Initiative obstacles

For Danny Thompson, executive secretary-treasurer of Nevada's AFL-CIO, the debate over a business tax boils down to a simple number: 54.

As in, a 54 percent high school graduation rate from the Clark County School District.

That's the motivation behind a 2 percent business profits tax that Thompson has been working on for months. He says he'll file the measure with the secretary of state by month's end. Businesses will be able to write off their expenses, and the first $500,000 in profit won't be taxed at all. But two percent of the rest would go to education in the state, from K-12 through the university system.

"We are expecting miracles to happen and our economy to diversify into high-tech jobs when we can't even graduate our kids from high school," Thompson says.

Clark County School District officials say their actual graduation rate is much higher. But still, a significant number of students who begin high school in Southern Nevada never finish or fail proficiency tests and get a certificate of attendance instead of a diploma.

Others say money isn't the answer and point to highly funded schools that still perform poorly on standardized tests. For Thompson, those arguments are just excuses in a state that funds education below the national average. "We've never thrown money at that (problem)," he says. "How would we even know?"

But delays and arguments over the wording of the initiative have vexed the effort, which Thompson discussed as far back as the 2011 Legislature. That's when he says he was "extorted" to make concessions on issues such as collective bargaining and prevailing wages in exchange for Republican promises to restore school funding.

"I've been extorted for money for kindergartners," he said.

This week, another problem emerged: The head of the Nevada State Education Association -- which represents K-12 teachers -- said the union wasn't ready to endorse the AFL-CIO initiative. That could be because the measure only directs business taxes to education as a whole, from K-12 through the university and community college system.

"What we've written is what we're going to stand by," Thompson said. "We want money to go to education, all of education, because we've destroyed both (K-12 and universities)."

That wording may be a result of Nevada's infamous single-subject rule, which strictly limits initiative petitions to only one subject. If Thompson tries to allocate some funding to K-12 and some to higher education, he opens himself to legal challenges.

Campaigning for education funding without the support of the state's largest teachers union is politically problematic. But Thompson says he's going forward no matter what. "If teachers don't want to participate in that, that's up to them," he said.

Then there's the rest of the state's special interests, especially the gaming industry. Casinos have long advocated a broad-based tax that would affect all businesses, but they haven't signed onto the AFL-CIO effort. One source said the industry hasn't seen the initiative, but noted that things have changed since it was first proposed. For one, the economy is slowly improving. For another, Gov. Brian Sandoval has announced his budget will call for extending $630 million in taxes that were supposed to expire in 2013. How the measure treats casinos is critical.

(The prospect of an initiative that would increase the gambling tax rate to 9 percent -- proposed by businessman Monte Miller -- is not a factor in the industry's thinking, the source said. Nevertheless, Miller recently allowed that he'd drop his tax measure if the industry helped kill the AFL-CIO idea.)

Thus far, however, the balking of other unions, the lack of endorsement from Las Vegas Boulevard and Miller's initiative maneuverings have not been enough to dissuade Thompson.

"We're going forward," he says, defiantly.

Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at (702) 387-5276 or ssebelius@reviewjournal.com.