and that's what this will allow us to do.”
Although Assembly members voted along party-lines Friday to approve AB538 — a separate bill removing the expiration date of the tax — the body moved on Monday to rescind the vote and placed the bill on the chief clerk’s desk, a sign that Cannizzaro’s bill will be the primary vehicle for the bill moving forward. In a statement, Assembly Speaker Jason Frierson said he fully supported the plan as a way to ensure sufficient funding for K-12 education.
"We have seen longstanding, bi-partisan support for extending the Modified Business Tax since its inception under Governor Kenny Guinn in 2003, and this session should not be any different," he said in the statement. "Too much is at stake to play politics with the future of our kids.”
“The question is, ‘If we pass MBT, then what is it going to?’” Cannizzaro added. “Well, It’s going to schools. That’s the bottom line. We have a choice to make between funding schools, or giving a corporate tax break. I think this bill answers that.”
Legislative Republicans have said they believe any extension of the tax would require a two-thirds vote and have threatened a lawsuit if the measure passes without a two-thirds majority. But the bill contains a section declaring that its provisions are not “severable” — meaning a judge could not strike down one part and uphold others — and states that if any parts of it are stricken down, all provisions of the bill are considered invalidated.
At least initially, Republicans still appear opposed to the concept. Republican Senate Minority Leader James Settelmeyer said he still planned to vote against any extension of the tax, saying the lack of a two-thirds requirement was unconstitutional and that Democrats could have funded school safety programs from other sources."
"Using children to try and pass a tax increase? Pretty sad," he said.
Fellow Republican Sen. Ben Kieckhefer said he hasn't budged from his previous opposition to the concept of extending the tax.
"I look forward to voting no," he said. "It's the same issue, right? The bill is unconstitutional on its face because of the MBT issue. It's not stamped two-thirds. They say it's unnecessary. Let them pass it."
Business groups have argued against the MBT extension on the grounds that it erodes the meaning of the constitutional provision requiring two-thirds of lawmaker votes to raise a tax. They also say it violates an agreement made with the business community about what would happen to their taxes should the economy perform well.
Cannizzaro said she didn’t know whether any Republicans would cast a vote in favor of the bill and thus dispel questions about the two-thirds requirement, but said they had a decision to make between supporting a tax reduction for businesses or education funding.
“I think the Republicans are going to have to make a decision about whether or not they care about funding our schools,” Cannizzaro said. “We would love to have our colleagues join us in supporting public education in the state. We would love to have them work with us on this issue, but if they want to pick corporate tax breaks over education funding, then that's their decision.”
She also chafed at the assertion from Republican senators that there are hundreds of millions of dollars waiting in the wings to be spent on education.
“The idea that there is $250 million sitting in the state budget that could be allocated is both wildly inaccurate while also fiscally irresponsible,” Cannizzaro said. “That money is not what it appears to be, unless you want to take one-time money and appropriate it to ongoing programs.”
Cannizzaro said the additional funding would amount to a 50 percent increase to Victory School programs and 25 percent more to Zoom School programs.
“I think we have heard that in almost every conversation about education Zoom and Victory are programs that work and that they need that funding in order to continue to be successful and that they really do target students who need support in the schools,” Cannizzaro said.
The bill also authorizes up to 50 percent of excess portions of the More Cops sales tax imposed in Clark County to be transferred to the Clark County School District for employing and equipping more school police officers.
Cannizzaro said she expects the bill to come up for a hearing as soon as possible.
"I think our plan is to hear it sooner rather than later," Cannizzaro said, "and obviously hopeful that we'll get a vote for it."
Updated at 3:43 to include quotes from Republican Sens. James Settelmeyer and Ben Kieckhefer.