Tax panel seeks lottery data

Erin Neff

Thursday, March 14, 2002 | 11:07 a.m.

A panel studying which taxes may be imposed or increased to help make up for Nevada's budget shortfall asked Wednesday how a lottery might generate needed revenue.

The request, ironically, came from the panelist representing the industry most opposed to a lottery -- gaming.

Mike Sloan, an executive for Mandalay Resort Group and an appointed member of the Governor's Task Force on Tax Policy, asked whether any lottery data have been analyzed to determine a range of potential revenue.

"Could you have somebody do a rationale test so we can see if that makes any sense?" Sloan asked an economist working for the task force's technical working group.

Sloan prefaced his request by mentioning the increasing buzz over a lottery -- spurred in part by Las Vegas Mayor Oscar Goodman's recent recommendation that the state consider a lottery.

Task Force Chairman Guy Hobbs said past analysis of a lottery's potential in Nevada had "fascinating" data. A lottery was once considered to fund Regional Transportation Commission projects, he said.

Past studies of Nevada's so-called structural deficit -- an economy reliant on sales and gaming tax that cannot fund needed programs during economic downturns -- have examined a lottery's potential, Sloan added.

During the 2001 Legislature, Assemblywoman Kathy McClain, D-Las Vegas, proposed asking voters whether they wanted a lottery. Her legislation failed, largely due to opposition from gaming lobbyists.

McClain, who plans to reintroduce the bill in the 2003 session, estimates Nevada could take in $65 million a year to fund education and senior citizen programs.

Enacting a lottery would require changing Nevada's Constitution -- a process involving approval by the Legislature twice and public votes. With the Legislature meeting just once every two years, a lottery could take eight or more years to implement.

Although none of the task force members mentioned specific support for a lottery, the request to study it bolsters its potential as a revenue source.

Sloan's request capped a daylong meeting of the task force in Carson City focusing on education needs.

Representatives from Clark and Washoe county school districts, the Nevada State Education Association and the University and Community College System discussed severe needs.

Mary Ella Holloway, president of the Clark County Education Association, told the task force that teachers have been more than patient waiting for pay increases.

"There is a problem when a teacher's child qualifies for free or reduced-price lunch," Holloway said. "There is a problem when a teacher qualifies for the earned income tax credit according to the IRS."

The task force rapidly learned how expensive it will be to elevate Nevada on the nationwide rankings of school performance, teacher pay and per-pupil expenditures.

It would cost $153 million to fund a 3 percent increase for teacher salaries in each year of a biennium. Technology needs of $130 million and improved early childhood education programs costing $140 million also are needed to bring up performance, state Superintendent Jack McLaughlin said.

"It certainly adds up pretty quick," said task force member Ken Lange, executive director of the NSEA.

Jane Nichols, chancellor of the university and community college system, said Nevada should try to improve its rate of students attending college by creating a seamless system of education from K-12 to the university level.

Nevada and Alaska have the lowest college-going rates nationwide.

Dan Miles, vice chancellor for finance, said he estimates Nevada could have 85,000 students enrolled in higher education programs by 2010 at a cost of $1.025 billion. The state's share of that amount would be $769 million, with student tuition paying the rest.

Miles also said the university system has a 2 million-square-foot shortage of educational space, requiring more capital expenditures. But, he warned, Nevada has become more reliant on general obligation bonds to fund such programs. As a result, the state's ability to issue bonds will be very limited in coming years.

The task force will next meet April 10 in Las Vegas. The committee is charged with submitting recommendations to the state by Nov. 15.