Neal debates casino tax bill — again

Wednesday, Feb. 26, 2003 | 9:46 a.m.

CARSON CITY -- Sen. Joe Neal, D-North Las Vegas, waged a vigorous fight Tuesday to raise taxes on the big casinos in Nevada, but he has little confidence he will succeed. Neal debated Senate Bill 21 with casino and labor executives for about 2 1/2 hours. The bill would raise the tax on the 249 casinos that gross more than $1 million a month from 6.25 percent to 10.25 percent.

But after the hearing Neal said "the chances are about the same as before." His gaming tax bills went down to defeat at least twice in the Senate Taxation Committee in prior sessions.

A poll of some committee members Tuesday showed they were not swayed by Neal's passionate pleas.

Committee Chairman Mike McGinness, R-Fallon, and Sen. Bob Coffin, D-Las Vegas, said the proposed tax rate increase was too high.

"It would close some of the downtown (Las Vegas) casinos," Coffin said. McGinness said the committee has to see all of the tax proposals before taking any vote, and he suggested that may be a long way off.

Gov. Kenny Guinn's proposed tax plan is expected to be introduced this week. Guinn proposes a one-quarter of one percent tax on gross business receipts. It would boost the gaming tax to 6.5 percent and levy a new tax on other operations in the casinos.

The committee is also waiting to see tax plans by Sens. Terry Care, D-Las Vegas, and Mark Amodei, R-Carson City.

Neal argued that the casino tax has not been raised in 16 years.

But Lorenzo Fertitta, president of Station Casinos; Bill Bible, president of the Nevada Resort Association; and Billy Vassiliadis, a lobbyist for the gaming industry, said they believe the casino industry has been carrying the tax load alone. It's time, they said, for other industries to start bearing their share of the taxes.

Fertitta said there must be a "broad-based solution" not one aimed solely at his industry.

Fertitta acknowledged that other states have higher casino tax rates. But they are located near population centers, he said, and there is a limited number of licenses, while Las Vegas is "the most competitive casino environment in the world," he said.

When Fertitta, Bible and Vassiliadis mentioned the challenge from Indian gambling, Neal said referred to a recent Time magazine story that suggested the success stories about Indian casinos are overstated.

Fertitta recited 10 tribal gaming locations in California that he said were profitable. McGinness asked Fertitta to supply those figures to the committee.

Fertitta's company plans to manage a major Indian casino near Auburn, Calif. But, he said, the money generated from the California operation will be used to build a major casino in Las Vegas.

Vassiliadis said Neal was not taking into account other taxes paid by the gaming industry. He said the casinos have supported an increase in the hotel-motel room tax and in the state's $100 a year per employee tax.

Neal said: "Gaming does pay a substantial amount. That's the way it should be (because) it generates more problems." Neal also tangled with Glen Arnodo, political director of Culinary Local 226 of Las Vegas, and Danny Thompson, head of the Nevada State AFL-CIO, who both opposed the casino tax increase.

Arnodo said casinos in Las Vegas pay for one of the best health plans in Nevada for their 50,000 workers. Some other big businesses don't insure their workers and when those workers wind up in hospitals it costs the state in Medicaid money, Arnodo said. And businesses such as Wal-Mart, Bank of America and Wells Fargo don't pay taxes on the money they make in Nevada, he noted.

Neal told the two union leaders that his bill would not affect their members. Neal said the casino tax increase would affect only the profits of the casinos, not restaurants, rooms or bars.

But Thompson said taking profits out of the casinos would mean less money for Las Vegas to maintain its "quality of gaming" and said there would be less money for investments of new attractions and casinos.

A report from the state Gaming Control Board last month said the 249 large casinos in Nevada lost a combined $33.5 million before federal income taxes and extraordinary expenses in fiscal 2002.

But Neal said he had seen a report on MSNBC that said Las Vegas casinos take in $12 billion in wagers each month, so by his caculations the state was losing $1.5 billion a year in tax revenue by not collecting as much as he thinks the state should from gaming.