Sen. Neal starts campaign for casino tax hike

Brendan Riley

Tuesday, Jan. 25, 2000 | 5:34 a.m.

CARSON CITY - Sen. Joe Neal launched his latest bid for higher casino taxes on Tuesday, holding news conferences around Nevada after filing the plan with the secretary of state.

Neal, D-North Las Vegas, came up with the proposal after failing last year to get the Legislature to raise taxes on big casinos from 6.25 percent to 8.25 percent of the gross gambling win.

He's back with a proposed tax rate of 11.25 percent for casinos that earn $1 million or more a month in gross revenues. The plan would affect more than 100 casinos.

At news conferences here and in Las Vegas and Reno, he predicted he'll easily get the 44,009 signatures needed to force the 2001 Legislature to consider the latest proposal.

Neal estimates his plan will raise nearly $400 million a year. He wants 45 percent of the new tax money to go to public education, 38 percent to cut vehicle privilege taxes, 8 percent to raise Nevada Highway Patrol salaries, 7 percent to help diversify the economy and 2 percent to fight gambling addiction.

He adds that Nevada casino operators pay "the lowest taxes in the world," the tax rate hasn't been increased since 1987, and Nevada resorts are investing profits from a low-tax environment in states that compete with Nevada.

Neal has focused on major resorts on the Las Vegas Strip, saying they've reported big profits and it's clear they can afford to pay more.

The Strip profits were included in a state report showing Nevada's major resorts had combined pretax net profits of $1.13 billion in fiscal 1998, or an 8.2 percent return on gross revenues of $13.88 billion.

But casino industry officials said the report excluded huge interest costs and other expenses, and when federal income taxes are figured in, the net drops to only about $300 million for all top Nevada resorts combined.

Bill Bible, president of the Nevada Resort Association, called Neal's plan "excessive, irresponsible and destructive."

Bible said casinos are the most heavily taxed industry in the state, and the increase could force some smaller operations to close while forcing some larger clubs to lay off workers.

Neal's initiative petition, filed late Monday at the secretary of state's Las Vegas office, says the gambling industry "must pay its fair share of the financial burden of its impact on governmental services and the environment."

The document adds that the casino industry shouldn't be able to use its political clout established through campaign contributions to shift its responsibility to other businesses and to citizens.

Neal has until Nov. 14 to get 44,009 signatures of registered voters to submit the petition to the 2001 session of the Nevada Legislature.

If the Legislature fails to act, the plan will be on the 2002 general election ballot. University of Nevada polls for the past several years have consistently shown support for a gambling tax increase.