Where I Stand — Joe Neal: Gambling must ante up

Thursday, Aug. 19, 1999 | 9:50 a.m.

Editor's note: In August Where I Stand is written by guest columnists. Today's guest is state Sen. Joe Neal, who has represented North Las Vegas in the state Legislature since 1972. Neal has long been almost a lone voice in the Legislature calling for increased taxes on the Nevada gaming industry to support the needs of a growing state population. Today Neal writes that he will author an initiative petition calling for the state's gross revenue tax on large gaming corporations to be raised 5 percent.

IN A RECENT speech before the construction industry, Mandalay Resort Group Vice-President Mike Sloan said, "There seems to be a mindset focused only on lower costs without regard to the impact on the community. ... If we don't lift up, we're going to drag everyone else down."

The gambling industry lifts us up as the principle engine of Nevada's growth. But it also drags us down because it does not pay its fair share for the impacts of that growth.

Evidence lies all around us. Clark County has just one acre of park land per 1,000 people. The national average is four to six acres and the National Recreation & Park Association recommends 10 acres per 1,000 in population.

This is a problem we thought we had solved with the 1955 passage of the Fair & Recreation Board Act, which allowed counties to impose a room tax. Almost all of that money has long been shunted to casino promotion, one of an ever-lengthening list of corporate welfare programs that drain communities to support a very profitable private industry.

Gambling executives make much of the $578 million their industry is expected to pay the state this year. But that only represents 8.96 percent of the state's 1999-2000 budget. Of that $578 million, $43.8 million is entertainment tax passed through from patrons. The remaining $534.2 million trails $569 million in projected sales taxes, three-quarters of which is paid by Nevadans.

Room tax revenues to convention and visitors authorities around the state now approach $200 million a year. More than $281 million has been taken out of the Las Vegas property tax base for casino-promoting downtown redevelopment projects. If we do nothing, casinos will soon get back more in corporate welfare than they pay in taxes.

In the past few years, the gambling industry has succeeded in facilitating tax increases on everyone else while winning tax breaks for itself. The (Mirage Resorts Chairman) Steve Wynn art loophole and the lucky bucks writeoff represent only the most recent outrageous examples.

Corporate welfare for the gambling industry has placed municipalities in a financial squeeze. Counties have had nowhere else to turn but property taxes, which explains why such levies have consistently outpaced inflation in many parts of the state.

Now, gambling is gearing up to raise everyone else's taxes again. Mr. Sloan himself announced it last February before the Nevada Legislature.

"A whole category of business pays nothing more than limited taxes," he stated, using retail stores and banks as examples -- businesses which will largely pass increases onto Nevadans, not visitors.

Gov. Kenny Guinn recently said that he will oppose any initiative petition to raise taxes. He favors the "flexible" legislative process rather than a "rigid" initiative.

The record shows that the Legislature has been totally inflexible, raising taxes on everyone else while keeping Nevada's gaming levy lowest in the world.

It is time to balance the books. I propose to add five percentage points onto the gross tax paid by the state's largest, most profitable gambling enterprises. Every penny will be deductible on federal tax returns, so it may be viewed as largely keeping tax money at home rather than sending it to Washington.

We can do so much with it rather than see casinos invest it in other states and countries. Otherwise, we will continue to see ourselves rated as the 44th worst place in the nation to raise children.

My petition will earmark half its proceeds for school operations so that teachers will not have to pay for supplies out of their own pockets. It will equalize the pay of Nevada Highway Patrol troopers with their counterparts in local law enforcement.

It will reduce the motor vehicle privilege tax and at long last fund a state program on gambling addiction, something the industry forced government to ignore for decades.

Gov. Guinn said, "I'm not for anybody to have initiative petitions to start raising taxes because you're asking an electorate to raise taxes when they don't understand all the ramifications."

I have faith that the public is capable of making the right choice. The Constitution empowers them to act when their government will not.