Unforeseen consequences

In front of a grocery store in Sparks, Ed Jucevic is working as a volunteer, gathering signatures on petitions in the time-tested democratic fashion.

“Well, I was down to the legislature when they were arguing about this,” he says, “and I just saw the travesty down there, and I just think it’s a terrible thing that the state legislature pushed through and the governor signed and the supreme court upheld.”

The “this” he’s referring to is Senate Bill 8 of the second special session of the Nevada Legislature last year. It contains the state school budget and the tax package that pays for state government. Jucevic signed up to circulate petitions for a referendum to place SB 8 on the ballot for a public vote of approval or disapproval.

The measure is being treated as another run of the mill anti-tax ballot measure, but it would fundamentally alter the way the public’s business is done in the legislature, possibly forcing heavy use of special sessions of the legislature and special elections. That’s because this is not an initiative petition but a referendum petition. And in Nevada, referendums have differences from initiatives.

Where initiatives propose new law, referendums put existing law on the ballot for votes of approval or disapproval. And in Nevada, there is an additional feature to the referendum law. Once the public approves of a law, it can’t be changed by the legislature without another public vote. The language is locked into the law books so it can’t easily be changed, or even repealed, by the legislature. And SB 8 contains all or part of nearly 200 Nevada laws that would be locked in if the public approves of this referendum.

If the petition qualifies for the ballot, supporters of the referendum hope the public will overturn SB 8. But if they fail to convince the voters to do that, and the voters approve it instead, the legislature would be prohibited from amending dozens of regularly updated statutes dealing with banking, insurance and many other subjects. All of those laws would be locked in, and every future session of the legislature that wanted to amend or repeal any of the statutes would have to go to the ballot to do it. And the legislature meets only every other year. There is a very real possibility that future legislatures would have to routinely call special elections and meet in special sessions in order to accomplish routine legal changes.

The prospect of this referendum has alarmed many people who otherwise approve of the sponsors’ intent. The Nevada Taxpayers Association has said of this and two other referendum petitions, “The referendums pose as many unintended consequences as the tax legislation they propose to repeal.”

Banking lobbyist John Sande, whose clients were hit with new taxes by SB 8, nevertheless says the referendum Jucevic is circulating, and two other referenda also seeking signatures, offer two unpalatable choices.

“If the vote is ‘no,’ the taxes covered by the referendum go away, meaning the legislature would be required to immediately impose new taxes or face a severe budget crisis. On the other hand, if the vote is ‘yes,’ all of these taxes stay in place until they are repealed or otherwise changed by the voters. In either case, great uncertainty would exist. I certainly believe that the referenda provide poor choices for the electorate.”

Janine Hansen, a Sparks spokesperson for the referendum, says the problem was not anticipated when the petition was being drafted. “I think we actually became aware of it after we filed it.”

She acknowledges that an approval vote could present a risk for the state, but says, “I think it was risky for them to disregard that we’re in a nationwide critical period for the economy and raise taxes nevertheless.”

The Nevada Secretary of State’s office has posted language on its Web page that alerts people to the implications of the referendum: “If a majority of the voters vote for approval of such statute or any part thereof it shall stand as the law and not be amended, annulled, repealed, set aside, or suspended in any way except by the direct vote of the people.”

The referendum petition does not put the entirety of SB 8 up for a vote. But it has what Malkiewich calls “some curious inclusions.” Although the referendum is being circulated by anti-tax/anti-spending activists, it retained in the sections that would be put up for a public vote several sections that cut expenditures by $30 million. (Early fears that the referendum would repeal the state school fund have been alleviated by opinions by legislative lawyers that the school money is excluded from the referendum’s provisions.)

Exactly how many state laws would be locked in is not yet clear. Nevada Legislative Council Bureau director Lorne Malkiewich says his staff has been looking more closely as what would happen if SB 8 was rejected by the voters than if it was approved, since repeal would create a major—and more immediate—crisis. But Malkiewich says he has quickly reviewed the petition with an eye to what happens if the voters approve SB 8.

“It looks to me like about 100 new sections of NRS [Nevada Revised Statutes] would be locked in—since they were added by the bill [SB 8], the entire text would be approved and any amendment would require a vote of the people. In addition, about 90 sections of NRS are amended. Some of these amendments are technical, and amending other parts of those sections would probably not be prohibited, but amending language added by the bill would require a vote.”

Because the sponsors of the petition were not initially aware of the problem with it, many, if not all, of the signature gatherers like Ed Jucevic do not yet know of the problem.