Vegas Chamber sues to stop sales tax initiative

CARSON CITY — One of Nevada’s largest business organizations is trying to block a sales tax increase proposed by a teachers union that would generate more than $1 billion per year in new state revenue, calling the petition “confusing and misleading.”

The Vegas Chamber on Wednesday filed a lawsuit challenging an initiative petition from the Clark County Education Association that would raise the Local School Support Tax, a component of the state’s sales tax, by 1.5 percentage points from 2.6 percent to 4.1 percent. If the change were approved, the sales tax in Clark County would rise to nearly 10 percent.

The lawsuit is the second in as many days challenging proposals from the teachers union, as the Nevada Resorts Association filed a similar lawsuit Tuesday against the union’s other proposal to increase gaming taxes.

In the chamber’s complaint filed Wednesday in Carson City District Court, the group argues that the petition filed with the secretary of state’s office “fails to adequately inform voters that it will increase the total sales tax, and by how much.”

It also argues that other aspects of the petition’s description are misleading or inaccurate, such as the date it would go into effect.

In a statement, the chamber called the petition “reckless tax policy” and said it does not tell voters “the damage it will have on our economy.”

“Transparency is an essential element to enact sound policies for the future of our state,” the statement said. “The petition does not make clear that it will raise costs for Nevada families on everyday goods such as clothing, shoes, and school supplies, nor does it inform voters that it will have a chilling effect on retail spending by visitors to our region.”

Clark County Education Association Executive Director John Vellardita said Wednesday that he was “not surprised at all” with the lawsuits.

“Clearly this is a concerted effort by business interests and a very self-serving way to protect their interests and to prevent any kind of funding solution for our school system,” Vellardita said.

The chamber also noted that it is against increasing taxes via initiative petition, arguing that the Legislature is a better option “because it allows for open conversation with a wide range of stakeholders to fully consider impacts and consequences.”

Both proposals from the union are statutory ballot initiatives. Supporters have until November to gather about 98,000 signatures to send the measures initially to the Legislature in the 2021 session. If lawmakers reject them or fail to act, they would appear on the state ballot in 2022.

“We have no problem having the voters make that decision if we cannot find a solution to adequately fund our schools in the 2021 sessions,” Vellardita said.

Contact Capital Bureau Chief Colton Lochhead at clochhead@reviewjournal.com. Follow @ColtonLochhead on Twitter.