Democrats could put tax increase issue on 2012 ballot

CARSON CITY -- Think the Nevada Legislature needs a two-thirds supermajority to raise taxes?

Think again.

The Legislature's Democratic majority could raise cash to spend on education, social services and other programs as early as Jan. 1, 2013, without support from any Republican lawmakers, the endorsement of Republican Gov. Brian Sandoval or a statewide signature drive.

A 1994 law that requires a two-thirds legislative majority to raise taxes also includes a provision that allows the Legislature to punt the decision to voters as soon as the next general election -- which would be 2012 -- with a simple majority vote. That approach could bring in new revenue sooner than other types of ballot measures.

Although such a move wouldn't solve the state's immediate budget woes, it could offer the promise of increased revenue before the end of the 2011-13 biennium.

And the potential for a brighter future heading into the 2013 session of the Legislature could soften the blow of short-term cuts to schools and other programs this year.

The provision is part of a constitutional amendment pushed by former Gov. Jim Gibbons when he was an assemblyman.

It poses fewer political hurdles to get a question on the ballot than other methods do.

It allows the Legislature to pass by simple majority a bill that would ask voters to approve a tax increase.

If Sandoval either signed or ignored the bill, it would go before the voters in the next general election, said Lorne Malkiewich, director of the Legislative Counsel Bureau.

If Sandoval vetoed the bill, it would go back to the Legislature, where supporters would need to build a two-thirds majority to override.

So far Sandoval, who was elected in large part on a promise to oppose tax increases, hasn't taken a stance against potential tax votes by the citizenry.

"We'll cross that bridge when it comes, but I've always been supportive of people's right to vote," the governor said recently in response to a question about taxes on the ballot.

If Sandoval were to veto the bill, pro-tax forces might have an easier time getting the three additional state Senate and two additional Assembly Republicans they would need for an override because legislators would be voting to put the question to the people, as opposed to making the decision themselves.

"If you want to take a tax package to the people and they want to vote on it, that is their decision," said state Sen. James Settelmeyer, R-Minden.

Settelmeyer and the nine other Senate Republicans recently signed a letter stating they back Sandoval's "no new taxes" campaign promise.

But Settelmeyer also said he would reserve judgment on a potential ballot question until he saw it.

"There are some taxes that are fairer than others," Settelmeyer said.

Asked to be specific he said, "I'm not going to say. That would be up to the people to decide."

Sandoval's uncertain stance and the fact that activists such as Nevada AFL-CIO Executive Secretary-Treasurer Danny Thompson are openly looking for ways to circumvent the two-thirds majority requirement the Legislature needs to increase taxes has conservatives nervous and plotting ballot measures of their own.

Robert Uithoven, a Republican lobbyist and board member for the conservative Keystone Group, is working with lobbyist Adam Stryker of Americans For Prosperity on two possible measures.

One would be an amendment to the constitution requiring that when a tax increase question is put on the ballot it would require two-thirds approval from voters to pass. Another proposal would be to eliminate collective bargaining for public employees.

"We can't let Danny Thompson have the ballot to himself" in 2012, said Uithoven, referring to the likelihood that unions and left-leaning groups will put measures before voters.

Even though 15 weeks remain in the 120-day legislative session, hopes already are waning that Democrats and Republicans can agree on a budget plan.

"The Legislature will have failed if we have to enact tax reform by initiative petition, but we may have to," said state Sen. Sheila Leslie, D-Reno.

A recent poll by the Retail Association of Nevada showed respondents favored new taxes over more cuts to education and health care by a margin of 52 percent to 37 percent.

Thompson has been among the most vocal advocates for a tax vote by the people, but he hasn't identified which method he would use to put a question on the ballot.

"We're still talking about all the possibilities," Thompson said of ways to bypass the two-thirds legislative requirement for tax increases, a legislative referendum, a petition to change statutes or a constitutional amendment.

"You could do all three; that's where we're at right now," Thompson said.

No voter measure would absolve legislators and the governor of their constitutional mandate to balance the 2011-13 budget during the current 120-day session; but given current politics in the Legislature, a legislative vote to put a question to the people would be the quickest way to generate money.

Under that scenario, Democrats alone could devise a tax package and, with their existing majority, vote to send the package to the people at the next general election in November 2012.

The appeal of such a plan for Democrats and others seeking to increase taxes would be that it doesn't require a costly signature-gathering effort, like the other two available ballot mechanisms. Nor does it require approval in two consecutive elections, like a constitutional amendment.

"Then you have a tax increase ... and the people decide whether they want to approve the higher tax," said Lorne Malkiewich, director of the Legislative Counsel Bureau.

It offers Sandoval an opportunity to loosen the bonds of his "no new taxes" political promise without having to sign his name to a tax plan before it goes to voters.

"It absolutely would take him off the hook," said conservative political consultant Chuck Muth, who has criticized Sandoval for refusing to sign an anti-tax pledge that would have prohibited standing silent on such a ballot push. "I think he would probably get a pass from most of the general public on that, as long as he doesn't sign it."

But there would be policy and political risks to such a referendum.

For starters, opponents could reverse the results as soon as the next legislative session with a majority vote and a signature or silence from the governor.

That's why Thompson, at this point, would prefer enshrining changes to the tax structure in the state constitution where it couldn't get reversed without two consecutive votes of the people.

"One of the attractive things about putting it into the constitution is the Chamber of Commerce can't come back the next session and change it," Thompson said.

Contact reporter Benjamin Spillman at
bspillman@reviewjournal.com or 702-477-3861.