Neal rips teachers union tax plan

Tuesday, April 18, 2000 | 11:09 a.m.

CARSON CITY -- Sparks are starting to fly between authors of two rival initiative petitions -- one that would raise taxes on major casinos and one that would impose a business tax.

Sen. Joe Neal, D-Las Vegas, said the teachers union is trying "to deep six" his plan to boost the tax on more than 100 casinos by 80 percent. He said the proposal by the teachers' organization for a tax on business profits could put Nevada on a dangerous road to financial instability.

But Elaine Lancaster, president of the 22,000-member Nevada State Education Association, suggests Neal hasn't read the teachers' tax plan, which she said is "fairer and more equitable than any we have seen."

Neal wants to raise the tax on casinos that gross more than $1 million a year from 6 1/4 percent to 11 1/4 percent. He said it would yield an estimated $338 million a year, with 45 percent going to public schools.

The teachers' group wants a 4 percent tax on net profits of businesses that realize more than $50,000 a year. It would raise an estimated $250 million, with all going to the public schools.

Neal is upset by a section in the teachers' petition that says if both plans get on the ballot, the one with the most votes prevails.

"Why are they putting that in the petition?" he asked. "It's somewhat selfish on their part, especially when most of our money is going to education."

Lancaster said the highest vote requirement is in Nevada law when there are rival petitions on the ballot. She said the association had "many lawyers and tax folks" looking at the tax plan so there would not be any legal loopholes.

But what irks Neal more is the teachers' proposal for taxing the net profits of casinos, instead of the gross revenues.

The net profits, he says, amount to $1 billion a year. If the teachers' plan succeeds, Neal sees the gaming industry pressuring the Legislature to scrap the tax on the gross revenue and substitute a tax on net profits.

That, according to Neal, would drive down the taxes paid by the casinos and "would wreak havoc on the state."

"A tax on net would be devastating," he said.

Al Bellister, financial expert for the teachers union, said it's not the intent of the union to scrap the tax on gross gaming receipts. Casinos in Atlantic City, he said, pay both a tax on their gross and a corporate income tax.

Bellister estimates the 4 percent net profits tax on table games and slot machines would yield only $16 million to $17 million a year. He also said the teachers' tax would be imposed on profits from food, beverages, rooms and other items in hotels -- which are not now taxed.

He said he didn't want to speculate if the gaming industry would push to eliminate the gross tax and substitute a net profits tax plan on table games and slot machines.

Neal, who filed his petition Jan. 24, refused to say how many signatures he has collected of the 44,009 needed.

"We're going to get the signatures, but I'm not going to tell them (the teachers union) what we're doing," Neal said.

He said his plan is doing better in rural Nevada than in the urban counties of Clark and Washoe.

The petition by the teachers' organization was filed April 7. Lancaster hopes to gather 80,000 names of registered voters.

Both petitions have until November to collect the signatures. If successful, they would be presented to the 2001 Legislature, which must approve them in the first 40 days. If lawmakers reject or change them, then the original petitions go to the voters in 2002.