Proposed increase in gaming tax is voted down again

Friday, April 13, 2001 | 10:29 a.m.

CARSON CITY -- Sen. Joe Neal, D-North Las Vegas, a frequent critic of the Nevada gaming industry, softened his plan to tax the big casinos Thursday but it still met defeat -- as it has in several years past.

The Senate Taxation Committee voted down Senate Bill 105, which would have raised the tax from 6 1/4 percent to 8 1/4 percent on gross revenue. The vote was 5-2, with only Neal and Sen. Mike Schneider, D-Las Vegas, supporting the proposal. The original bill called for the tax to be increased to 10 1/4 percent, but Neal agreed to reduce it in order to get some backing.

Neal also tried to amend his bill to increase the gaming tax and impose a business profits tax as sought by the union of schoolteachers in Nevada. But he didn't even get a second on his motion to amend the bill.

After the hearing, Harvey Whittemore, lobbyist for the Nevada Resort Association, said this was not the end of the tax discussion for this session. "It's clear ongoing discussions will go on for the next 60 days," he said. "This issue isn't over with respect to tax load."

If there is a tax, it should be broad-based and not aimed at a single segment of business, said Whittemore. He said he was happy the committee recognized the gaming industry should not be singled out to bear a disproportionate burden. "The committee made it clear they would revisit the issue."

That will come after the Economic Forum makes its predictions on May 1 on how much tax money will be flowing into the state in the next two years. At present, financial experts believe that $150 million may have to be cut from the budget of Gov. Kenny Guinn because of lower revenues than originally forecast in December.

A second bill by Neal to require an advisory question on the election ballot asking voters whether the gaming tax should be increased, also failed with only Neal supporting it.

Neal tried two years ago to get the casino tax raised and failed. He started an initiative petition to boost the tax but failed to get the necessary signatures.

Neal urged his counterparts on the Taxation Committee "to step up to the plate and do something." He said there is a budget shortfall and "we need money for services."

There must be higher salaries to attract and retain teachers and to pay for books for schoolchildren, he said. He suggested there must be higher pay for state workers so they are not leaving for other employment.

"This is the only thing we have got on the table in this house," he said, referring to a tax plan. "There's been a lot of talk. I put something on the table, whatever the risk." If the Legislature waits two years, the problem will be greater.

After his defeat, Neal challenged the committee to tell him how they will deal with these problems.

Only Sen. Ann O'Connell, R-Las Vegas, answered him. She said she has an anti-tax philosophy. And she said businesses and families are having a hard time now carrying their high tax load. There were 34,000 bankruptcies in the state last year.

"My concern is for my constituents and their tax burden," O'Connell said. "The more burden, the less money we have from taxes. And we're going into an economy that's flat."

Schneider wondered if the committee could hold the bill until later in the session to see how much was needed to pay for the shortfall and other programs. He said he has a bill that would require increased aid to schools, but that will cost several hundred million dollars. But the gaming tax bill must be out of committee by Monday and this was the last meeting of the committee.