ON SHAKY GROUND

David McGrath Schwartz

Friday, Oct. 19, 2007 | 7:35 a.m.

Voters might love to raise the gaming tax to pour more money into classrooms.

But elected officials have been fleeing from the teachers' proposal like it was a rat on fire.

There are legitimate arguments why this proposal by the Nevada State Education Association is not sound public policy. Grand philosophy aside, pragmatic politicians are also unwilling to duel with gaming, the 8,000-pound gorilla in Nevada politics.

Only a handful of legislators during the past decades have dared to get in gaming's face. And just look at what happened to them.

Committee chairmanships got stripped. Districts got unfavorably gerrymandered. Hundreds of thousands of dollars got funneled to opposing candidates.

This may be why teachers are finding no political allies with their tax proposal. When you cross gaming, Nevada's most influential lobby, you pay.

Take Ann O'Connell, a state senator for 20 years. In 2003 she opposed a bill favored by gaming. In 2004, when she stood for reelection, gaming invested hundreds of thousands of dollars toward her defeat.

"It's wrong for one industry to be able to control things," she said. "Representative government is thrown out the window when you are in a company-run town, which is what we have here."

No wonder politicians don't want to confront the gaming industry, historian Michael Green says: "Nobody wants to waltz into a buzz saw."

Legitimate arguments exist as to why legislators have not jumped on board with the teachers.

Jim Ferrence, a political consultant, said the effect of raising the gaming tax by 3 percentage points, from 6.75 percent to 9.75 percent is unknown.

Billy Vassiliades, a political consultant for gaming companies, presented the common complaint that Nevada is already too dependent on gaming and needs a broader tax base. Raising taxes through an initiative, particularly based on what is most popular with voters, is not good policy, he said.

He correctly pointed out that other groups, particularly labor unions, have used their influence to elect and defeat politicians.

But there is no doubt about which is the most influential group in the state.

In 2003, Sen. Ann O'Connell moved in committee to kill a broad tax on businesses that had been the top priority for gaming during the session.

"I had a poster on my door that said, 'Ask me what gaming has in store for you,' " she said. Her answer: that gaming wanted to reduce its own tax burden.

Then came the 2004 election.

She said she was cut off from the gaming "faucet," as she calls it - the large Strip campaign donors that can fill campaign chests. Her opponent, Joe Heck, had plenty of money, much of it coming from Strip companies. Citizens for Fair Taxation also came to his support with $330,000, almost all of it in large checks from casino companies, including $50,000 from the Nevada Resort Association.

With that money O'Connell was painted as a tax-and-spend liberal, an odd image for the Republican veteran who had forged her credentials as a conservative anti-tax proponent.

"I'll tell you, they do play hardball," she said.

The 20-year incumbent lost to first-time candidate Heck, 48 percent to 52 percent.

Sen. Joe Neal was elected in 1972 and from the start was a burr in gaming's side, pushing ballot initiatives to raise the gaming tax. He campaigned on that platform in his runs for governor. He won more headlines than support, even failing to win over the Nevada State Education Association.

In the early days, casinos would put out election-season score cards, he said. A green dot by your name meant you were friendly. A yellow was neutral. A red meant "not so good," he said.

He always got the red dot.

Gaming, he said, had regularly tried to run candidates against him. But he had name recognition and credibility in the community. Gaming interests also tried redistricting, adding neighborhoods where voters didn't know him.

Neal kept on winning.

In 2000, he came close to getting unseated. He said gaming contributed about $500,000 to his opponent . Neal avoided a runoff by topping the 50 percent mark by six votes.

He served until 2004, retiring after the bitter 2003 legislative session where, he said, he "really went after gaming."

He said he helped get casinos to agree to increase the gaming tax by 1/2 a percentage point.

"I'm disappointed because legislators seem not to understand that once you get in the political arena, people elect you for a reason," he said. "You're supposed to represent them. A lot of people just side with special interests and do their bidding."

During the 1985 Legislature, Sen. Don Mello took up the call and tried to raise the gaming tax.

And he wondered where his colleagues went.

"When you're talking about raising the gaming tax, people tend to walk on the other side of the hall when they see you," he said.

So after failing in the Legislature, he drew up a ballot initiative to increase the gaming tax by 2 percentage points.

Gaming agreed to increase its tax by 1/2 a point.

Good thing, he said, because he didn't think he had a chance to collect enough signatures.

"It was probably 100 percent a bluff," Mello said. "The teachers wouldn't help me; the senior citizens wouldn't help. No one. When you look at the fact that no one is coming to you, even if you've earmarked money for them, then that's pretty bad."

He survived reelection opponents who he said were staged by casinos, but said he had other concerns.

"Noted people" - one in state government and one in gaming - "suggested that I may be physically harmed by trying to raise the taxes on gaming," Mello said. He refused to identify them, lacking proof and fearing a lawsuit.

He found himself isolated in the Legislature, and he attributed that to the dependence of many lawmakers on casinos to win elections.

"My colleagues were not willing to talk about it," he said. "You have to remember who is the biggest contributor to campaigns in this state."

Bob Price was elected to the Assembly in 1974 and served for 28 years. But even if he couldn't be unseated until 2002, after his seat was redistricted, that doesn't mean he didn't feel the sharp end of the stick.

In 1989, he suggested that gaming companies not be allowed to contribute to political campaigns because the business is regulated by the state. Atlantic City had a similar ban.

For his suggestion, he got stripped of his chairmanship of the influential Nevada Tax Commission.

"All I wanted was a discussion on whether it was proper for gaming to be contributing to campaigns," he said. "The Democratic leadership was influenced by gaming."

Price, who famously took educational tours of Nevada's brothels and drafted an Assembly resolution declaring Las Vegas and the capital as an embassy for visitors from outer space - lost his reelection run in 2002.

He doesn't blame his loss on casinos' influence. But he does say that legislators always had to think about not making gaming mad.

"How can you run a campaign without gambling contributions?" he said. "That's the mind-set in Nevada."

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