Lanni proposes payroll tax hike

By Liz Benston (contact), David McGrath Schwartz (contact)

Tue, Jun 17, 2008 (2 a.m.)

Reader poll

Opposition to room tax hike building (6-12-2008)
Teachers show how to break through (5-25-2008)
IBTV: Room Tax Proposal (5-23-2008)

Hotel room tax plan raising questions (5-22-2008)
Deal would raise tax on hotel rooms instead of casino handle (5-19-2008)

The chief executive of Nevada’s largest employer Monday proposed doubling the state’s payroll tax to help the state close its ever-growing budget deficit.

MGM Mirage Chief Executive Terry Lanni said increasing the state’s businesswide payroll tax from 0.63 percent to 1.23 percent could generate $246 million a year for the state.

Lanni proposed the increase in what’s known as the modified business tax in lieu of an alternative that is supported by the state’s teachers and a handful of gaming industry giants: that the room tax be increased by 3 percentage points to help pay for teacher salaries and other education costs.

Lanni opposes that plan, saying that earmarking revenue for specific purposes isn’t sound tax policy for a state with ever-changing needs.

He said he would rather the room tax be increased by 2 percentage points — and for the money to go to the state’s general fund, where legislators would decide how to allocate it.

Lanni also wants to divert a portion of the room tax that goes to the Las Vegas Convention and Visitors Authority to the state’s general fund.

The goal of the three moves, combined, would be to generate nearly $800 million for the general fund over two years, closing about two-thirds of the state’s deficit, according to Lanni’s projections.

The balance of the budget shortfall should be closed with cutbacks, he said.

Lanni believes increasing the payroll tax will be an easier sell than previously failed proposals to impose new taxes on the business community, and could also comply with Gov. Jim Gibbons’ “no new taxes” pledge.

“This is a much more practical approach, to take a look at existing taxes” rather than imposing additional ones, he said.

The teachers’ plan to raise room taxes by 3 percentage points would raise an estimated $162 million based on last year’s hotel rates and occupancy levels. Lanni says those assumptions are optimistic because they don’t factor in the decline in room rates and occupancy that has already occurred as a result of the economic slowdown, which will likely boost the state’s budget deficit to at least $1.2 billion.

Some analysts are now estimating that the slowdown will last at least 18 months, perhaps even longer.

The governor has cut $914 million from the budget, and that could rise to nearly $1 billion after next week’s special session, which the governor has called to address the latest budget problems.

The state’s financial strain, which historians say is the worst since the Great Depression, is expected to worsen in 2010 and 2011. For the first time in more than 20 years, the state this year collected less money than in the previous year.

The state teachers union, which has complained that critics of the room tax deal haven’t offered their own solutions, is receptive to considering alternatives.

In the current round of budget cuts, Republican and Democratic leaders have been afraid to touch the idea of raising taxes. The Greater Las Vegas Chamber of Commerce has been adamantly opposed to raising taxes. And though some gaming companies had talked vaguely of a broader business tax, until now no one had revealed a plan as detailed as Lanni’s, which he says already has support from Boyd Gaming Corp.

Harrah’s Entertainment, Wynn Resorts and Station Casinos — which support the teachers’ plan to earmark room tax for education — couldn’t be reached for comment on the tax plan. Legislative leaders also could not be reached for comment on Lanni’s proposal, but have said previously this is not the time to raise taxes.

Ben Kieckhefer, a spokesman for Gov. Jim Gibbons, said the governor “would have a hard time supporting such a proposal, given that many businesses are struggling right now.”

Carole Vilardo, president of the Nevada Taxpayers Association, said the even miniscule-sounding payroll tax raise could be absorbed by big gaming companies but be devastating for small businesses, which are already suffering most in the downturn.

“More than 70 percent of businesses in Nevada employ under 19 people. Those are the ones we see (closing up) right now. This would put more of them out of business,” she said.

Vilardo isn’t thrilled with the teachers’ room tax proposal, either.

“To make tourists pay the tax is great, but what happens when the tourists don’t come?” she said.

