Union official says strike would cause big gaming tax loss

Wednesday, May 15, 2002 | 11:03 a.m.

Nevada's struggling state budget could lose $800,000 in gaming industry taxes for each week Las Vegas hotel workers remain on strike, a Culinary Union official said Tuesday.

Courtney Alexander, the union's research director, said the lost taxes would be the result of an expected 10 percent decline in gaming revenues on the Strip and downtown.

"These figures are significant enough that we all should be working to avoid a breakdown in contract negotiations," Alexander said.

Alexander was to present her research today to the Governor's Task Force on Tax Policy -- one day before the 50,000-member Culinary Union votes to authorize a strike if a new collective bargaining agreement with 35 casinos can't be reached by May 31.

In a copy of her presentation, Alexander said a June 1 strike would compound the state's budget crisis created by the terrorist attacks of Sept. 11.

She said the State Budget Office has estimated that Nevada has taken in $86 million less in forecasted tax revenue for fiscal 2002 in the aftermath of Sept. 11. About $41 million of that lost revenue was the result of a decline in gaming taxes, she said.

Gov. Kenny Guinn said today the state would have to make additional budget cuts if it lost more revenue because of a strike.

"If this happens, it would be very serious for us because of our already weak revenues streams from Sept. 11," he said. "To add anything else to it would be devastating."

Guinn said he has been forced to cut nearly $250 million from the budget over the current and next fiscal years because of a post-Sept. 11 decline in gaming and sales taxes.

Alexander said the casino industry likely would suffer lost revenues similar to the bitter Culinary Union strike of 1984. Business fell off by 9.6 percent on the Strip and 10.3 percent downtown the first month of the walkout, she said.

A comparable drop in business occurred within the first two months of the terrorist attacks of Sept. 11, Alexander added. Gaming revenues on the Strip declined by 10.6 percent in October and then 11.9 percent in November.

But Mike Sloan, a senior vice president at Mandalay Resort Group and a member of the task force, earlier this week accused the union of using the tax panel to further its negotiating position.

"They seem oblivious to the decline in revenues since Sept. 11 while asking for the largest increase in benefits in the history of our collective bargaining relationship," he said.

In her presentation Alexander said business has returned to the top four gaming companies on the Strip -- Park Place Entertainment, MGM MIRAGE, Mandalay Resort Group and Harrah's Entertainment -- but employees have been asked to make further sacrifices, such as contributing to their health plans.

"Casinos want our members to start paying for their insurance out of paychecks," she said. "That demand represents a pay cut."

Alexander said workers have suffered tremendously since Sept. 11. More than 8,000 union members were laid off, and many are unlikely to be recalled to work, she said.

If union members, who on the average earn $12 an hour, are forced to start paying for health insurance, she explained, many won't be able to afford it, and that will further strain the public health system.

Medicaid, she said, needs another $48 million by June 3 to keep up with the benefits it provides. 11. To add anything else to it would be devastating."