Voter rejection of tax increases is ominous sign for efforts to fix state’s tax structure

By David McGrath Schwartz

Thursday, Nov. 8, 2012 | 2 a.m.

Nevada swung heavily for Democrat Barack Obama for the second time in four years this week. The Silver State has an impressive Democratic machine, changing demographics that favor that party and 90,000 more registered party voters than Republicans have.

But voters here also flashed their fiscally conservative, anti-tax tendencies Tuesday, rejecting by wide margins county tax initiatives to raise money for school construction, libraries, public safety and services for seniors.

The message from voters: We may look like a blue state, but we're not Massachusetts.

In Clark County, it was the first time in at least 25 years that a school construction question was shot down — and it wasn’t even close. Voters pummelled the property tax increase 66 percent to 34 percent. Another question, which would have raised money for Henderson libraries, also was rejected.

In Washoe County, voters rejected an increase of the cost to register vehicles to fund public safety and senior services by a 60 percent to 40 percent margin.

In Carson City, voters overwhelmingly rejected a sales tax increase for a new downtown library center.

It’s an ominous sign for those who want to increase funding for schools, public safety and social services and regard the ballot as the best chance of doing it.

The state’s funding for schools is among the lowest in the nation and has been a constant source of tension for Democrats, moderate business leaders and their traditional allies in policy battles in Carson City.

The Clark County school construction vote “broke my heart,” said Billy Vassiliadis, the prominent political consultant who ran the school campaign this year pro bono, as he had other school construction bond measures in the past.

He said the campaign got off to a late start and struggled to raise money.

Polls showed it was “an uphill battle from Day One,” he said.

Voters, in a state where most people are underwater on their homes and there is still highest-in-the-nation unemployment, expressed concern about their own economic plight.

“It’s hard to make the case for a long-term investment in the state when they’re struggling to get by,” Vassiliadis said.

Republican political consultant Robert Uithoven said Nevada, despite the political results in the presidential race, is still a center-right state on fiscal issues. Its libertarian streak in both parties makes voters predisposed to vote against ballot questions, “particularly those asking for more money.”

With the national races, Uithoven said, “there was so much fog from the competitive races, it was difficult for anyone to launch an effective, proactive campaign on behalf of ballot questions.” It was easier, Uithoven opined, for voters to just push no on their ballots.

How anti-tax Nevada voters are is a relevant question heading into the next legislative session.

Last year, Democrats and business leaders, including major interests like gaming and mining, were blocked from raising taxes or changing the state’s tax structure. Instead, they had to settle for extending existing taxes passed in 2009 for another two years.

During the summer of 2011, when frustration about taxes getting through the Legislature was in full bloom, some business leaders and labor officials decided the legislative process was broken. It requires a two-thirds super-majority of lawmakers to pass taxes there. So they decided taxes via the ballot was the only recourse.

But after seeing initial polls, large business interests, including gaming and mining, backed away from the question. The tax initiative now is being carried by the Nevada State Education Association, the teachers union, which has collected tens of thousands of signatures and is fighting legal challenges from conservative business groups.

Democratic lawmakers acknowledged Wednesday that even though they retained control of both the Senate and Assembly, there was little chance a tax increase would pass in 2013. (They wouldn’t say so publicly for fear of alienating their base.)

Republican Gov. Brian Sandoval, who is up for re-election in 2014, has committed to extending existing taxes but won’t support increasing taxes beyond that.

Dan Hart, the political consultant with the state teachers union, said not to read too much into voters' rejection of the Clark County school construction initiative.

“They didn’t run much of a campaign,” he said. “There was not an education process with the voters. They made it about the buildings instead of the kids.”

He said voters are open to the idea of raising money for education, particularly if that tax was on businesses.

“People of Nevada are not real anxious to raise taxes,” he said. “But the voters of Nevada understand the importance of education, not only to the future of our kids but to the economic prosperity to our community.”

But, as one despondent proponent of the school construction question said: “Voters didn’t just say no. They said hell no.”

Cy Ryan contributed to this story.