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Nevada Sales Tax Increase for Public Schools Initiative (2022)
| Nevada Sales Tax Increase for Public Schools Initiative | |
|---|---|
 | |
| Election date November 8, 2022 | |
| Topic Taxes | |
| Status Not on the ballot | |
| Type State statute | Origin Citizens |
The Nevada Sales Tax Increase for Public Schools Initiative (S-02-2020) did not appear on the ballot in Nevada as an indirect initiated state statute on November 8, 2022.
A "yes" vote would have supported increasing the state's Local School Support Tax, a sales tax, by 1.5 percentage points from 2.25% to 3.75% with revenue dedicated to public schools. The new total Local School Support Tax would be 4.1%, which includes an additional 0.35% sales tax adopted in 2015. |
A "no" vote would have opposed increasing the state's Local School Support Tax, a sales tax, by 1.5 percentage points from 2.25% to 3.75% with revenue dedicated to public schools. |
During the 2021 legislative session, the state legislature passed a law to allow sponsors to request the removal of initiatives from a ballot after certification. The Clark County Education Association, which sponsored this initiative and a gaming tax initiative, requested to withdraw the initiatives after a legislative compromise was reached. In October 2021, Secretary of State Barbara Cegavske (R) announced that the initiative could not be removed from the ballot after certification and upon the sponsor's request because the new law did not supersede her constitutional mandate to place the initiatives on the ballot after they had qualified. On March 9, 2022, District Court Judge James Wilson ordered Cegavske to withdraw the initiatives and not put them on the 2022 ballot. Click here to read more.[1][2]
Measure design
Local School Support Tax increase
This initiative would have increased the state's Local School Support Tax, a sales tax, by 1.5 percentage points from 2.25% to 3.75% with revenue dedicated to public schools. An additional 0.35% sales and use tax was imposed on June 30, 2015. Currently, the total Local School Support Tax sales and use tax rate is 2.6%. The new total Local School Support Tax would be 4.1%.[3][4][5]
Local School Support Tax revenue
Revenue from the tax is deposited into the Sales and Use Tax Account in the state's general fund. After calculating and collecting the cost of administering the tax, the state controller transfers the amount contributed by each county to the respective county school district fund.[6]
The Local School Support Tax revenue was divided into two categories:
- in-state LSST, which is assessed on taxable in-state retail sales
- out-of-state LSST, which is assessed on out-of-state businesses with retail sales in Nevada
In-state LSST revenue is guaranteed to counties, while out-of-state LSST revenue is not.
In fiscal year 2018, the revenue from the in-state LSST revenue was $1.3 billion and $148.7 million from the out-of-state LSST.[7]
Nevada sales and use tax rates
The minimum statewide sales and use tax rate in Nevada as of January 1, 2020, was 6.85%. This minimum rate is composed of the following component rates:
- 2.0% tax for the state general fund
- 2.6% tax for Local School Support
- 0.5% tax for Basic City-County Relief
- 1.75% tax for Supplemental City-County Relief
Local sales tax rates vary, creating a range of total existing sales tax rates in Nevada from 6.85% to 8.375%. The initiative would increase Nevada's combined statewide sales tax to a range of 8.35% to 9.875%.
Text of measure
Description of effect
The description of effect for the initiative petition was as follows:[5]
| “ | The Nevada Revised Statutes currently set the total Local School Support Tax sales and use tax rates at 2.6%. The Local School Support Tax sales and use tax is one part of Nevada's combined state and local sales tax. This initiative proposes an amendment to the Nevada Revised Statutes to provide for an increase in the total Local School Support Tax sales and use tax rates, which would increase Nevada's combined statewide average sales tax from 8.32% to 9.73%. Proceeds of the Local School Support Tax support Nevada's public schools and tourism and economic development in city and county Tourism Improvement Districts.[8] | ” |
Full text
The full text of the initiative can be read below:[5]
Fiscal impact statement
The full fiscal impact statement prepared by the Fiscal Analysis Division of the Legislative Counsel Bureau on January 31, 2020 can be read here.