Las Vegas Chamber of Commerce spokeswoman Cara Roberts said her organization wasn’t prepared to react to Lanni’s suggestion.

MGM Mirage knocked heads with the Las Vegas Chamber of Commerce in 2003, when a broad coalition of gaming companies pushed for a broad-based business tax in the form of a gross receipts tax, which failed at the hands of anti-tax conservatives and lobbying by nongaming businesses. As a result, MGM Mirage resigned its membership in the Las Vegas Chamber of Commerce, which opposed the plan.

While gaming interests were aligned over the gross receipts plan, the big casino companies — which are divided on the issue of how to raise money for education — aren’t always in agreement on big-picture issues.

Some companies have butted heads over whether to support Internet gambling and even how to combat problem gambling.

Venetian owner Las Vegas Sands has created a rift with other companies by wanting to divert growth in room taxes from the Las Vegas Convention and Visitors Authority, which markets Las Vegas and operates the Las Vegas Convention Center, into the general fund. Lanni says the situation is more dire than it was during the past major tax mess, in 2003. Still recovering from the effects of 9/11, the state projected a $700 million budget deficit but ended up with a surplus in 2005 as the economy, led by tourism, flourished.

“The point is that the state needs more money,” Lanni said. “Are we going to deal with this or cover it up for the next two years until it becomes a problem again? We’ve got a gushing wound. Let’s not try to justify putting a Band-Aid on it.”

Editor's Note: This story has been modified. The original version contained inaccurate numbers for the proposed payroll tax.

Sun reporter Brian Eckhouse contributed to this report.

Discussion: 18 comments so far…

By SPFPAUNIONYES

6/17/08 at 7:29 a.m.

Suggest removal

Maybe J Terrence Lanni should Give Up Some of the Millions of Dollars he and other MGM Mirage Executives Made in their Insider Transactions!

MGM MIRAGE
Insider Transactions

Insider & Restricted Shareholder Transactions reported over the last two years

LANNI J TERRENCE:

MURREN JAMES:

BALDWIN ROBERT:

FELDMAN ALAN:

TRACINDA CORP:

JACOBS GARY N:

JAMES PHYLLIS:

GEBHARDT BRUCE:

WRIGHT BRYAN:

HERMAN ALEXIS:

SELWOOD ROBERT:

WOLZINGER MELVIN:

MATHUR PUNAM:

SANI SHAWN:

MCKINNEY- JAMES ROSE:

D ARRIGO DANEIL:

REDMOND JOHN:

MURPHEY CYNTHIA KISER:

ALJIAN JAMES:

To view the reports press below

http://www.spfpalocal7777.org/MGMMiragef...
By BlueFootTwo

6/17/08 at 8:25 a.m.

Suggest removal

Lovely, as if things arent high enough as it is, stick it to the people a little more. they should send out free tubes of Vaseline with each tax bill!

JT
http://www.FireMe.To/udi
By jfnance32

6/17/08 at 8:48 a.m.

Suggest removal

The Modified Business Tax (MBT) sure does sound like a backdoor income tax.

The effect of MBT is to encourage businesses to suppress wages.
By DavidMorgan

6/17/08 at 10:23 a.m.

Suggest removal

ol·i·gar·chy a form of government in which all power is vested in a few persons or in a dominant class or clique; government by the few.

It is increasingly clear that our so-called "elected leaders" have shirked their responsbility to lead. Instead, they are sitting on the sidelines while our "Captains of Gaming" offer up one state budget funding solution after another, each of which channels those funding burdens onto those least able to shoulder them.

If this approach prevails, it profoundly calls into question whether the citizens of Nevada have the political, intellectual or moral maturity to remain qualified for statehood.
By avatar

6/17/08 at 2:10 p.m.

Suggest removal

Individual taxpayers need to step up to the plate as well. A 4 year Nevada drivers license renewal costs $16.00. That is equivalent to 3 gallons of gasoline. Are you kidding me? Nevada residents can fork over $50.00 per year for the right to drive. I know this hurts poor people, but what tax doesn't??????

