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October 1, 2014

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Fight over margins tax ballot initiative brewing at grassroots level

Advocates hoping to pass a 2 percent business revenue tax on the 2014 ballot have a new strategy: start small.

Grassroots groups associated with the Democratic Party in Nevada are beginning to endorse the Education Initiative, a proposal that would levy a 2 percent revenue tax on businesses annually grossing more than $1 million after payroll costs or the costs of goods sold.

“We’re building this from the bottom up,” said Dan Hart, political consultant for the Education Initiative PAC, the group working to pass the tax. “We’re likely to be facing opponents who are extremely well funded and (are) willing to spend a lot of money. We can and will out-organize them.”

The Nevada State Education Association, the state teachers’ union and its allies have backed the tax as a means to inject approximately $400 million a year into the state’s education system, according to union financial estimates.

Earlier this summer, they were the sole backers of the tax; an array of business groups stood poised to dedicate millions of dollars to defeat their initiative.

Now, left-leaning groups are beginning to endorse the proposal and join the teachers’ union in supporting the tax. The largest group outside of the teachers’ union to endorse the tax is the Clark County Democratic Party, which unanimously voted to endorse the proposal at a meeting of the county party’s central committee Thursday night.

Hart has been making the rounds with Democrats throughout the Las Vegas Valley.

“It is part of an outreach campaign that we’re engaged in,” he said.

He said he’s expecting opponents in the business community to spend millions against the tax, so he’s out early recruiting a grassroots volunteer base who can sell the message that the tax is about supporting schools, not about taxing businesses.

It’s a tactic they hope will eventually influence elected officials facing re-election.

“If people really understand and realize the importance of education to our community at the grassroots level, it can create that groundswell,” said Ed Long, president of the Henderson Democratic Club, an affiliate of the Clark County Democratic Party. “The politicians will feel a lot more comfortable and create a wave.”

The club endorsed the tax measure earlier this month.

The Latino Democratic Caucus, another county party affiliate, also unanimously pledged its support for the tax this month.

“Once the community gets behind this, then our legislators will get behind it,” said Jose Solorio, president of the Latino Democratic Caucus and a former Clark County school board member.

To date, most Democratic elected officials have shied away from endorsing the ballot measure.

“We’re kind of taking a wait and see on the information,” said Senate Majority Leader Mo Denis, D-Las Vegas, who was a major advocate for more education funding through a payroll tax hike he proposed during the legislative session earlier this year. “The details are what we have to look at. We really need to dig down and see what it would do.”

Legislators declined to vote on the so-called margins tax at the Legislature this year, passing the buck to voters to decide on the matter in November, 2014.

Traditional Democratic allies like the AFL-CIO and its powerful member organizations like the Culinary Local 226 union, which represents workers at most Strip casinos, have not yet endorsed the proposal.

The AFL-CIO originally had battled to get the proposal on the ballot but then cooled off on the measure, saying it “needs to be studied for its impact on our members and its impact on our jobs in our community.”

Meanwhile, opponents of the tax are also organizing under an umbrella group called the Committee to Protect Nevada Jobs

Bryan Wachter, with the Retail Association of Nevada, is the spokesman for that committee. He said he’s happy with their fundraising efforts so far, but right now he’s focused on doing exactly what Hart is doing.

“They’re doing the same thing we’re doing, which is meeting with folks and drumming up interest,” he said. “It’s a long ways ’til November (2014).”

Another group, the Margin Tax Initiative Research Committee, filed papers with the Secretary of State earlier this week. That group includes representatives from the Las Vegas Metropolitan Chamber of Commerce, the Retail Association of Nevada, the Nevada Mining Association, and the Nevada Resort Association, which represents Strip hotel casinos.

Wachter said that group will conduct research about the tax.

“It’s just a matter of being able to get our information collated and that’s what the research committee is going to do,” he said.

But those four groups alone could outspend the state teachers’ union, which earlier this summer pledged $1 million to the campaign to persuade voters to support the tax.

Representatives from the Assembly and Senate Democratic caucuses say that they won’t be endorsing the tax en masse any time soon, if at all.

Few individual legislators replied to a Sun email sent to the state’s 63 legislators asking them if they support or oppose the tax.

Given the high hurdle of reaching the two-thirds majority vote requirement to pass a tax at the Nevada Legislature, Sen. Tick Segerblom, D-Las Vegas, said the people of Nevada are the only ones who can decide to pass a tax that could inject more money into the education system. The Legislature has repeatedly failed to pass such a tax.

“Without a tax increase dedicated to education there will be not be improvement in Nevada's education system,” Segerblom said.

That leaves outside groups like Progress Now Nevada and the Progressive Leadership Alliance of Nevada to push for the tax from a grassroots level. The board of Progress Now Nevada Action, the political action organization of Progress Now Nevada, voted to endorse the tax in August.

The majority of PLAN’s affiliated organizations voted to support the tax, although large member organizations like the Culinary Local 226 union have not independently endorsed it.

Laura Martin, the spokeswoman for PLAN, is skeptical about whether elected Democrats will ever endorse the tax.

They had their chance to support it in a vote at the Legislature, and they did nothing but punt the measure to voters, she said.

“As far as the elected officials go, they’ve already shown that they don’t support it by not doing anything about it,” Martin said. “They missed the chance to do that earlier this year. They have another chance in 2014.”

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