Editorial: Let’s hit the brakes on this bill

Tuesday, May 1, 2001 | 9:06 a.m.

Legislation has passed the Assembly that would give tax breaks to professional racing teams and racing sanctioning bodies located in Nevada. But the Senate should vote down Assembly Bill 657 -- the last thing that Nevada government's cash-strapped budget needs is another tax break for a special interest group.

The bill's backers say it would result in more racing teams moving here, especially from California, which has significantly higher taxes. Under AB539, racing teams would be exempt from paying sales taxes on engines, chassis and other parts they buy for their vehicles. One racing team owner based in California said he could save as much as half-a-million dollars a year.

More teams undoubtedly would be great news for racing enthusiasts here, but such an incredibly narrow tax break is bad public policy. Nearly every industry in Nevada, and many businesses, could argue that they play an even more important role to the economy, and are worthy of tax exemptions, too. If this legislation were to become effective, why shouldn't more deserving businesses be granted sales tax exemptions on the goods they buy to keep their companies running?

Meanwhile, the CEO of Championship Auto Racing Teams has told the Nevada Legislature if the tax break is approved, the organization might move its headquarters from Michigan to Las Vegas instead of a competing site in Florida. "The determining factor of whether we come to this state or not rests solely in the passage of this bill," CART's Joseph Heitzler testified before the Assembly Taxation Committee in mid-April. There also is a provision in the bill that would allow racing sanctioning bodies to receive an exemption from sales, service and storage taxes on motor vehicles used during such a move.

The fact is, however, that all professional sports leagues have worn out the patience of fans, who have been asked to provide tax breaks to sports teams. These teams often threaten to go elsewhere if they don't get what they're seeking -- often a taxpayer-financed stadium or, in this case, a racing league saying it will move its home base elsewhere.

Even if the legislation passes the Legislature, fortunately it still would have to go before the state's voters as a ballot question in the 2002 general election. But in light of the state's current fiscal woes, in which government is scraping to find every available dollar to pay for education and other pressing social needs, the Legislature should not allow even more tax breaks.

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