How about a minimum fee for auto registrations. $150.00 to register a car- period. I have 3 older cars and only pay $40.00 per year/per vehicle but I drive them on new million dollar highways just like the new cars. This fee would raise revenues and get some of the old junkers off the highway. I know - this hurts poor people but what tax doesn't??????? Maybe the poor could get some kind of exemption?

Start a Nevada state sales tax for education. 1 percent tacked on to every purchase. 1 Penny from each dollar goes to the schools and teachers, not administrators. This would raise millions of dollars and sales taxes are deductible on Federal tax returns.

Businesses already pay taxes on payroll. Leave them alone, they provide jobs! Cut the bloated government and make individuals that benefit from state money (education for example) pay for them.
By mamabear

6/17/08 at 2:23 p.m.

Suggest removal

Lovely! And, also Sheik Lanni is the great corporate citizen with one of the worst track records for hiring illegal aliens. MGM MIRAGE should pay huge fines for their practices that are destroying the quality of life and infrastructure for the rest of Nevadans.

But, oh, I forgot. The laws of the land and Nevada do not seem apply to Sheik Lanni. . . .
By SPFPAUNIONYES

6/17/08 at 3:28 p.m.

Suggest removal

LANNI J TERRENCE: Declared Holdings

Insider & restricted shareholder transactions reported over the last two years

10-Dec-07 *50,000 MGM Sale at $92.45 - $92.73 per share.Proceeds of about $4,630,000)

7-Dec-07 *2,696 MGM Sale at $92.06 - $92.16 per share.(Proceeds of about $248,000)

7-Dec-07 *47,304 MGM Sale at $91.50 - $92.05 per share.(Proceeds of about $4,341,000)

REVENUE EARNED FOR THESE TWO DAYS = $5,799,000

28-Feb-07 100,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $1,274,000)

28-Feb-07 31,400 MGM Sale at $70.85 - $71.13 per share.(Proceeds of about $2,229,000)

28-Feb-07 68,600 MGM Sale at $70.37 - $70.84 per share.(Proceeds of about $4,844,000)

$7,073,000 Minus $1,274,000 = NET PROFIT FOR THE DAY = $5,799,000

16-Feb-07 120,000 MGM Sale at $68.82 - $70.11 per share.(Proceeds of about $8,336,000)

16-Feb-07 120,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $1,529,000)

$8,336,000 Minus $1,529,000 = NET PROFIT FOR THE DAY = $6,807,000

6-Nov-06 440,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $5,606,000)

6-Nov-06 900 MGM Sale at $45.64 - $45.66 per share.(Proceeds of about $41,000)

6-Nov-06 41,500 MGM Sale at $45.26 - $45.62 per share.(Proceeds of about $1,886,000)

6-Nov-06 139,900 MGM Sale at $44.96 - $45.25 per share.(Proceeds of about $6,310,000)

6-Nov-06 125,200 MGM Sale at $44.67 - $44.95 per share.(Proceeds of about $5,610,000)

6-Nov-06 132,500 MGM Sale at $44.36 - $44.66 per share. (Proceeds of about $5,898,000)

$14,135,000 Minus $5,606,000 = NET PROFIT FOR THE DAY = $8,529,000

GRAND TOTAL OF J , TERRANCE LANNI MGM MIRAGE INSIDER & RESTRICTED SHAREHOLDER TRANSACTIONS REPORTED OVER THE LAST TWO YEARS

$30,354,000 Million Dollars

Indicates that some (or all) shares are held indirectly (e.g. in a trust, by a spouse, etc.)
Source: http://biz.yahoo.com/t/66/4197.html
By SPFPAUNIONYES

6/17/08 at 3:35 p.m.

Suggest removal

MURREN JAMES: President of MGM MIRAGE Declared Holdings:

Insider & restricted shareholder transactions reported over the last two years

4-Mar-08 150,000 MGM Option Exercise at $6.66 per share. (Cost of $999,000)

4-Mar-08 *150,000 MGM Acquisition (Non Open Market) at $0 per share.

4-Mar-08 150,000 MGM Disposition (Non Open Market) at $0 per share.

