Columnist Jon Ralston: Gross receipts tax has support

Friday, Feb. 28, 2003 | 5:06 a.m.

Jon Ralston hosts the public affairs program Face to Face on Las Vegas ONE and also publishes the Ralston Report. Ralston can be reached at ralston@vegas.com or (702) 870-7997.

IF RECENT POLLS have any validity and if certain groups are willing to put their people and their money where their mouths are, the anti-tax mob may turn out merely to be a vocal, loud and obnoxious minority.

Every group that recently has taken a survey found something it did not like. The crusading anti-anything Review-Journal discovered that about 60 percent support the gross receipts tax. The anti- almost-as-many-things-as-the-R-J Chamber of Commerce also found public backing for the tax they have derided, on gross receipts. And the gamers, who paid the most for their poll and thus obtained the most credible instrument, found that people do want to broaden the tax base, although they still want to milk the casino cash cow.

The R-J poll was conducted by Mason-Dixon, but was done on the cheap and is inherently superficial. The chamber survey was an internal phone bank. But the Nevada Resort Association, which is pushing the gross receipts, called in Peter Hart, who has polled for presidents and major corporations and has measured public opinion in Nevada for years.

Here is some of what Hart found in his statewide poll of 803 registered voters, conducted two weeks ago and with a margin of error of about 3.5 percent:

In general, after years of Nevadans brimming with optimism, people have become overwhelmingly pessimistic (64 percent are concerned about difficult times ahead, almost double what it was three years ago). They recognize the need to fund lower education (52 percent listed K-12 as a top priority) and they understand growth does not pay for growth (65 percent). And while they still think gaming can pay more (88 percent favor even a small increase in the gaming tax), they understand the benefits of broadening the tax base (59 percent say to do it).

"The view of the industry hasn't changed," Hart said in an interview. "The view of the world has."

When Hart asked if state government raises enough in taxes "to adequately meet the state's needs," 50 percent said no and 42 percent said yes. Those numbers starkly contrast with Hart's findings three years ago, when 72 percent said the state raises enough revenue. The message, it seems, is getting through.

So do voters think we need to change the tax system? Only 9 percent said no changes and 25 percent said minor alterations. But 33 percent said some changes are needed, 10 percent said major changes are required and 20 percent advocated an overhaul.

What Hart did -- and the other polls failed to do adequately -- is probe where people really are by presenting choices in dispassionate, unbiased paragraphs. First, he established favorable/unfavorable ratings for taxes. Right behind the 78 percent favoring the quarter-percent increases in gaming came the gross receipts, which was favored by 77 percent. The R-J poll found 58 percent back the gross receipts and the chamber survey found three-quarters of respondents back the tax the business folks love to hate if told of the $450,000 floor.

News flash for the Gang of 63: The public is OK with the gross receipts, if it is properly explained.

When Hart probed further, juxtaposing arguments about big businesses paying their fair share vs. the burden on low- margin companies and the pass-through to consumers, the public is evenly split on the gross receipts. But, Hart found, if people are persuaded that prices would not go up, half of the opponents would change their minds.

Thus, you will continue to hear about how much banks and retailers charge elsewhere -- maybe through gaming-sponsored TV ads and "spontaneously formed" citizen coalitions.

And speaking of the devil that is gaming, 83 percent said they believe the casinos are either extremely or fairly profitable. Only developers (77 percent) came close, with others that the gamers and the governor would like to see pony up not being perceived as quite so cash-rich. Bankers (64 percent), national retailers and grocery stores (57 percent) and especially miners (27 percent) were not seen as nearly as flush as the gamers. And Hart found that half the respondents believe the casinos should pay a larger tax increase than other businesses.

But when Hart presented voters with two clear choices -- taxing casinos to make up for lost revenue so residents and other businesses don't have to be taxed, or diversifying the tax base to reduce dependency on the casinos and make others who use services pay for them -- it wasn't even close. Fifty-nine percent said pass a broad set of taxes while 32 percent stuck with soaking the Strip.

"'There is a recognition that everyone has to get in," Hart said. "Before, in heady times, people saw the big boys as having it. But in tougher times ... everyone has to be in it. The public has moved a little bit on this. They see gaming as part of the solution, but not the only solution."

Politicians, alas, often listen to the voices that yell and threaten the loudest. But if this very credible poll is to be believed, then what legislators should realize is that the majority of people understands the problem of broadening the tax base and viscerally supports the gross receipts method.

So if lawmakers don't want to believe Guinn and must put their fingers in the wind rather than making their own decisions, the Gang of 63 should know that the public is not as knee-jerk as the anti-everything, we-know-how-to-e-mail caucus would have them believe.