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October 1, 2014

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Q+A: Margins tax supporter Dan Hart on why Democrats’ support is wavering

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Steve Marcus

Dan Hart, managing partner of Dan Hart & Associates, listens to keynote speaker Roberto Suro, director of the Tomas Rivera Policy Institute at USC, during the English Mastery for Nevada’s Prosperity education forum at the Stan Fulton Building on UNLV campus Thursday, June 21, 2012.

When it comes to the margins tax, Dan Hart is the voice of the supporters. He’s not alone, but he increasingly finds himself in a lonely position.

Hart’s Education Initiative is working to get the tax passed on the November ballot. The measure would levy a 2 percent tax on businesses with $1 million or more in gross revenues. It is expected to generate about $700 million to support education, according to one study.

But myriad pro-business groups and Republicans have sparred with Hart. Likely supporters – some unions and Democrats – have even tiptoed away from the measure.

Opponents say they support public education but think the tax increase would hurt the economy. Some research suggests that the tax would cost the state 9,000 private-sector jobs and $413 million in employee wages.

But that hasn’t stopped Hart. After several attempts to boost education funding at the Legislature, Hart says the margins tax is the best option. The Las Vegas Sun spoke with Hart about why he thinks the margins tax is the right thing for Nevada now.

Why are Democrats not championing the margins tax? Speaker Marilyn Kirkpatrick declined to do an interview with the Sun on the issue. Assemblywoman and lieutenant governor candidate Lucy Flores said she doesn’t support it.

I don’t think we expected a great deal of support. In fact, our campaign’s foundation is a grassroots one where we talk to friends, colleagues and co-workers about these issues. The goal was never to get more endorsements than our opposition. It was more about being able to communicate effectively. … There are some politicians who are afraid that if they speak out on this issue they will alienate the business community, which provides them a great deal of campaign contributions.

The AFL-CIO and other unions don’t support the initiative. Why are unions backing out of a measure they helped to create?

You’re best to get the answer from them. In my own opinion, there is a lot of backroom politics associated with those kinds of endorsements.

When you go into local schools, what is one thing you consistently see that could be fixed with revenue from the tax?

Overcrowded classrooms. There’s no question that’s the number one issue in the schools today.

Who’s paying for the Stop the Margin Tax campaign’s research and ads?

I don’t know. We’ll see when the report is due. From what I’ve seen listed on their website, I could guess the Chamber of Commerce, the (Nevada) Retail Association, the (Nevada) Resort Association. Those are the people I see.

Aside from the teachers union, who is bankrolling the Education Initiative’s campaign?

It’s by and large the teachers union. We’ve got some individual contributions from people, but they have been dwarfed by the teachers union. … There’s no way that we’re going to have as much money as our opponents have. They have a virtually unlimited budget as far as I can see.

At face value, the tax is a shot in the arm for Nevada’s public education. But it’s also a complex tax issue that will affect the way businesses do their accounting. Are constituents educated enough to vote on this?

I believe so. You have to boil it down to its essence: Do you believe businesses should invest more money in the education system?

Why didn’t the Legislature increase funding for schools?

Any sort of tax package requires two-thirds approval. … If you can point to one thing that is a drawback, that is the biggest problem in getting more revenue to schools from the Legislature.

Do you see any viable alternatives to a tax? It’s been suggested that the Legislature should close loopholes in the entertainment industry or increase the severance tax on mining.

I don’t know how they could get those things through the Legislature. People have been talking about solutions for decades. The K-12 education system has been chronically underfunded for a long time. There are a lot of ideas. Some are Band-Aids, but many are impossible. … The time has come for the voters to express their will on this. That’s why we want the initiative.

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