Posts Tagged ‘Lynn Warne’

Margin Tax Initiative Petition To Fund Education Awaits Ruling By Carson City District Judge

By Sean Whaley | 5:35 pm July 31st, 2012

CARSON CITY – Carson City District Judge James Wilson heard arguments today but delayed ruling on whether an initiative petition filed by the state teachers association to raise an estimated $800 million a year for education via a new margin tax is too flawed to go forward.

Wilson said after a brief hearing that he will issue a decision “as soon as possible.”

Attorney Josh Hicks, representing the Committee to Protect Nevada Jobs, argued that the petition filed with the Secretary of State’s office by the Nevada State Education Association violated a rule for such measures requiring they deal with a single subject.

He also argued that the 200-word description of effect for the complex 26-page proposed margin tax on larger Nevada businesses was misleading. Nevada residents who would be asked to sign the petition to take the proposal to the Legislature in 2013 need to know what the measure would do, Hicks said.

Carson City District Judge James Wilson.

The description of effect does not, for example, include mention that the names of the businesses paying the tax, and the amount they would pay, would have to be published on a website by the Department of Taxation for the public to review, a change to current confidentiality statutes, he said.

This provision generated a number of questions from Wilson directed to James Penrose, the attorney defending the petition on behalf of the teachers association.

Hicks also argued that the proposal violates a constitutional requirement that it provide enough revenue to pay for its implementation. A fiscal note for the proposal indicates that not enough money has been identified to pay for the costs to the Tax Department to implement the new levy, he said.

Hicks questioned whether what the teachers association calls the “Education Initiative” is misleading because there is no guarantee that funding for public education would increase if it became law.

Penrose argued that the petition is straight forward, seeking to impose a new tax to raise money for public education. It would levy a 2 percent tax on companies making gross revenues in excess of $1 million a year. The money would be deposited in the Distributive School Account to fund public education, he said.

Penrose said the description of effect does not have to be perfect, but has to give those who might sign the petition a clear idea of its intent, which the proposal does.

Lynn Warne, president of the NSEA, said after the hearing that the group has yet to begin gathering signatures to qualify the measure to take to the Legislature. The group has until Nov. 13 to collect can collect 72,352 signatures to take the measure to lawmakers. The Legislature would then have 40 days to approve the proposal or it would go to the voters in 2014.

Warne said the association will wait until Wilson’s ruling to decide whether to begin collecting the needed signatures, even though any decision could be appealed to the Nevada Supreme Court.

If elements of the petition are rejected by Wilson, the petition can be revised and re-filed so that the signature gathering effort can begin, she said.

Gary Peck, executive director of the association, said the group expects its effort to be successful.

“I think it would be fair to say that we remain confident that, at the end of the day, the initiative will withstand a legal challenge,” he said. “We remain confident that it will qualify because the residents of the state of Nevada understand how inadequate the funding for K-12 education is, and they will be persuaded that this is a way to fix the problem.”

Hicks said he could not predict what Wilson’s ruling will say.

“The judge gave it a full, fair hearing and that’s all anyone can ask for,” he said.


Audio clip:

Gary Peck, executive director of the teachers association, says the effort to impose the tax will be successful and supported by Nevada residents:

073112Peck :29 fix the problem.”


Nevada Taxpayer’s Association Cites Concerns With Teachers’ Margin Tax Petition

By Sean Whaley | 3:31 pm June 18th, 2012

CARSON CITY – The Nevada Taxpayer’s Association has identified several concerns with an initiative petition to impose a margin tax on Nevada businesses filed by the state teachers union, including the title.

The “Education Initiative” outlining how the 2 percent tax on companies making more than $1 million in gross revenues should more properly be called the “Margin Tax Initiative”, the association said in an email today. The $800 million a year in revenue estimated to be raised from the proposed tax is not directed specifically to public education, the NTA said.

The money would go to the state general fund instead.

But that is just the beginning of the litany of concerns identified by the NTA.

Photo courtesy of the National Archives and Records Administration via Wikimedia Commons.

“Proponents claim the $1 million exemption protects small businesses,” the NTA said in its assessment of the proposal. “Not true. The calculation of total revenue pursuant to the provisions of the initiative will put the income of many small businesses over $1 million. Those small businesses will include many franchise operators with a single location, most independently owned gas stations, many medical clinics, ranches and farms and a host of other businesses. In reality it is only the tiny business that will not be captured.”

The concerns are coming forward just as a poll is showing support for the proposal by a nearly 2-to-1 margin among those voters queried. The results of the poll, conducted at the end of May, were reported today by Las Vegas Sun columnist Jon Ralston.