Support
Fund Our Schools led the campaign in support of the measure. The Clark County Education Association registered the political action committee.[9]
Supporters
Unions
Arguments
Opposition
Opponents
Officials
- Assembly Speaker Jason Frierson (D)
Unions
Organizations
Arguments
Campaign finance
There is one ballot measure committee, Fund Our Schools, registered in support of the initiative. The committee has reported over $1 million in cash and in-kind contributions.[10]
| Cash Contributions | In-Kind Contributions | Total Contributions | Cash Expenditures | Total Expenditures | |
|---|---|---|---|---|---|
| Support | $1,020,000.00 | $120,976.59 | $1,140,976.59 | $1,000,000.00 | $1,120,976.59 |
| Oppose | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Total | $1,020,000.00 | $120,976.59 | $1,140,976.59 | $1,000,000.00 | $1,120,976.59 |
Support
The following table includes contribution and expenditure totals for the committee in support of the ballot measure.[10]
| Committees in support of Nevada Sales Tax Increase for Public Schools Initiative (2022) | |||||
|---|---|---|---|---|---|
| Committee | Cash Contributions | In-Kind Contributions | Total Contributions | Cash Expenditures | Total Expenditures |
| Fund Our Schools | $1,020,000.00 | $120,976.59 | $1,140,976.59 | $1,000,000.00 | $1,120,976.59 |
| Total | $1,020,000.00 | $120,976.59 | $1,140,976.59 | $1,000,000.00 | $1,120,976.59 |
Donors
The following table shows the top donor to the committee registered in support of the ballot measure.[10]
| Donor | Cash Contributions | In-Kind Contributions | Total Contributions |
|---|---|---|---|
| Clark County Education Association | $1,020,000.00 | $120,976.59 | $1,140,976.59 |
Opposition
If you are aware of any committees registered in opposition to the ballot measure, please send an email with a link to editor@ballotpedia.org.
Methodology
To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.
Background
History of the Local School Support Tax
The Local School Support Tax (LSST) was enacted in 1967 at a rate of 1.5%. In 1979, the rate was decreased to 1.0%. The tax was increased three times since its implementation to the following rates:
- 1.5% in 1981,
- 2.25% in 1991, and
- 2.6% in 2009 (on a temporary basis that was then made permanent in 2015).
The Local School Support Tax revenue was divided into two categories:
- in-state LSST, which is assessed on taxable in-state retail sales
- out-of-state LSST, which is assessed on out-of-state businesses with retail sales in Nevada
In-state LSST revenue is guaranteed to counties, while out-of-state LSST revenue is not.
Of the total in-state LSST revenue collected across the state, 0.75% is deposited into the state's general fund for administration of the tax. The remaining 99.25% of the revenue is allocated to school districts in proportion to the amount collected by the county unless that school district is within the boundaries of a Tourism Improvement District. If a school district is within TID boundaries, an additional 0.75% of the revenue is collected for tax administration.[7]
Out-of-state LSST revenue less the 0.75% collection charge to the general fund is deposited into the Distributive School Account.
In fiscal year 2018, the revenue from the in-state LSST revenue was $1.3 billion and $148.7 million from the out-of-state LSST.[7]
State ballot measures regarding education funding
Ballotpedia has tracked nine statewide ballot measures in Nevada concerning funding for education. Five were defeated, and four were approved.
Nevada Margin Tax for Public Schools Initiative, Question 3 (2014): Would have instituted a two percent margin tax on businesses operating in Nevada that make more than $1 million
Nevada Fund Education First, Question 1 (2006) and Nevada Public School Funding, Question 1 (2004): Amended the Nevada Constitution to require public education be funded before the state legislature funds any other part of the state budget- Nevada Per Pupil Expenditure, Question 2 (2004): Would have required that the annual per-pupil expenditure for Nevada's public elementary and secondary schools equals or exceeds the national average
- Nevada State Debt Limit School Exemption, Question 7 (2002): Would have exempted state contracts for the improvement, acquisition or construction of public elementary and secondary schools from the state debt limit
- Nevada Corporate Tax for Education, Question 6 (1990): Would have imposed a tax on the net profits of every corporation for education purposes
- Nevada State Lands and Revenue for Educational Purposes, Question 2 (1988): Amended the state constitution to clarify which state lands and revenues were used for educational purposes
- Nevada Investment of Revenue for Educational Purposes, Question 4 (1980): Amended the Nevada Constitution to permit the legislature to determine the policies for investment of revenues for educational purposes
- Nevada Public School Financing, Question 3 (1956): Would have created county school funds and provided state and county contributions
- Nevada Amendment on Legislative Funding for Public Schools, Question 5 (1954): Amended the Nevada Constitution to provide the state legislature with the power to support and maintain public schools by direct legislative appropriation from the state's general fund
Path to the ballot
In Nevada, the number of signatures required to qualify an indirect initiated state statute for the ballot is equal to 10 percent of the total votes cast in the most recent general election. Moreover, signature gathering must be distributed equally among each of the state's four congressional districts. The initial filing of an initiated state statute cannot be made before January 1 of the year preceding the next regular legislative session. Signature petitions must be filed with county officials by the second Tuesday in November of an even-numbered year—two years prior to the targeted election date. The final submission of signatures to the secretary of state must be made at least 30 days prior to the start of the next regular legislative session.
