Car rental tax to help fund culinary school, arts center

Wednesday, July 23, 2003 | 9:57 a.m.

People who rent cars in Clark County could soon help pay for a training center for would-be hotel employees and a performing arts center downtown.

The Legislature on Monday night passed a bill that allows the Clark County Commission to levy a 2 percent tax on car rentals to help finance the Culinary Training Academy and the Las Vegas Performing Arts Center. The bill, backed by Assemblywoman Chris Giunchigliani, D-Las Vegas, passed the Assembly 29-12 and the Senate 13-7.

Assembly Bill 16, the car-rental tax, failed to pass during the regular session but was one of several bills that came back in the final hours of the special session, part of late-night horse trading that built a two-thirds majority in both houses for the main tax package.

George Stevens, Clark County finance director, said about $4 million could be raised annually from the rental car tax.

"We don't know exactly," he said, but the $4 million estimate is based on rentals through McCarran International Airport.

Stevens noted that the bill targets tourist rentals and includes a provision that waives the new tax, if it is imposed by the county commission, on locals who need a replacement car after an accident.

Managers at local car rental agencies said the new tax is just the latest on a pile of taxes that can add 20 percent or more to the cost of a rental car for tourists.

Jeremy Ricks, manager at Las Vegas' Xpress Rent-A-Car, said the tax policies of Las Vegas follow a national trend of "soak the visitors." Similar tax policies are in place in New York, Los Angeles and other big cities, he said.

"It's become an industry standard no matter where you travel these days," Ricks said. "Most of the people who come here have gotten used to it."

Several other managers from local car-rental companies echoed the comments, saying local taxes are already one of the biggest components of the rental bill.

Local officials say the revenue generated by the tax could be important to getting the Las Vegas projects off the ground.

With the tax in place, the county could buy about $40 million to $50 million in bonds to support the culinary academy or performing arts center, Stevens said.

"You could leverage the entire $4 million over 20 years."

The new law dictates that the first $3 million collected under the tax will go to the hotel-and-restaurant vocational school.

Nevada Partners, a nonprofit group, broke ground on a new building for the culinary academy at 710 W. Lake Mead Blvd. in February. The $5 million school, funded with federal, county and city grants coupled with business investment, would replace the decade-old center on Fremont Street.

Steven Horsford, president of both Nevada Partners and the Culinary Training Academy, said hotels have already contributed $2 million to the effort, and the county has contributed $300,000 in initial seed money for the design of the new center.

The car-rental tax, if approved, will fund construction of the first phase of the culinary academy construction, Horsford said. Additional funding will expand the project, he said.

Horsford said he expects the county commission to approve the new tax, and the funding would allow students to begin work in the new building in early 2004.

"We haven't gone to that level yet," he said. "We were focusing our efforts on the Legislature.

"I think based on the priority, the need for the projects listed in the bill, the county commissioners will be very supportive."

Backers hope to double the school's current output of 2,500 annual graduates to 5,000.

The performing arts center is another project that is under way, although actual construction is not imminent. In May, the Las Vegas City Council approved the use of five acres of land it controls downtown for the center.

Last year, the Clark County Commission approved $150,000 in seed money for design of the center. The center also has extensive backing from business and community leaders.

According to the Las Vegas Performing Arts Center Foundation, a nonprofit group trying to establish the center, the cost would be $170 million for two theaters seating 2,500 and 650 people. The foundation hopes to open the center in downtown Las Vegas by 2007.

Clark County Manager Thom Reilly said the tax on car rentals will be up to the commissioners to impose.

"The county has been a big supporter of the culinary academy and the performing arts center, but I'm not sure where the commissioners will go with this," Reilly said. "That will be a decision of the county commission and I have not had a chance to discuss it with any of the commissioners."

Commissioner Myrna Williams has been a supporter of both the culinary academy and the performing arts center, but she said she will have to look at the bill and the tax impact before backing the increase.

"I do support the culinary academy," she said. "It provides a great opportunity for people and it provides a great opportunity for businesses that need trained people.

"Conceptually, I think it's a good idea to fund that through tourism because they are the ones who eventually benefit from the training," Williams said. "But I have to wait and see. I'm not sure what is in the bill."