Carole Vilardo, president of the NTA, said the association will be reporting even more concerns as businesses begin to analyze the consequences of the tax should it become law. Its first briefing on the proposed tax was issued earlier this month.

The proposal sounds good to voters because it is a tax on business and not on their own pocketbooks, she said.

Tax proponents only want more revenue and they, “don’t care squat about how you get it,” Vilardo said. “They don’t care if it works or not.”

The taxation proposal is modeled on the Texas margin tax and relies also on Assembly Bill 582 of the 2011 session of the Nevada Legislature, which Vilardo said was never fully vetted by lawmakers.

Nevada businesses are already struggling, and face increased fees and future unemployment insurance tax hikes to repay the money borrowed from the federal government to pay unemployment benefits, she said.

The petition was filed with the Secretary of State’s office on June 6 by the Nevada State Education Association with the support of the Nevada State AFL-CIO.

If the groups can collect 72,352 signatures by Nov. 13 it will go to the 2013 Legislature for review. If the Legislature does not approve the proposal it will go to voters in 2014.

Lynn Warne, president of the NSEA, said when the petition was filed that the intent is to provide more funding for K-12 education.

“We believe that they (voters) are looking for a fair, broad-based tax but they are looking for funding for schools, for kids, to make sure Nevada moves off the bottom in per pupil expenditures,” she said.

The NTA also notes that the tax is not based on the ability to pay.

“As a result many small businesses will find their profits wiped out,” the assessment said. “For any businesses hurt by this economy and struggling to keep their doors open, this tax may prove to be the proverbial straw that broke the camel’s back.”

The Texas margin tax also created increases in the cost of compliance for businesses, the NTA said.

“Nevada businesses will face these same increases in addition to paying the tax at a much higher rate,” the NTA said. “This tax is a full employment bill for accountants and tax attorneys.”

Warne said she fully expects a legal challenge to be filed opposing the petition in an effort to derail the signature collection effort.


Audio clips:

NTA President Carole Vilardo says the tax proposal appeals to voters because it does not affect them directly:

061812Vilardo1 :33 works or not.”

Vilardo says Nevada businesses are already facing multiple challenges:

061812Vilardo2 :31 for employment security.”


Business Margin Tax Initiative Petition Filed, Legal Challenge Expected

By Sean Whaley | 12:44 pm June 6th, 2012

CARSON CITY – A business margin tax initiative petition filed with the Secretary of State’s office won’t see signature gathering efforts start right away because a legal challenge to the proposal is expected, a teachers union official said today.

But Lynn Warne, president of the Nevada State Education Association, who filed the petition to establish the tax that would bring in $800 million a year from large Nevada corporations, said it is expected to withstand any legal scrutiny. The language has been vetted by several attorneys, including association attorney James Penrose, she said.

“We usually go through about a month looking for any kind of legal challenges,” Warne said. “We expect that there will be some coming.”

NSEA President Lynn Warne answers questions about the margin tax proposal filed today. / Photo: Nevada News Bureau.

Even with delays due to legal efforts to derail the proposal, there will be no difficulty in collecting more than enough signatures from registered voters by November to put the proposal to the Legislature in 2013, she said. The Legislature has 40 days to approve the proposal or it goes to the voters in 2014.

Called the “Education Initiative”, the actual language implementing the 2 percent tax on companies making gross revenues in excess of $1 million a year is 32 pages long.

Penrose said the mining industry would be required to pay the tax the same as other businesses. The gaming industry would pay the tax on non-gaming revenue, such as hotel operations.

Warne said a number of groups have expressed interest in joining with the teachers and the AFL-CIO in supporting the measure, which she said will created a broad-based business tax that will ensure public education won’t face further cuts to programs or require teacher layoffs.

While complex, Warne said she expects voters will support the margin tax proposal in 2014 should the Legislature fail to act.

“We believe that they (voters) are looking for a fair, broad-based tax but they are looking for funding for schools, for kids, to make sure Nevada moves off the bottom in per pupil expenditures,” she said.

If the tax proposal is approved by the Legislature in 2013, the liability would begin in 2014 with the first collection due in January 2015. If approved by voters in November 2014, the liability would begin in 2015 with the first collection due in January 2016.

Warne said the proposal relies on the Texas margin tax, and Assembly Bill 582 of the 2011 Nevada legislative session, for its implementation.

If implemented, the tax revenue would flow to the state general fund and not be earmarked for public education, but Warne said the revenue pie would expand and provide more money for the public schools.

