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Convention authority reaps $27 million windfall
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LAS VEGAS REVIEW-JOURNAL
Updated: Feb. 15, 2012 | 8:55 a.m.
Here's a problem everyone would love to have: What do you do with an extra $27 million you weren't expecting?
With the economy showing signs of life and tourist volume rising to near pre-recession levels, the Las Vegas Convention and Visitors Authority will have to adjust its budget for fiscal 2012 to account for a windfall.
The authority is financed by a 12 percent to 13 percent tax on every one of the 150,000 rooms in the Las Vegas area. Thus, increases in tourism and room rates mean more money -- a projected $27 million --in the travel board's pockets.
Year-to-date, room tax earnings for the Las Vegas area are up 19.8 percent over last year. The average daily rate, $105, is 10.7 percent higher than last year. From July 1 to Dec. 31, room taxes for fiscal year 2012 were $98.7 million, up from $82.4 million for the same period in fiscal year 2011.
Because of the increases, the Las Vegas Convention and Visitors Authority proposed changes to its budget for fiscal 2012 at the agency's audit committee meeting Tuesday.
Of the expected $27 million windfall, $18.8 million will be divided several ways: $2.7 million, community support; $1 million, marketing; $5 million, advertising; $100,000, general government; and $10 million, transfer to capital fund. The remaining $8.2 million will be saved.
The authority's total budget, which only includes general expenditures and not debt or capital transfers, will go from $188 million to $197 million as a result of the extra money.
Likewise, a rise in room rates means increased tax collection allocations for Clark County and the cities in which the taxes are collected. Through the tax collection allocation, the convention authority may reimburse entities up to 10 percent of the gross revenues to defray collection costs.
Because of the increased average daily room rate, the tax collection allocation approved by the convention authority's board of directors Tuesday totaled $5.18 million, up 21.4 percent from the same quarter last year.
The tax collection allocation for the second quarter fiscal year 2012 will be paid to Clark County, city of Las Vegas, city of North Las Vegas, city of Henderson, Boulder City and city of Mesquite.
Also, the board of directors approved a $2.7 million carpet purchase from Dalton, Ga.,-based O.W. Hospitality and a $260,375 block wall and fencing expenditure from Las Vegas-based Mikon Construction Co. Inc. The carpet cost, $29.26 per square yard, would be split between fiscal years 2012 and 2013. The Las Vegas Convention Center's public areas, lobbies and meeting rooms are slated to receive the new floor covering. The new fencing and wall will be installed in the orange parking lot.
Replacing the 22-year-old carpet garnered the board's unanimous support . In fact, most considered it to be important .
"I'm going to suggest we move that up and make that a priority," said Chuck Bowling, a member of the board of directors and president of Mandalay Bay.
Contact reporter Laura Carroll at lcarroll@reviewjournal.com or 702-380-4588.
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AND TO BE FAIR....Make the room tax a voluntary contribution and let's see how much the LVCVA "EARNS" under that scenario.
I just LOVE how the LVCVA calls their legalized theft of peoples money "room tax earnings". **** WHAT does any group of thieves do when they have a "windfall"?? Well, they spend it and increase their budget!!! That way, when they have a budget "shortfall" in the future, they will be forced to increase the tax, uhhhh, excuse me "earnings".