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Dec. 13, 2007
Copyright © Las Vegas Review-Journal

Petition: Triple gaming taxes

Other states collect higher casino levies

By ED VOGEL and LAWRENCE MOWER
REVIEW-JOURNAL
ON THE WEB:
The three petitions that would increase Nevada's casino tax can be found here.

HOW GAMING LEVIES WOULD BE SPENT

The "It's Time for Gaming's Fair Share" petitions would raise Nevada's gaming tax rate to 20.2 percent, generating about $2 billion more a year.

Under one petition, revenue would be distributed as follows:

• 35 percent for road construction, highway improvements and transportation infrastructure.

• 25 percent to increase the salaries of public school teachers.

• 25 percent to construct aqueducts, desalinate water and transport water to the state from out-of-state sources. Also to develop solar and geothermal energy and reduce electricity costs.

• 10 percent to the Nevada Supreme Court's administrative office for salary increases for justices, district judges, and staff expenses for court office and staff.

• 5 percent for Millennium Scholarships at the University of Nevada, Las Vegas, and the University of Nevada, Reno.

Under the other petition, revenue would be spent as follows:

• An estimated $1 billion to eliminate the property taxes homeowners now pay on their primary residences.

• Remaining revenue would be spent as specified under the first petition, although only about half as much money would be available.

REVIEW-JOURNAL


Kermitt Waters
Lawyer is petitioning to increase the state gaming tax

Two petitions filed Wednesday would nearly triple Nevada's 6.75 percent gaming tax and allocate the $2 billion generated to construct roads, end residential property taxes and fund a host of other public improvements.

As Las Vegas lawyer Kermitt Waters filed his petitions at the secretary of state's office in Las Vegas, he said he knows what is coming next: a stiff legal fight and well-funded opposition from the gaming industry.

"I feel like Abe Lincoln -- they want to run me out of town on a rail," he said in a Texas drawl.

According to the Gaming Control Board, the entire gaming industry in Nevada generated $2.1 billion in net income in 2006 on $24 billion in total revenue from gaming, rooms, food, beverages and other attractions.

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    • That is almost the amount of money that Waters says his tax increase would generate.

    Waters has stated repeatedly that the gaming industry runs the Legislature and that citizens will never get the public improvements they deserve unless they sign petitions to amend the state constitution and vote for higher gaming taxes.

    He said he's not a "tax-and-spend Democrat," and actually believes that government is inefficient. But he added that something must be done to support basic resources in a state where "nobody ever does anything."

    Nevada's gaming tax rate is now the lowest in the nation and his petitions would raise it to the average rate charged in the 10 other states with casino gaming -- 20.2 percent.

    The petitions specify that the Nevada tax rate would be modified each year to reflect any changes in the average of the rates assessed in other casino gaming states.

    Robert Uithoven, a consultant for Las Vegas Sands Inc., made it clear Wednesday that the gaming industry will challenge Waters' petitions in court.

    He predicted Waters will run into the same problem as the Nevada State Education Association, which two weeks ago filed a petition to increase the gaming tax rate to 9.75 percent.

    Uithoven said all three gaming tax petitions violate a state law that specifies they must deal with only one issue.

    In 2006 the state Supreme Court removed several paragraphs in an eminent domain petition filed by Waters because they violated that one-issue law.

    "One issue is raising the taxes and another issue is putting spending requirements in place," Uithoven said. "That will present a tremendous challenge to him."

    Teachers union President Lynn Warne welcomed Waters' petitions -- which mandate 25 percent of revenue would be earmarked for increasing salaries of public school teachers.

    "Either way, education comes out ahead," she said. "We have met with him. We are supportive of each other."

    Under the teachers union petition, revenue would be earmarked only for teacher pay and educational improvements.

    Warne said she recognizes that Nevada needs improvements in other areas as well.

    If all three petitions are approved by voters, then the state constitution stipulates the one "with the larger favorable vote" becomes law.

    Waters also considered dedicating some of the additional tax revenue for the Nevada System of Higher Education, whose top administrator has been sparring with Gov. Jim Gibbons over his consideration of at least 8 percent in spending cuts.

    University system Chancellor Jim Rogers never returned his call, according to Waters.

    Rogers said Waters never contacted him. But he added that he would not have supported Waters' petitions anyway.

    "I don't believe fundamentally in what he's doing," Rogers said.

    Waters will circulate two slightly different "It's Time for Gaming's Fair Share" petitions.

    On one, about $1 billion of the tax revenue would be used to eliminate property taxes on the primary residence of every homeowner in the state. County governments would be given the extra casino tax money to offset what they would lose with the elimination of residential property taxes.

    Under the other petition, instead of property tax relief, more money would allocated for highway improvements, teacher pay increases, water projects, Millennium Scholarships, and solar and geothermal energy development.

