Vol. 5, No. 3
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December 1, 2007
Nevada's Online State News Journal
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Gamblers Coming Under
Intense Tax Challenges
General Public In General
Agreement With Concept
During the first week of December another tax initiative petition may emerge on the scene, one that calls for substantial gaming tax increases, to join the initiative being offered by the Nevada State Education Association (NSEA), which is calling for a 9.75 percent gross gaming tax. According to Kermit Waters, a Las Vegas attorney, the gambling palaces of the state should be paying at least 20.2 percent more than their current tax rate of 6.75 percent.
A recent poll commissioned by former Nevada District Judge Don Chairez indicated that the Waters initiative would be well received by the general public, even more well received than the NCES plan. Neither plan is being well received by the gambling industry in the Silver State. The big guns of the Las Vegas Strip have been found giving speeches to anyone that will listen calling for across the board tax increases for all businesses except gaming.
One of those voices belongs to Terry Lanni, chairman and CEO of the MGM Mirage on the Las Vegas Strip. In a speech to the Nevada Development Authority of Las Vegas recently he called the Nevada tax system flawed and believes a "business" tax needs to be in place, one that doesn't include gaming. Lanni has also been quoted as saying that Governor Jim Gibbons should go back on his word and increase taxes.
After years of discussion dealing with tax increases for Nevada's lucrative gaming industry, many have come to the conclusion that as long as the legislature is in office because of gaming campaign contributions, there will be no gambling tax increases. Waters is adamant in that conclusion and a look at any contribution report will verify what is being said. There are vast differences between the NSEA petition, which is currently on the street now, and the Waters petition, which will be available within the next week. The NSEA plan is designed to raise money for use in the education system of the state, and is highly prioritized, but could end up being used for wages and things outside the classroom.
Under the Waters plan, the money would be used for property tax reduction, general fund use, highway construction, renewable energy resources, education including wages, and even water desalinization plants to make fresh water available to the Las Vegas Valley. The tax benefits would be broad based according to Waters. Those that have come out against the teacher's union petition have said it is too narrowly focused. Waters' plan is very broad. There has been little comment on that plan yet mainly because it hasn't been seen in its entirety.
When two petitions are similar as these two are, and if both are accepted at the polls in November 2008, the one with the most votes is the one that takes precedence. The petitions would have to be accepted by voters twice before one or the other would become law. According to the Chairez poll, some 50 percent of the respondents favored the Waters' initiative and 43 percent favored the NSEA proposal. Both could pass. Other polls have been taken and showed reversed favorable ratings.
Within the jurisdictions where casino gambling is legal, Nevada's tax rate is considerably lowest. According to research done by the TNO staff, the 20.2 percent rate suggested by Waters is about the low end of average. Many areas tax casino gambling halls between 20 and 25 percent, often on a sliding scale. In states where casino gambling is legal, the casinos are opened and operated by companies that made their start in Nevada. Now listed as international mega corporations, it is Nevada money that subsidizes the out of state operations.
Both tax initiatives will be vying for signatures over the next several months; both call for extra spending for the state's education system. Nevada education ranks among the worst in the nation, both in educating the children and in spending for the program. It will take 58,628 valid signatures to place the initiatives on the November 2008 ballot. Survivor(s) will be on the 2010 ballot as well.
According to one source within the teacher's union, there are about half the number of signatures needed just within the union in the state. The debate on the two proposals has just begun and we are assured of a lively campaign from supporters of both proposals.
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