A strong minority dissent on The Education Initiative

I write to dissent from the majority opinion of my colleagues on the Review-Journal’s editorial board, with respect to The Education Initiative, the 2 percent margin tax that will appear on your November ballot as Question 3.

Sunday’s editorial made the case against The Education Initiative, saying it would be economically destructive across a wide variety of businesses, and that, in fact, “it does guarantee a much worse economy.” In these contentions, I believe the majority is simply wrong.

First, the implication of the editorial — and the objections of the business community, gambling and mining industries that now associate to oppose The Education Initiative — is that but for the flaws identified in the tax, it would have the full-throated support of critics. If only this feature were changed, or that exemption increased, or a particular industry exempted for the good of all, this would pass muster.

But we know from history this is not true. The business community in this state has actively (and successfully) opposed virtually every tax ever suggested on business. This includes a net profits tax proposed by the Nevada State Education Association at the beginning of the last decade, the 2003 gross receipts tax proposed by then-Gov. Kenny Guinn, various incarnations of a business income tax and, now, The Education Initiative.

The bottom line: Business opposes any tax it might be called upon to pay. And in that sense, the business community itself is responsible for the frustration that led the state teachers union to successfully write and qualify The Education Initiative for the ballot.

The Review-Journal, also, is no friend to taxes, although the newspaper’s editorial page has embraced some tax increases in the past, including levies to build schools and roads. But typically, taxes are as popular among the majority as I am at a Chamber of Commerce mixer.

The majority contends The Education Initiative would “hammer employers with the largest tax increase in state history, a levy that instantly would make Nevada a less desirable place to start or expand a business.” But this begs the question: How desirable is Nevada currently? This state is currently tied for third place with the worst unemployment rate in the nation, yet we have no corporate or personal income tax. We just landed two high-tech companies, Apple and Tesla, but we had to waive the taxes the state does impose in order to induce those companies to come. Does this sound to anyone like a robust business environment? Or does it sound like a desperate state feeling the consequences of failing to take the steps necessary to improve its education system and workforce?

The majority notes, correctly, that “there is nothing to stop lawmakers from diverting some existing school funding into mental health care, higher education and social welfare programs.” But with the recession over, lawmakers have no excuse for shortchanging education, especially when presented with a new revenue source. They would surely earn the wrath of teachers, as well as voters who expect this money to go where the initiative says it should go. Would the majority not lend their voices to the chorus of objections should lawmakers steal money from its intended purpose?

The majority further argues that the initiative does not enact reforms, and laments that it removes an incentive for the teachers union to bargain for better pay in trade for policy changes. But the majority knows full well that even if the teachers union wanted reforms (it does not), they could not have been written into this initiative without running afoul of the state’s single-subject rule. That law was not the doing of the union; the blame belongs with Carson City.

Finally, the majority posits that “the margins tax will remove so much capital from the private economy that it simply isn’t possible for the state’s K-12 system to spend it in a way that guarantees improved student performance.” This is speculative, of course, inasmuch as the system has never had an infusion of that much money dedicated to this single purpose. But what we do know is that school funding at current levels has not gotten the job done. Unless the majority is prepared to argue that the teachers of the 36 percent of students who failed to graduate in 2013 are all inadequate — and the majority has not done so — the cause of school failures clearly lies at least in part with funding. The Education Initiative was written simply to fix that particular shortcoming.

Rejecting the initiative may foreclose any real opportunity for reform, perhaps for decades. Therefore, notwithstanding its legitimate flaws, I encourage a “yes” vote on Question 3.

Steve Sebelius is a Las Vegas Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or ssebelius@reviewjournal.com.