Wednesday, May 9, 2007 | 7:21 a.m.
CARSON CITY - The road to the Las Vegas Strip often is paved with good intentions, which are then transmogrified into cash by the executive alchemists who work on that storied boulevard.
In this version, with the help of regulators implementing legislative policy and lobbyists trying to influence those regulators, the goal to go green has been turned into a different kind of green by casinos that have discovered their environmental sides.
Here is the distilled version: Legislation passed two years ago to encourage environmentally friendly buildings has been turned into a potential financial bonanza by major casino and business players who have exploited - and actually helped create - loopholes with the assistance of laissez faire regulators. Their gain is the state's loss - those taxes would go primarily to schools.
"It's surprising to me that something this significant (the 2005 law) doesn't seem to have a clear path and didn't have clear regulations promulgated by the Tax Commission," said Assemblywoman Debbie Smith, who along with her colleague, Marilyn Kirkpatrick, have been working into the early morning hours to reconstruct what happened since the measure was passed two years ago and then suspended by lawmakers last week when the financial impact became clear.
Actually, the regulations passed last year were crystal clear in their intentional opaqueness. Transcripts of Tax Commission deliberations from last June indicate that Executive Director Dino DiCianno wanted the panel to adopt a "bright line" for the standard to grant the tax break. But the commission instead voted to make it as vague as possible, insisting that companies only show "a substantial intent during the window of the statute to comply with the statute."
That came after presentations by lobbyists who argued for the watered-down regulation, some of whom had clients with billion-dollar projects pending on Las Vegas Boulevard South. And who can blame them? If you were in the casino business, wouldn't you jump in your gondola to make sure the tax break doesn't become a mirage? The debate over whether these are good corporate citizens, who want, for instance, to make the Emerald City even greener, is moot here.
That loose regulatory standard, a pattern discovered by Smith and Kirkpatrick, surely helped cause the rush to apply for the tax breaks, some of which they think may be questionable based on the legislation's intent.
It is this kind of confusion, exacerbated by at least three state agencies involved in the approval process, that ostensibly has caused Gov. Jim Gibbons to issue a veto threat. Gibbons should be worried about which applications might be valid and which might be nullified by the panic bill lawmakers passed last week.
Some will caricature Gibbons as doing the bidding of his casino masters. The governor chatted with MGM Mirage boss Terry Lanni last week , and Las Vegas Sands boss Sheldon Adelson, whose agenda often seems to be the same as the governor's, sent a limo full of his aides to the capital this week and they discussed the issue with Gibbons.
But whatever influence has been brought to bear, it's hard to argue the governor is wrong to consider a veto after the suspension bill whooshed through the Legislature in 24 hours, without a real hearing. It's his job to step back and consider the impact if any of these major players were to sue the state, just as lawmakers perhaps should not have been mimicking Claude Rains last week when they seemed flabbergasted by the fiscal impact of the tax breaks that could run over $1 billion.
In July of last year, another agency involved, the Commission on Economic Development, issued a "Notice of Adoption of Proposed Regulation" that clearly stated the potential cost. "This will create an impact on tax revenues collected by counties, and could negatively impact county-funded services such as schools, police prosecution, health and safety," the notice said.
That was almost a year ago, and even earlier DiCianno had raised red flags. The lack of coordination here - among lawmakers and the governor, legislators and regulators - seems clear.
But the fingerpointing, too, now becomes moot. As Smith put it, "This is big stuff. The policy is big and the money is big."
Alas, the progressive policy is being left behind by the intrigue. And as entertaining as all these machinations may be, the financial impact of 2005's good intentions, thanks to a loosely written law and the unseen hand of powerful regulators prodded by special interests, will be felt well beyond the Las Vegas Strip.
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