Columnist Richard Bunker: Column on taxing casinos quickly went awry

Richard Bunker

Thursday, Sept. 2, 1999 | 9:32 a.m.

Richard Bunker is president of the Nevada Resort Association.

When I read state Sen. Joe Neal's recent column, "Gambling must ante up," I marveled at the confusion under which he is laboring. At the beginning of his column Neal acknowledges that the resort industry "is the principal engine of our growth." Yet after that tip of the hat he goes on to not only criticize policies that have kept the engine humming but to recommend a policy that would throw ground glass into the engine parts.

First, he seems particularly upset that the convention authority uses taxes levied on tourists to help promote tourism to Las Vegas. Would he prefer that Las Vegas citizens pay for that promotion? Of course not. Would he prefer that resorts pay to promote tourism to Las Vegas? Of course, but he fails to acknowledge that the resorts already pay hundreds of millions of dollars to promote travel to our resorts.

The convention authority also has the important role of promoting the convention business here in Las Vegas. Those millions of conventioneers fill our massive inventory of more than 100,000 rooms week in, week out. They stay in our resorts, patronize our casino floors, shop in Las Vegas, and dine in restaurants throughout our community -- all the while paying taxes that fund our government at all levels and keep residents' taxes low.

And the senator fails to acknowledge that more than half the room taxes go to our parks, our roads and our education system he is allegedly concerned about. Yet, somehow in Neal's hands helping to fund parks, roads and schools, promoting Las Vegas as a great place to host a convention, and fueling our economy with taxpaying visitors has become twisted into some kind of policy failure.

Neal goes on to state that the resort industry isn't paying its fair share of taxes. That is true. The industry is not paying its fair share; it is paying far more than that. While other Nevada businesses, except for the mining and insurance industries, escape the tax collector, the gaming industry pays more than 50 percent of the tax bill. An assortment of taxes, from direct gaming taxes and entertainment taxes to slot taxes, hit the industry to the tune of more than half a billion dollars a year. At the same time these taxes are levied, other profitable sectors of our economy virtually escape any responsibility to pay for government services.

While the senator professes concern for parks and education, he apparently believes only one industry and our employees has any responsibility to pay for those and other needed services. From Bank of America to Starbucks, national companies pay virtually nothing here in Nevada to meet the taxpayers' needs. Despite the massive tax break, products and services sold here in Nevada are not reduced in price for the benefit of those of who live here. So we get the worst of all worlds -- no price break and no help paying for government services.

Neal should know all about this because for years he was employed by a contractor at the Nevada Test Site. That company, like so many others, avoided almost all tax obligations to Nevada taxpayers. It wasn't mining, it wasn't insuring and it wasn't attracting tourists. It conducted nuclear tests in our atmosphere and under our desert, paid no taxes and left the state. Yet Neal found no reason to criticize them all those years for not helping Nevada taxpayers.

Schools and parks are worthy public goals. So is health care and so is education. Those are legitimate concerns for government. And the burden of paying for those services must be fairly allocated and do minimum damage to the economy. Yet the senator proposes to hurt the one industry that is already paying the vast majority of taxes.

We employ one out of four Nevadans; many are Neal's constituents and supporters. We provide our employees a full and expensive range of health care and retirement benefits unparalleled in the retail, nonunion construction, and small business sectors of our economy. If the gaming industry is hit with additional taxes, nearly doubling the tax burden under the latest version of Neal's proposal, the industry and Nevada will be devastated.

Going from 6.25 percent to 11.25 percent on the gaming gross revenue would be the equivalent of a corporate income tax of 80 percent. In other words, Neal would make Nevada the single worst place to engage in the resort business in the nation. Make no mistake about it, he would slam the brakes on economic progress, stop needed investment and short-circuit any chance for our employees to benefit in the future through increased wages and benefits.

All this would happen in order for Neal to protect other sectors of the economy that have escaped their responsibilities to our children and those in need of services. When readers next visit a resort, they should take a moment and look around, from the valet attendants, to the dealer in the pit, to the busboy cleaning tables. That is the resort industry Neal wants to tax.

He may have forgotten, but they are also his constituents and deserve a tax policy that doesn't make them and their co-workers bear all the burdens while others escape altogether.