The requirements to get an initiated state statute certified for the 2022 ballot:
- Signatures: 97,598 valid signatures were required.
- Deadline: The deadline to submit signatures to county clerks was November 18, 2020.
Signatures are verified by county clerks using a random sampling method if more than 500 signatures were submitted in that county. If enough signatures are submitted and verified, the initiative goes before the legislature. If the legislature approves and the governor signs the measure, there is no election. Otherwise, the initiative goes on the next general election ballot.
Stages of this initiative
- Kenny Belknap filed this initiative with the Nevada Secretary of State on January 15, 2020.[4]
- In February 2020, BizPac, the political action committee of the Las Vegas Chamber of Commerce, challenged the ballot language submitted by initiative petitioners.[11]
- Sponsors of the initiative filed a new version of the initiative on March 24, 2020.[4]
- Proponents reported submitting over 190,000 signatures to county election officials on November 17, 2020.[12]
- On December 15, 2020, county officials verified 137,791 of the 190,192 submitted signatures for the petition, about a 72.4% validity rate. The initiative was considered during the 2021 legislative session, which was set to begin February 1, 2021, and adjourn July 31, 2021.[13]
- The measure was certified for the ballot after the Nevada State Legislature did not choose to vote on the indirect initiative prior to the March 12, 2021 deadline.[14]
- On June 28, 2022, the Nevada Supreme Court ruled to remove the initiative from the ballot.[15]
Attempt to remove the initiative from the ballot
On May 31, 2021, the final day of the 2021 Nevada legislative session, the state legislature passed a bill to increase the mining tax and dedicate revenue to education striking a compromise between legislators, the mining industry, and the largest teachers' union in the state—Clark County Education Association. Assembly Bill 495 (AB 495) reached the two-thirds (66.67%) vote requirement needed to pass the tax with a 28-14 vote in the Nevada State Assembly and a 16-5 vote in the Nevada State Senate. AB 495 maintains the state's net proceeds on minerals tax structure and dedicates the revenue to a new fund for education. In 2019, the net proceeds tax generated $61 million in revenue. Clark County Education Association Executive Director John Vellardita said, "This is the first time that dedicated revenue goes directly into K-12."[16]
Clark County Education Association led two initiative campaigns to increase the state's sales tax and gaming tax to generate revenue for public schools. The initiatives qualified for the ballot on March 12, 2021, when the deadline for the state legislature to pass the initiatives passed without any action by the legislature.
On May 31, the state legislature also amended and passed a bill related to election laws, Assembly Bill 321 (AB 321), to allow initiative campaigns to remove ballot measures from the ballot 90 days before the election at which voters would have decided on the petition.[17]
On July 28, 2021, Nevada Attorney General Aaron Ford (D) issued an opinion in response to a request by Governor Steve Sisolak (D) regarding the constitutionality of AB 321. Ford determined that the law was constitutional and that initiatives may be withdrawn prior to the election.[18]
In October 2021, Secretary of State Barbara Cegavske (R) announced that the Nevada Constitution did not permit her to remove the certified petitions from the ballot despite the 2021 law authorizing petition withdrawal. In a letter explaining her decision, Cegavske wrote, "The use of the word ‘shall’ in ordinary language imposes a mandatory, not discretionary, obligation. Although the Nevada Legislature can adopt statutes ‘for procedures to facilitate the operation’ of the initiative process as provided in [the Nevada Constitution], the affirmative duty imposed by the Nevada Constitution on the Secretary supersedes any statutory enactments by the Nevada Legislature that contradict the affirmative duty."[19]
Lawsuit
On December 29, 2021, Fund Our Schools and Nevadans for Fair Gaming Taxes, the PACs sponsored by the Clark County Education Association, filed a lawsuit against Secretary of State Barbara Cegavske (R) asking the court to allow the initiatives to be removed from the 2022 ballot. The PACs argue that the law passed in 2021 allows them to remove their initiatives from the ballot. The union said in a statement, "CCEA expects that the law will prevail and the Secretary of State will be required to withdraw both initiative petitions."[20]
On March 9, 2022, District Court Judge James Wilson ordered Cegavske to withdraw the initiatives and not put them on the 2022 ballot. Wilson wrote, "Nothing in Article 19 appears to contravene the Legislature’s ability to enact a provision permitting proponents such as Petitioners from deciding to withdraw their initiative measures.”[21]
On March 15, 2022, Jennifer Russell, a spokesperson for Cegavske, said regarding Wilson's ruling, "We’re moving forward with the appeal.”[22]
On June 28, 2022, the Nevada Supreme Court ruled for the petition to be withdrawn from the ballot. The majority ruled that the Constitution allows the Legislature to facilitate the operation of citizen initiatives.