“The Legislature will fund education as they deem appropriate,” she said. “There will just be more revenue for them to be able to appropriate to education. We hope they do so properly.”

While the language has just now been filed explaining how the tax would be levied, the proposal has already come in for  criticism from a number of sources.

Gov. Brian Sandoval said he opposes the tax and said tax policy discussions need to be considered by the Legislature, not at the ballot box.

Las Vegas businessman Monte Miller, who earlier this year proposed petitions to raise both the gaming and mining tax, called the margin tax a “destructive, terribly complex tax.” Miller had filed his proposals as a way to offer voters alternatives to a margin tax, which he anticipated would be sought by teachers, He dropped his efforts in April.

The Nevada Policy Research Institute has also criticized the tax. Geoffrey Lawrence, deputy policy director at NPRI, said in a statement issued Tuesday that a margins tax would be a “disaster” for Nevadans.


Audio clips:

NSEA President Lynn Warne says she believes voters will support the tax if asked to do so:

060612Warne1 :25 per pupil expenditures.”

Warne says the money will go to the general fund but that public education should benefit:

060612Warne2 :09 do so properly.”

Warne says the association will wait at least 30 days to collect signatures because legal challenges are expected:

060612Warne3 :11 are seen through.”


Proposal Seeking A Texas-Style Business Margins Tax To Support Public Education To Be Filed Wednesday

By Sean Whaley | 1:19 pm June 5th, 2012

CARSON CITY – A proposal seeking to implement a Texas-style business margins tax in Nevada to support public education will be filed with the Secretary of State’s office on Wednesday.

Supported by the state teachers union and the AFL-CIO, if the groups can collect 72,352 signatures by November 13, the issue of taxes will be dumped squarely in the laps of state lawmakers in 2013.

Graphic from Free Software Foundation via Wikimedia Commons.

News that the groups were finally ready to file the initiative petition was first tweeted by Las Vegas Sun columnist Jon Ralston.

“Basically it is a 2 percent tax on a business entity’s taxable margin for that year,” said Lynn Warne, president of the Nevada State Education Association.

The threshold for paying the tax is a business making more than $1 million in gross revenue. This threshold is expected to protect small businesses from having to pay the tax, she said.

The proposed tax is expected to bring in about $800 million a year, Warne said.

If enough signatures are collected from Nevada registered voters by the deadline, the 2013 Legislature would have 40 days to approve the proposal or it would go to the voters in 2014. Lawmakers could also offer a competing tax proposal to appear on the ballot, but a two-thirds vote would be required to move any competing tax measure forward in the Legislature.

Warne said she does not foresee any difficulty in gathering the necessary signatures.

“We’re confident that we will not only collect the necessary signatures, which is 73,000, but we will collect significantly more than that and have those ready to be filed with the state by the beginning of November,” she said.

Gov. Brian Sandoval today reiterated his opposition to such a tax proposal. Sandoval earlier this year said he will extend a collection of taxes set to expire on June 30, 2013, into the new budget to ensure there are no further cuts to education.

Supporters of the margins tax say that move doesn’t go far enough, however.

“That’s fine; it’s not adequate though for funding schools and other essential services in the state,” Warne said. “You’ve seen the tremendous battles that have gone on in school districts with regards to funding and how to make ends meet. We just can’t continue to cut funds to education and expect the quality to improve.”

The proposal will provide consistent and predictable funds for education, eliminating the need for layoffs or program cuts, she said.

The association would also work to eliminating the current payroll-based business tax, called the Modified Business Tax, Warne said. But there would need to be a transition period so as not to create a hole in the budget, she said.

Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, said in a statement that a margins tax would be a “disaster” for Nevadans.

“Despite misleading rhetoric from the Left disparaging ‘corporate greed,’ all taxes are ultimately paid by individuals and families,” he said. “A business margin tax will only further squeeze struggling private firms, dampening their ability to hire and suppressing growth in wages. The pain will be felt by families across Nevada.”

Lawrence said economists from across the political spectrum consider a margins tax to be one of the most economically destructive tax instruments available.

“With Nevada’s adult unemployment at 12 percent and youth unemployment rate at 28.8 percent, a margins tax is a recipe for prolonged economic depression in the Silver State,” he said.


Audio clips:

Lynn Warne says there will be no difficulty in collecting the needed signatures:

060512Warne111 :16 beginning of November.”

Warne says Gov. Sandoval’s plan to extend a package of sunsetting taxes into the next budget is inadequate:

060512Warne22 :20 quality to improve.”