Attorneys defend tax extensions before Nevada Supreme Court

CARSON CITY, Nev. (AP) — The Nevada Supreme Court weighed arguments Monday in a lawsuit filed by Republican lawmakers over methods to interpret state legislation that requires revenue-generating proposals to win two-thirds approval within the Legislature to change into legislation.

Since 1996, the Nevada structure has mandated that two-thirds of lawmakers in each chambers should approve any proposal that “creates, generates, or increases any public revenue in any form,” setting a excessive bar for any proposal to boost taxes with out bipartisan assist.

Republican state senators allege that the Legislature’s 2019 choice to increase two expiring income streams — a Department of Motor Vehicles $1 transaction price and a payroll tax — violated the mandate as a result of the extensions handed with easy majorities within the Democratic-controlled Legislature and didn’t obtain two-thirds approval.

The courtroom’s choice might have multi-million-dollar implications for the Legislature, which depends on the taxes and charges in question to stability its finances. The payroll tax is projected to generate roughly $98 million over the subsequent two years. The choice may also sign to lawmakers how they’ll navigate the two-thirds requirement in future income battles, as they weigh taxes and charges wanted to fund state companies.

After a district courtroom decide dominated in favor of the Republicans final September, attorneys for the Legislature — who signify Democratic leaders within the case — appealed the choice to the state Supreme Court.

Legislative Counsel Bureau lawyer Kevin Powers and Nevada Deputy Solicitor General Craig Newby argued on Monday that extending income streams didn’t violate the structure as a result of it didn’t “create, generate or increase” income and due to this fact didn’t require two-thirds approval.

Powers stated the intent of the legislation “was never to hamstring the government and impair existing revenues” and pointed to state courts in Oklahoma and Oregon that had interpreted comparable two-thirds necessities in a slender method.

He and Newby argued legislative leaders had the best to take the recommendation of the Legislative Counsel Bureau, which issued an opinion stating that they may prolong the tax and price with out two-thirds approval.

“There is ambiguity within the term ‘increase.’ And under those circumstances, legislators are entitled to some deference … based on separation of powers,” Newby stated.

Attorney Karen Peterson, representing the Republican lawmakers, disagreed.

“The words used in the constitutional provision are plain. They’re ordinary. They’re easy to understand. And they’re unambiguous,” she stated.

Peterson argued that the Legislative Counsel Bureau had contradicted itself when it instructed the statehouse Democratic leaders that they may prolong the taxes with out two-thirds approval as a result of in prior years comparable extensions — for business license charges, for instance — had required two-thirds approval.

If the courtroom upholds the tax and the price, Peterson stated it might change the character of tax expiration clauses and make it tougher to win two-thirds approval to undertake short-term measures to boost income.

“Going forward, the minority is never going to agree to a sunset provision on a bill and never going to agree to a true reduction in a rate in a bill,” she stated.


Sam Metz is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit nationwide service program that locations journalists in native newsrooms to report on undercovered points.

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