This year there are only three ballot initiative questions facing Nevada voters in the election. Though the language of each question is brief and simple enough as it appears on the ballot, each one is surprisingly complex in the quandary that it poses to voters. We recommend that voters review the materials carefully that are provided on their sample ballots to become educated about the issues at stake. In addition, we have summed up the questions here, some of the positions for and against each question, and have offered our own recommendations for each important issue.
Question 1 proposes to amend the Nevada State Constitution to create a new Court of Appeals in the state. This court would initially consist of three judges; with the ability to add more as needed.
The new appellate court would provide a level between the District Courts and the Nevada Supreme Court. It is hoped that this additional level would relieve pressure on the Nevada Supreme Court which, some say, is currently stretched beyond its ability to dispense justice in a timely manner.
Pro: Proponents of Question 1 point out that Nevada is one of only 10 states that do not have an appellate court. As a result, Nevada’s Supreme Court is one of the busiest in the nation. The Supreme Court’s caseload averaged 333 case for each justice in 2013. Meanwhile, the American Bar Association recommends an annual caseload of no more than 100 cases per justice on such a court. Because of its heavy caseload, appeals to the Nevada Supreme go sometimes as much as two years before a decision is handed down. Many people don’t even bother filing an appeal because the process takes so long. An appellate court would relieve that congestion.
Con: Opponents of the measure say that adding a new appellate court would just create another costly layer in the already bulky court system. It is estimated that the new appellate court would cost around $1.5 million per year. In addition, this is not the first time the amendment has gone to the voters. Similar questions were presented no less than four times in the past 40 years; the most recent in 2010. Each time it has been rejected by the voters.
Our Recommendation: There are better ways to approach the prblem of an over-extended Supreme Court. Our society has become entirely too litigious, with too many attorneys bringing too many frivilous lawsuits; swamping legal resources and grinding down the wheels of justice. That is really at the core of the problem here. Providing an ever increasing stream of new courts and justices will not fix this ever growing appetite for litigation. Throwing more money at the problem won’t fix it.
What is needed in the state is meaningful tort reform to discourage frivolous lawsuits and hold attorneys accountable and financially liable. Perhaps that is what the voters of Nevada have been trying to say to the legislature for the past 40 years in repeatedly deciding NO on this amendment.
Meaningful tort reform is admittedly the harder path for the legislature. But it would bring the best outcome for the taxpayers of the state; much better than a vastly more expensive appellate court.
We would recommend that Nevada’s voters hang tough on this issue yet again and vote NO on Question 1.
Question 2: Mining has been a vital industry to Nevada from the very beginning. Since its admission into the union in 1864, Nevada has had special provisions in its constitution to support the mining industry. Question 2 asks voters to reconsider that special status.
In itself, Question 2 does not increase taxes on mining. Currently the state constitution places a cap of 5% on mining taxes. The ballot question would merely remove that cap, allowing the state legislature to make changes to the mining tax structure in the future as it is deemed necessary.
Pro: Supporters of Question 2 say that, though the mining industry brings great benefits to the state, an update to the tax structure for mining is far overdue.
Nevada is the number 1 gold producer in the United States, and one of the top five in the world. In 2012, the industry took more than $9 billion in gold out of Nevada. This was mainly done, not by Nevada companies, but by international mega-corporations.
The net proceeds of minerals tax brought into the state coffers was only $236 million in fiscal year 2012-2013, according to state data. Question 2 proponents claim that this rate is far out of balance compared to much higher mining taxes levied in the rest of the world.
Given all of this; and considering the high environmental costs associated with the mining industry, which the state and people of Nevada have to deal with; Question 2 supporters say that it is high time to re-evaluate the preferred status given to mining companies.
Con: Opponents point out the vital importance of mining in the Nevada economy. They insist that, given that importance, the state shouldn’t mess with the mining tax structure which has been in place for so long. The industry deserves to keep its preferred status, they say.
