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Supreme Court rejects challenge to teacher union-backed sales tax initiative petition

The Nevada Supreme Court building Monday, March 4, 2019. (David Calvert/The Nevada Independent)

The Nevada Supreme Court ruled Thursday in favor of a sales tax ballot question sought by the Clark County Education Association and rejected a challenge from business groups contesting language on signature forms for the petition.

The court issued a unanimous ruling, upholding a decision from Carson City District Court to amend and otherwise allow the 200-word “Description of Effect” for a ballot question that would raise the state sales tax as a push for more K-12 funding sought by the CCEA.

The order is a win for the union, as a reversal would have invalidated any previously gathered signatures and forced CCEA and an affiliated political action committee (Fund Our Schools) to start anew on any previously gathered signatures.

The union announced the initiative in January, which would raise the state’s Local School Support Tax from 2.6 percent to 4.1 percent and bring the state’s baseline sales tax rate to 8.35 percent. That proposal and another CCEA initiative to raise state gaming taxes were projected (pre-pandemic) to bring in more than $1.4 billion a year for K-12 education.

But the sales tax initiative was almost immediately challenged by a PAC affiliated with the Las Vegas Metro Chamber of Commerce, saying the petition’s “Description of Effect” — the 200-word summary of the initiative included on signature gathering forms — was misleading and did not fully explain the effect on sales tax rates if the initiative were to pass.

Carson City District Court Judge James Russell agreed and issued an injunction requiring the union-backed PAC to rework the language in March, but the Chamber of Commerce PAC appealed the decision to the state Supreme Court, challenging Russell’s ability to order changes to the “Description of Effect” language.

In its order, the state Supreme Court wrote that state law “clearly contemplates” a lower court judge’s authority to change “description of effect” language, and called the group’s other arguments for additional changes “inherently speculative and argumentative and is not proper for inclusion within a description of effect.”

A similar legal challenge filed against the union’s proposed initiative raising gaming taxes is still pending before the state Supreme Court.

In order to qualify, Nevada law requires backers of a statutory initiative to gather signatures from at least 10 percent of registered voters who cast a ballot in the previous election. For the 2020 election cycle, that means backers have to gather a minimum of 97,598 valid signatures and at least 24,400 in each of the state’s four congressional districts, which must be submitted by Nov. 18.

If enough signatures are deemed valid, the initiative petition moves to the 2021 Legislature, where lawmakers have 40 days to approve the petition. If they reject the petition or take no action, it would then move to the 2022 ballot.

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