Initiative games

Advocates of tax restraint and limited government growth have precious few allies among Nevada's elected officials. That's why, time and again, the state's fiscal conservatives bring their ideas to the public in the form of an initiative petition.

Big-government boosters howl in horror each time such a signature-collecting effort is announced, warning that the proposal will lead to "Draconian budget cuts" and "reductions in government services." Then, fearing the possibility that voters might see through these exaggerations and slow the flow of tax revenue into the public sector, they sue to stop it from ever reaching the ballot.

The union-backed group Nevadans for Nevada, which successfully blocked a popular vote on the Tax and Spending Control initiative in 2006, has filed a lawsuit challenging the constitutionality of the Property Tax Restraint Initiative. The proposed constitutional amendment, filed with the secretary of state on Sept. 4, would set annual tax bills at 1 percent of the purchase price and limit yearly increases to 2 percent per year, like California's Proposition 13, passed by that state's voters in 1978.

Current Nevada law limits property tax increases on owner-occupied homes to 3 percent per year. All other types of property are subject to an 8 percent annual cap.

It's unlikely that the Property Tax Restraint Initiative would result in property tax cuts for Nevadans -- the intent behind the effort, put forth by former Assemblywoman Sharron Angle of Reno, is to better stabilize the tax bills of all property owners. Doing so would inevitably cut into the growth of property tax revenues.

That's a scary prospect for unionized public employees, who enjoy healthy annual salary increases and generous retirement plans at the private sector's expense. Their compensation, higher than any other employment sector in Nevada, is unsustainable without robust revenue growth. As with TASC, the Property Tax Restraint Initiative constitutes a threat to their unfairly high standard of living, and so the ruling class has decided it must be crushed.

Not so fast, says Danny Thompson, head of the state AFL-CIO and chairman of Nevadans for Nevada. This lawsuit is not about protecting government employee wages and benefits. Mr. Thompson says it's about protecting the rights of taxpayers.

Current state statute, passed in 2005, allows present, lower property valuations to carry over to new owners. But Ms. Angle's petition would reset the taxable value of property whenever it is sold. Such a provision would likely leave newcomers to any street paying significantly more in property taxes than neighboring properties that haven't been sold in a decade or more. And that would violate the state constitution's mandate that taxes be "uniform and equal," Mr. Thompson warns.

"Our motivation for doing it (filing the lawsuit) is they would put people in a position where they will pay more in taxes in some cases," Mr. Thompson said.

This is a legitimate policy concern, and without question will cause some registered voters to balk at signing Ms. Angle's petition. Many Nevadans won't want to face the prospect of doubling or tripling their property tax bill if they decide to sell their home and purchase a slightly larger one, or purchase a small business. For landowners committed to staying put, it might not be a bad deal. Whether it's good policy for the state is a debate for another day.

Mr. Thompson's assertion that Nevadans for Nevada is worried that property owners "will pay more in taxes in some cases" is the funniest thing we've heard in ages. The group's lawsuit was filed for no other reason than to keep tax money pouring into the pockets of unionized public employees.

If the AFL-CIO and Nevadans for Nevada were terribly concerned about "uniform and equal" property taxes, why didn't they sue to block enactment of the 2005 law, which creates a split roll for owner-occupied homes, investment properties and businesses? And their concern that a proposed constitutional amendment would violate the constitution? That's addressed by basic civics classes: amendments, by their very definition, change the constitution.

Besides, the U.S. Supreme Court has already ruled that California's Proposition 13 does not violate the U.S. Constitution's Equal Protection Clause.

Mr. Thompson has also said the petition should be tossed because it's misleading. That's the pot calling the kettle black.