The mining industry pays hundreds of millions of dollars in taxes, provides high-paying jobs and supports communities in countless ways. In addition to the 5% net proceeds tax currently in place, mining pays fees and other taxes the same as any other business in the state. Mining also provides more than 12,000 jobs in the state with average wages of over $87,000 per year. These employees go on to pay taxes, support local businesses and help communities to thrive. Changing the mining tax could have an effect on these things.
Opponents also say that Question 2 is unnecessary. The legislature already has power to raise revenues by increasing fees or taxes which would apply to all other business as well as mining.
Our Recommendation: Ultimately, it is the job of the state legislature to set tax rates on industries like mining. Those rates should reflect comparable and customary rates and should be fair to both the industry and to the taxpayers of the state.
Where we have a problem is when long-held provisions tie the hands of the legislature and make it difficult to do that job of setting appropriate tax rates. The current caps on mining taxes limit what the legislature can do. It makes it difficult for the state to stay up to date on its mining tax structure.
If Question 2 passes, raising the mining tax would still require 2/3 support in both houses of the legislature to pass; just the same as raising taxes against any other industry. The legislature has flexibility in determining tax rates for gaming in the state; and every other business and industry. It should have the same flexibility for mining.
We recommend a YES vote on Question 2.
Question 3: This is the big one on the ballot this election. It’s what everyone is talking about. It has been widely debated and heavily campaigned, with millions in campaign dollars being spent on both sides.
Indeed the stakes are high. Question 2 would impose a 2 percent tax on business entities operating in Nevada with gross revenues in excess of $1 million. Businesses with revenue less than $1 million would be exempt from the tax. The proceeds of the tax would be used specifically to fund K-12 public schools in the state.
Pro: Proponents point to the abysmal state of K-12 education in Nevada. Nevada public education falls near the bottom of most education studies and ratings. Supporters of Question 3 say that more funding is needed to improve those ratings. Question 3 would provide the funding for smaller class sizes, textbooks, technology, classroom materials and academic programs. These things would result in greater student success and higher graduate rates, say Question 3 supporters.
Nevada is one of only three states that do not require big companies to pay corporate income taxes. Many out-of-state corporations doing business in Nevada pay corporate taxes in other states but not on income made in Nevada. Supporters say that Question 3 would solve some of the state’s education woes by making large corporations pay their fair share.
Con: Opponents say that passing Question 3 would hurt small business in the state, causing the loss of thousands of jobs and an increase in expenses for households and families.
The proposed tax would be levied not on profits but on gross revenues of a business. That means that businesses would have to pay the tax even if they realized no real profits at all for the year. Thus, the tax, being billed as only 2 percent, could actually balloon to the equivalent of nearly 15 percent for many businesses, opponents say.
What’s more, the margins tax targets businesses that are the largest employers in the state. Placing a tax on gross revenues would cause the loss of thousands of existing jobs and make it extremely hard to attract new business to Nevada; all this just as the Nevada economy is starting to recover again from an extended slow-down and period of high unemployment.
Finally, opponents say that the measure is not guaranteed to actually help education. Once the new funds from the margins tax start rolling in, there is nothing preventing the legislature from diverting currently existing education funding sources to other uses. Thus it’s quite possible that the revenues from the tax won’t actually make it to the classroom, opponents say.
Our Recommendation: Question 3 would damage the Nevada economy and be a disaster for Nevada businesses. Proponents are insisting that the $1 million threshold protects small businesses and only affects those “evil” large corporations. But $1 million in gross revenues is not a whole lot in business. Indeed it pulls in many much smaller businesses as well. Given that threshhold, the tax might very well affect many small businesses right here on the main street of Overton, as well as on the main streets of many other small towns in the state. The fact is, this measure would hurt small business most of all.
While the adequate funding of education is a worthy and important goal, Question 3 is the wrong way to go about it. Question 3 is an extremely regressive tax. It would hurt the little guys the most. It would damage the Nevada economy and its citizens just when an economic recovery is starting to take hold in the state. And, in the end, the real benefits to K-12 education are quite arguable to say the least.
We recommend a NO vote on Question 3.