    Waters decided to circulate two different petitions to give voters a choice.

    If voters want to end residential property taxes, then he said they should realize that less will be available for roads, teacher pay and other improvements.

    A Review-Journal poll in October found only 39 percent of respondents backed Waters' 20.2 percent tax, while 50 percent opposed it and the rest were undecided.

    In contrast, two Review-Journal polls and one by Reno Gazette-Journal found better than 2-to-1 support for the teachers union petition.

    Pollster Brad Coker of Mason-Dixon Polling & Research Inc. said people opposed Waters' tax plan because they felt it was too steep of an increase.

    Waters disputed poll results and predicted most people will back his proposal once they understand Nevada's gaming tax rate is the lowest in the nation. On his petitions, he includes a state-by-state chart that shows the rates assessed in other casino gaming states.

    Waters first must collect 58,628 valid signatures for each petition by May. 20 to place them on the ballot.

    Because the petition would amend the state constitution, voters must approve it during the 2008 and 2010 elections before it could go into effect in 2011.

    Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or (775) 687-3901.

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    ths wrote on December 13, 2007 04:17 PM: how about we vote people into office that will take action and fix the problem before a mob mantality takes over.

    Which is better, good leadership, or mob rule?

    I will leave that up to all to answer.


    UNLVStud wrote on December 13, 2007 04:04 PM: Ballot initiatives are unnecessary. Why does this Texas transplant keep wanting to add ridiculous things to our constitution? If he wants to write legislation, run for office. We elect people to write our laws and if you don't like what they're proposing run for office yourself or vote them out and vote your guy in. Don't clutter our constitution with junk! It's been tarnished enough as it is.


    jj wrote on December 13, 2007 02:12 PM: haw about a casino tax of 9%,that seams fair ..


    ths wrote on December 13, 2007 11:22 AM: The retires want their SS and they want a free hand out as well. Unbelievable.

    Raise the taxes and the growth in income for the state will flatten out in the long run. Casinos won't close down but the investment in new amazing elements that draw people to this town and puts this town on the map could dry up.

    That causes a reduction in room rates, meal prices to keep bringing people to town which then means less tax income.

    Understand economics of supply and demand and tax structures before you just decide to comment or go as far as writing a Petition.


    closedwallets wrote on December 13, 2007 10:48 AM: I hardly think they will close down- they may have to loose some of there over paid CEO's and he may be asking for more in order to just get something.


    Tami wrote on December 13, 2007 10:17 AM: Well if you want to distroy a state, just vote yes on this ridiculous tax on casinos. Trust me, they will close down. Why would they pay more to opperate then they receive in? I've seen their tax bill for a small casino and it's incredible as it is. Then ad in all the factors of minimum wage and employing several thousand people. Take them out of the equation and you won't need roads or schools! Free property tax? How ridiculous is that?! You aready have no state tax and now you want casinos to pay your property taxes? Get real!


    Tom Turkey wrote on December 13, 2007 09:45 AM: ths, a lot of people like the idea of NO PROPERTY TAXES because it will draw national attention to the value of Las Vegas Real Estate and will help 40% of the population who live on retirement incomes. We also have a unique need for serious money to operate a (security) "Green Zone" around the Resort Corridor and to weed out the people who are running loose in the 'burbs --both the young who are mugging and stealing and the old who are neglecting their kids.


    Tom Turkey wrote on December 13, 2007 09:40 AM: "According to the Gaming Control Board, the entire gaming industry in Nevada generated $2.1 billion in net income in 2006 on $24 billion in total revenue"

    Assuming that's true, the funny part is that the Gaming Control Board would actually believe it.

    Seriously, a 34% gaming tax in Nevada would still be less than half of what other states impose. The operators may retaliate with layoffs or wage cuts but they aren't going to leave and pay double.


    ths wrote on December 13, 2007 07:17 AM: Who is the greedy one, casinos or Waters. I would have to say Waters, he does not even want to pay an already low property tax of 1 percent.

    I agree with Steve, only "Ignorance of the Masses" syndrom could get this passed and hopefully I have faith in our average fellow Nevada citizen to realize this is bad for everyone in the state.

    The same states that have the higher gaming taxes also have income tax, high sales tax, high property tax, and broad based business tax. Why is he not looking at the bigger picture, because of self greed.


    Steve wrote on December 13, 2007 06:47 AM: "He said he's not a "tax-and-spend Democrat.."

    Yet, he wants to raise taxes and spend it on "social programs" exactly like 100% of the well-known "tax-and-spend" Democrats. Why should the casinos here pay more in taxes SIMPLY because they do in other states. That is a completely ignorant excuse for raising taxes. Why can't taxes in one state be lower than in the others? Only a complete moron would go along with these petitions.