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Cy Ryan

Gaming: Teachers would call shots with proposal

10 March 2008

LAS VEGAS, Nevada -- The teachers union's petition for a ballot initiative to raise the tax on big casinos would remove some of the Legislature's powers in deciding school funding.

Even the plan's opponents agree.

But attorneys for the Nevada Resort Association and two former state budget officials suggest that vague wording in the petition could cause havoc — even closing schools for lack of money.

The teachers union says the casinos are desperate to stop the initiative from going to voters and are mincing words — one word in particular.

Here's the background: The Nevada State Education Association filed an initiative petition that would raise the tax on big casinos from 6.75 percent of gross winnings to 9.75 percent. The plan could bring in up to $400 million more a year for increased salaries for teachers and school improvements. The extra money would be sent directly to the school districts.

The petition says the Legislature cannot "consider" the gaming money when building the budget to support the schools. If the Legislature were to consider the extra money, the bill providing financial support for the schools would be voided.

The trouble is the word "consider," the casinos say.

There's no definition of "consider" in the petition, says Todd Bice, an attorney representing the casinos in their lawsuit to stop the initiative petition. The Nevada Supreme Court has defined "consider" to mean thinking about but not taking action, he says.

Here's the scenario painted by Bice and former state budget officials:

If the teachers union is unhappy with the amount budgeted for schools by the Legislature at the end of the June session, the union could claim the lawmakers "considered" the extra money coming from the higher gaming tax. That could tie up the state appropriation in a legal challenge, delaying any state money flowing to the schools, which begin their fiscal year July 1. And it might force the Legislature to pump more money into the education budget to get it passed.

Lynn Warne, president of the union, says the gaming industry's argument shows "the level of desperation" to stop the issue from going before the voters. She called the stance by the casinos "what-if" and "contrived."

The District Court suit by the casinos to stop the circulation of the petition includes a statement by Michael R. Alastuey, a former state deputy budget director and former assistant superintendent for business and finance with the Clark County School District, saying the state appropriation makes up one-third of school district budgets.

"Clearly a loss of one-third of available funding for existing education programs could be devastating to public schools," said Alastuey, now a private consultant in Las Vegas. Schools rely on the state appropriation to honor contracts with teachers and pay for textbooks and supplies.

"Lack of funding would instantly place school districts in a budget deficit on the very first day of school for that fiscal year," Alastuey said.

Judy Sheldrew, a former state budget director and now an attorney in private practice in Douglas County, says the initiative petition contains "vague and obscure language which puts in place the draconian remedy of voiding all appropriations to education" if the Legislature considers the proceeds from the increased gaming tax.

Sheldrew said the word "consider" is not defined. That puts the Legislature "in the awkward position of having to always prove a negative" if someone claims the lawmakers thought about the extra tax proceeds when building the state school budget.

"I view it as a death penalty," she said. That's because it states that if the Legislature were determined to have somehow "considered" the proceeds of the increased gaming tax in determining the appropriation for public education, that appropriation is void, she said.

She called this penalty "unduly harsh and excessive."

Bice, the attorney representing casino companies, said this one sentence in the petition "holds the Legislature hostage to the NSEA's spending priorities." The language in the petition "appears to obligate the Legislature" to put extra money in the budget if teachers aren't satisfied with schools' funding from the state.

Warne, of the teachers union, said it was not the intent of the union to hold up the Legislature in passing budgets for education. The money from the proposed new tax is to supplement what the Legislature appropriates.

She said she did not have a current count on the signatures of registered voters collected on the initiative petition. It must contain 58,628 by May 20 for it to appear on the 2008 election ballot.