Lawsuit
| Lawsuit overview | |
| Issue: Is the ballot summary misleading? | |
| Court: Carson County District Court | |
| Ruling: Ruled in favor of plaintiffs, requiring petitioners to resubmit ballot summary | |
| Plaintiff(s): BizPAC | Defendant(s): Clark County Education Association |
Source: The Nevada Independent
In February 2020, BizPac, the political action committee of the Las Vegas Chamber of Commerce, challenged the ballot language submitted by initiative petitioners. The plaintiffs argued, "The initiative petition at issue in this case would raise Nevada’s sales tax rate to the highest statewide average sales tax in the nation. Yet the initiative’s description of effect does not tell voters that. It does not even tell voters what the new sales tax rate will be." On March 13, 2020, Judge James T. Russell ruled in favor of the plaintiffs and issued an injunction requiring the initiative petitioners to resubmit the ballot summary to include the proposed total sales tax rate. John Vellardita, the executive director of the Clark County Education Association, responded to the ruling by saying they were open to the required changes. The Chamber of Commerce appealed the decision arguing that the district judge did not have the authority to change the ballot description.[11]
On August 6, 2020, the Nevada Supreme Court upheld the Carson County District Court ruling and affirmed Judge Russell's authority to change the ballot description.[23]
On June 28, 2022, the Nevada Supreme Court ruled for the petition to be withdrawn from the ballot. The majority ruled that the Constitution allows the Legislature to facilitate the operation of citizen initiatives.[15]
See also
External links
Footnotes
- ↑ Las Vegas Review-Journal, "Cegavske won’t allow tax petitions off 2022 ballot," October 11, 2021
- ↑ Las Vegas Review-Journal, "Judge says teachers union can withdraw tax petitions," March 9, 2022
- ↑ KTNV, "Clark County teachers union: Tax initiatives are 'final fix' for classroom funding," February 5, 2020
- ↑ 4.0 4.1 4.2 Nevada Secretary of State, "Notice of Intent to Circulator #S-02-2020," accessed January 15, 2020
- ↑ 5.0 5.1 5.2 Nevada Secretary of State, "Initiative petition #S-02-2020," accessed January 15, 2020
- ↑ Nevada Revised Statutes, "NRS374.785: Sales and Use Tax Account," accessed December 15, 2020
- ↑ 7.0 7.1 7.2 Nevada Current, "Guinn Center Report," accessed December 15, 2020
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ Nevada Secretary of State, "Committee Registration," accessed December 9, 2020
- ↑ 10.0 10.1 10.2 Nevada Secretary of State, "PAC Search," accessed December 10, 2020
- ↑ 11.0 11.1 The Nevada Independent, "Judge blocks teacher union proposal to raise sales tax, says petition needs to be reworded," March 13, 2020
- ↑ The Nevada Independent, "CCEA-backed tax proposals submitted with almost double the number of required signatures to qualify," November 17, 2020
- ↑ The Nevada Independent, "Sales, gaming tax proposals backed by CCEA headed to Legislature after clearing signature thresholds," December 15, 2020
- ↑ The Nevada Independent, "Behind the Bar: Can the CCEA tax petitions be withdrawn? Plus removing barriers for undocumented student scholarships, banning declawing cats and bills to watch this week," March 15, 2021
- ↑ 15.0 15.1 The Nevada Independent, "Supreme Court: Ranked-choice voting can go to ballot, but not tax petitions, vouchers," June 28, 2022
- ↑ AP News, "After decades-long fight, Nevada lawmakers raise mining tax," June 1, 2021
- ↑ Nevada State Legislature, "Assembly Bill 321," accessed June 1, 2021
- ↑ PV Times, "Petitions can be withdrawn before vote, Nevada AG says," July 31, 2021
- ↑ Las Vegas Review-Journal, "Cegavske won’t allow tax petitions off 2022 ballot," October 11, 2021
- ↑ News 3, "Clark County teachers' union files suit to get tax hikes removed from 2022 ballot," December 29, 2021
- ↑ Las Vegas Review-Journal, "Judge says teachers union can withdraw tax petitions," March 9, 2022
- ↑ Las Vegas Review-Journal, "Cegavske will appeal ruling on withdrawal of tax-hike initiatives," March 15, 2022
- ↑ The Nevada Independent, "Supreme Court rejects challenge to teacher union-backed sales tax initiative petition," August 6, 2020
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