Gaming, O’Connell still split over taxes

Kirsten Searer

Friday, Aug. 27, 2004 | 11:14 a.m.

State Sen. Ann O'Connell and gaming industry bosses are reliving the 2003 tax debate in what is becoming a fierce primary contest for O'Connell.

The gaming industry is targeting the longtime senator because of her pointed opposition to a tax plan the industry supported, and O'Connell is striking back.

O'Connell, R-Las Vegas, is running radio and mail ads saying the industry "has declared war on one of our most trusted elected officials" because O'Connell refused to let gaming "raise your taxes and lower theirs."

Casino officials flatly deny the charges.

"What this ad says is we attempted to lower our taxes, which is blatantly false," said Bill Bible, president of the Nevada Resort Association, the industry's state lobbying arm. "We were the only industry that I know of other than mining that stepped up and said, 'We understand the state has a financial problem.' We're willing to pay more, but so should other businesses."

O'Connell's radio ad comes in response to a media blitz by the Citizens for Fair Taxation, a group funded largely by the gaming industry, that charges O'Connell tried to dramatically raise taxes in a proposal contrary to one the gaming industry supported.

O'Connell said she co-sponsored a bill to give lawmakers an alternative tax plan to debate, a move that her opponents say would have meant $1.6 billion in new taxes over two years.

The 2003 Legislature was contentious because of the plan to raise nearly $1 billion in new taxes to cover a projected revenue shortfall over the biennium.

Casino executives supported a plan that would have taxed businesses' gross receipts. The Governor's Task Force on Tax Policy, the group that studied various tax plans, recommended the Legislature adopt a tax on businesses' gross receipts, saying it was the fairest way to go.

The plan was opposed by several chambers of commerce, and was never adopted.

O'Connell said the proposed gross-receipts tax would have decreased the gaming industry's overall share of the tax burden, and during the session she stood opposed to it.

"I'm the one who made the motion to kill their gross-receipts tax as many times as it came up," she said. "I was very instrumental in getting that tax killed."

O'Connell charges that the gaming industry wants to reduce its overall share of the tax burden from about 48 percent of the taxes collected in Nevada to about 15 percent.

MGM Mirage spokesman Alan Feldman said O'Connell is misrepresenting what was said.

Gaming reflects about 15 percent of the state's economy but pays a much higher percentage of taxes, Feldman said.

"So what we have said is we would like other industries to accept some of the burden, but that doesn't mean 'reduce our taxes,' " Feldman said.

Gaming was willing to increase the amount of taxes it paid, but it wanted a more broad-based measure that would tax other big businesses, including retail and banks, to share the burden, Feldman said.

"There are industries making all kinds of money here that are not participating at a proportionate level," he said. "And retail is one of the biggest."

Even the gross-receipts tax would have increased gaming taxes, Bible said. Gaming bosses, who are largely supporting O'Connell's Republican challenger, Joe Heck, said they were trying to be responsible by taking on an added tax burden and sharing the costs with other big businesses.

The Citizens for Fair Taxation ads say that O'Connell tried last year to raise taxes by $1.6 billion over two years by co-sponsoring a bill known as Care-Amodei for its two sponsors, Democratic Sen. Terry Care and Republican Sen. Mark Amodei.

Tax expert Jeremy Aguero, a principal at research firm Applied Analysis, said the bill O'Connell co-sponsored could have raised an estimated $1 billion in taxes annually, depending on how the sales tax was defined.

While the gaming ads have criticized O'Connell for co-sponsoring the bill, O'Connell said she simply wanted to examine other ideas for new taxes.

"When you sign onto a bill it doesn't necessarily mean you are supporting it," she said. "The bill might go through a dozen changes you don't agree with. I signed onto the bill because we -- we being the 10 people on there -- felt there should be an alternative to the gaming tax proposal."

She said several lawmakers felt that the gaming industry was controlling the tax debate while legislators did not have their own plan to work with. That's why she said she co-sponsored the Care-Amodei bill, which looked at taxing services businesses provide.

The bill was created to examine other methods of taxation, O'Connell said. It never made it to the floor.

But the Citizens for Fair Taxation has seized on that vote.

A recent flier by the group asks voters to "put the brakes on Ann O'Connell's tax hike."

"O'Connell has co-sponsored a plan to raise taxes on Nevada's hard-working families and small businesses," it says, pointing out that the bill would have raised taxes on auto repair, lawn services, dry cleaning and property taxes.

Sen. Sandra Tiffany, R-Henderson, said she and O'Connell co-sponsored the bill because they strongly believe that legislators needed to take control of the tax debate from the governor's office.

She disputed the $1.6 billion figure, saying the bill never went far enough for legislators to tell how much it would really cost. O'Connell, Tiffany said, has a lengthy record of fiscal responsibility.

"I think it's a sad day when a special interest can use their money against a long-term conservative seated senator and turn her whole 20-year record around with a lie," Tiffany said. "She is absolutely not a tax-and-spender."