Judicial Activism in Nevada:
State Supreme Court Trumps Will of the People

Welcome to Nevada, where the state's official motto, "All for our country," is giving way to a new slogan —"why bother?" — in the wake of a highly politicized state Supreme Court ruling setting aside a voter-initiated state constitutional amendment. 

The all-too-familiar story of states raising taxes instead of reducing spending in these times of rampant budget shortfalls has taken a bizarre new twist in the land of high stakes and honey.  Here, a Republican governor has teamed up with the teachers union to raise massive new taxes on businesses to fund education.  On July 10, they managed to convince six out of seven judges on the state Supreme Court — all of them Democrats — to order the state legislature to pass the governor's tax hikes by a simple majority vote instead of a constitutionally required two-thirds vote of the legislature. 

While "going for broke" is a common refrain in Nevada, Governor Kenny Guinn has taken that concept to a whole new level, choosing to interpret his recent landslide reelection as a mandate for higher taxes and runaway spending.  Already Guinn's approval rating has plummeted to 43 percent from the 53 percent he held before coming out in favor of new taxes.  His excuse?  "It's for the kids," of course.

Representing the "fastest growing state in the Union" isn't always easy for state lawmakers, who are struggling to come to agreement on an education plan for this year's budget that will keep pace with the constant stream of new students flooding the public school systems.  

The governor is proposing a $1.65 billion school budget — which represents a nearly 35 percent hike in state spending — that will require about $860 million in new taxes to fund.  Standing in his way are legislators of his own party, who are rightly opposed to passing the largest tax increase in state history, and a constitutional amendment passed by 78 and 71 percent of Nevada voters in two successive elections in the 1990s, which requires a two-thirds supermajority vote of the legislature before taxes can be raised. 

On June 2, the regular 120-day session of the Nevada Legislature ended with lawmakers failing to strike a compromise on, or pass by two-thirds vote, a series of tax proposals that would impose a franchise and payroll tax on businesses and that would go after the liquor, tobacco, casino and live entertainment industries for new or higher taxes.  Two special sessions totaling 17 days were then held, to no avail.  It was then that the governor and the state Supreme Court took matters into their own hands.

On July 1, Governor Guinn and the teachers union asked the state's highest court to intervene to resolve the legislative deadlock over taxes and force lawmakers to the negotiating table.  The petitioners made the novel legal argument that a state constitutional amendment — passed by voters during the Great Depression in 1938 — which requires the legislature to fund education, holds a higher priority under the state constitution than the requirement for a two-thirds majority vote on taxes.

As Attorney General Brian Sandoval put it: "We just asked the court to require the legislature to balance the budget and fund education."  Oh, is that all?

In a surprise 6-1 opinion, the court agreed.  Finding an "irreconcilable conflict" between the two constitutional amendments, the court ordered the legislature to raise "sufficient revenues to fund education while maintaining a balanced budget."  It also agreed with an argument raised in an amicus curiae (friend of the court) brief by the teachers union that the legislature can use a simple majority when voting on tax proposals.

As for the one dissent, it was only partial and the Justice — who is also a Democrat — would have given lawmakers until July 28 to reach a consensus before intervening. 

According to the majority opinion:  "If the procedural two-thirds revenue vote requirement in effect denies the public its expectation of access to public education, then the two-thirds requirement must yield to the specific substantive educational right."  In other words, the court ruled that a "substantive" constitutional requirement to fund schools trumped the "procedural" requirement of a supermajority for taxes.  If education is a fundamental right, there's no telling what else in the state constitution the court might negate.

This so-called "substantive" requirement on education states merely that: "The legislature shall provide for a uniform system of common schools, by which a school shall be established and maintained in each school district at least six months of every year... and the legislature may pass such laws as will tend to secure a general attendance of the children in each school district upon said public schools."  That hardly seems like an all-powerful trump card.

Rob Natelson, a University of Montana law professor, points out in the Las Vegas Review-Journal, that if a conflict between two constitutional provisions exists, the provision adopted most recently — in this case the two-thirds requirement, approved by voters in 1996 — normally would take priority over the earlier one. 

The court conveniently chose to ignore that fact.  In essence, the Court manufactured a "dynamic tension" between two separate constitutional provisions to ease tension in the legislature.

The court also chose to ignore other available remedies, such as suggesting the legislature keep at it.  The legislature had only met in special session for a whopping total of 17 days.  If that's the requirement for urgent state Supreme Court intervention, a lot of other state legislatures better get moving — fast!  The threat of school closings enough was likely to ultimately lead to a political solution in this case.  And, while the court was about the business of legislating from the bench, it could have just as easily required the legislature to find ways to reduce spending in other places to fund education.

Vin Suprynowicz, a columnist for the Las Vegas Review-Journal, claims the fix was in all along.  According to Suprynowicz, a retired Nevada judge told him before the court's ruling: "Guinn went to (Justice Bob) Rose and (Justice Miriam) Shearing on the Supreme Court some time ago and got their agreement that they'll impose the tax hikes.  (Justice Deborah) Agosti is wavering, but it'll probably be 6-to-1."  Right he was.

Following the state Supreme Court's ruling, the Assembly came together on July 14 and approved a tax increase of nearly $800 million by a vote of 26-16. 

U.S. Rep. Jim Gibbons (R-NV), the author of the initiative requiring a supermajority, points out in the Las Vegas Review-Journal:  "Many other states have a two-thirds or higher provision in their state laws, just like Nevada did...It strikes me as ironic that those states managed to open their schools, educate their children and hire their teachers without having to trash their respective constitutions."

Constitutional law expert John Eastman of the Claremont Institute, representing fifteen Assembly Republicans, nine GOP state senators and concerned business owners, won a federal temporary restraining order to halt passage of the taxes by less than a two-thirds supermajority.  However, after a hearing on the complaint was held on July 16, where surprisingly all seven of Nevada's federal district judges participated by audio hookup in courtrooms in Reno and Las Vegas, the judges unanimously ruled that they lacked jurisdiction in the matter and dismissed the suit.

The plaintiffs then filed an emergency motion asking the U.S. Court of Appeals for the 9th Circuit — itself no stranger to judicial activism — to grant a preliminary injunction pending appeal.  The court denied the motion but granted the attorneys' request to expedite the appeal process, which can take up to a year.  The plaintiffs threatened to appeal all the way to the U.S. Supreme Court if necessary.  Eastman has also said the group could seek a rehearing from the Nevada Supreme Court, although legal experts say such petitions are very rarely granted.

According to Professor Natelson, the Nevada Supreme Court's ruling fits a disturbing new trend in the courts when confronted with tax matters.  "The courts have been recently either striking down or finding ways around tax expenditure limitations," Natelson told the Las Vegas Review-Journal. 

One state that's hoping that trend continues is California.  In the wake of the Nevada Supreme Court's decision, the state's education chief — with the support of Governor Gray Davis — has asked the state Supreme Court to intervene in a budget stalemate by allowing a simple majority.  At least 12 other states with similar supermajority tax laws in effect may soon follow suit.

Liberals and tax-and-spendthrifts in Nevada and around the country are, of course, claiming victory for schoolchildren everywhere.  What the kids have really learned is that their state constitution isn't worth the paper it's written on.  That's what $800 million and an activist court can buy you in the way of education.

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