The Nevada Supreme Court on Thursday ruled that two bills passed by Senate Democrats during the 2019 Legislative Session were unconstitutional because they did not pass by a two-thirds majority.
The dispute, filed by Senate Republicans after the last session, involved the state’s modified business tax, which was set to be reduced on July 1, 2019. Democrats on the final day of the 2019 legislative session repealed a 2015 bill containing the trigger for the payroll tax reduction, a move that was estimated to bring in $98.2 million over a biennium.
A second revenue bill involved extending a Department of Motor Vehicles technology fee’s sunset date from June 30, 2020 to June 30, 2022. That bill was expected to collect an estimated $6.9 million each year of the extension.
Both bills passed the Senate on a party-line vote, 13-8, which is one vote short of a supermajority.
Senate Democrats argued at the time (and in subsequent court hearings) that the bills “did not change—but maintained” existing taxes and therefore were not subject to the Nevada Constitution’s requirement that any bill “which creates, generates, or increases any public revenue in any form” pass both houses of the Legislature by a two-thirds majority.
A district court disagreed and ruled in favor of Senate Republicans. The Nevada Supreme Court affirmed that ruling Thursday.
In its unanimous opinion, the court stated: “Based on the plain language of the supermajority provision, we conclude that it applies to the subject bills because they create, generate, or increase public revenue.”
Thursday’s ruling will impact ongoing budget and revenue discussions in Carson City, where the current legislative session is scheduled to end May 31.
In response to the Supreme Court decision, Senate Majority Leader Nicole Cannizzaro and Assembly Speaker Jason Frierson released a joint statement placing the blame at the feet of Republicans for not supporting their plan for raising funds for education.
“It is disheartening that Nevada families must pay a price for a lawsuit from colleagues who were unwilling to stop playing partisan politics with our children’s education dollars,” read the joint statement.
In their joint statement, Cannizzaro and Frierson called on their colleagues “to work with us on meaningful revenue legislation this session.”
Senate Minority Leader James Settelmeyer on Twitter called the ruling “a victory for all Nevadans.”
“The voters placed the two-third requirement in the constitution, and that right is now guaranteed,” he said in a tweet.
Assembly Republican Leader Dr. Robin Titus also released a brief statement: “The Supreme Court’s decision today is consistent with the intention of the law – to protect citizens from unfair taxation.”