20-Feb-08 6,000 DPTR Acquisition (Non Open Market) at $0 per share.

6-Dec-07 50,000 MGM Option Exercise at $6.66 per share. (Cost of $333,000)

6-Dec-07 *21,500 MGM Disposition (Non Open Market) at $90.92 per share.(Value of $1,954,780)

6-Dec-07 22,600 MGM Sale at $91.01 - $91.61 per share.(Proceeds of about $2,064,000)

6-Dec-07 27,400 MGM Sale at $90.56 - $90.94 per share.(Proceeds of about $2,487,000)

2-Nov-07 50,000 MGM Option Exercise at $6.66 - $6.66 per share.(Cost of about $333,000)

2-Nov-07 6,700 MGM Sale at $90.39 - $90.47 per share.(Proceeds of about $606,000)

2-Nov-07 43,300 MGM Sale at $90 - $90.38 per share.(Proceeds of about $3,905,000)

4-Sep-07 100,000 MGM Option Exercise at $6.66 - $6.66 per share. (Cost of about $666,000)

4-Sep-07 20,400 MGM Sale at $84.16 - $84.32 per share.(Proceeds of about $1,718,000)

4-Sep-07 79,600 MGM Sale at $83.90 - $84.15 per share.(Proceeds of about $6,688,000)

20-Jun-07 *21,504 MGM Disposition (Non Open Market) at $0 per share.

20-Jun-07 *21,504 MGM Acquisition (Non Open Market) at $0 per share.

14-Jun-07 *26,180 MGM Acquisition (Non Open Market) at $0 per share.

14-Jun-07 *26,180 MGM Disposition (Non Open Market) at $0 per share.

15-Mar-07 100,000 MGM Option Exercise at $6.66 - $6.66 per share. (Cost of about $666,000)

15-Mar-07 62,900 MGM Sale at $67.58 - $67.84 per share.(Proceeds of about $4,259,000)

15-Mar-07 37,100 MGM Sale at $67.85 - $68.08 per share.(Proceeds of about $2,522,000)

8-Nov-06 *4,500 MGM Disposition (Non Open Market) at $45.09 - $45.09 per share.(Value of about $203,000)

7-Nov-06 100,000 MGM Option Exercise at $6.66 - $6.66 per share. (Cost of about $666,000)

7-Nov-06 100,000 MGM Sale at $45 - $45.01 per share.(Proceeds of about $4,501,000)

Indicates that some (or all) shares are held indirectly (e.g. in a trust, by a spouse, etc.)

Source; http://biz.yahoo.com/t/71/6084.html
By SPFPAUNIONYES

6/17/08 at 3:43 p.m.

Suggest removal

BALDWIN ROBERT: Director/Officer -Chief Design and Construction Officer,
MGM MIRAGE -President and CEO – CityCenter Declared Holdings:

Insider & restricted shareholder transactions reported over the last two years

14-Dec-07 19,013 MGM Option Exercise at $12.74 per share. (Cost of $242,225)

14-Dec-07 19,013 MGM Sale at $89.01 - $89.33 per share.(Proceeds of about $1,695,000)

13-Dec-07 139,300 MGM Option Exercise at $12.74 per share. (Cost of $1,774,682)

13-Dec-07 54,180 MGM Sale at $89.94 - $90.26 per share.(Proceeds of about $4,882,000)

13-Dec-07 85,120 MGM Sale at $89.55 - $89.93 per share.(Proceeds of about $7,639,000)

12-Dec-07 111,100 MGM Option Exercise at $12.74 per share. (Cost of $1,415,414)

12-Dec-07 44,900 MGM Sale at $90.25 - $90.96 per share.(Proceeds of about $4,068,000)

12-Dec-07 66,200 MGM Sale at $90 - $90.35 per share.(Proceeds of about $5,970,000)

11-Dec-07 113,400 MGM Option Exercise at $12.74 per share. (Cost of $1,444,716)

11-Dec-07 23,267 MGM Sale at $91.39 - $91.64 per share.(Proceeds of about $2,129,000)

11-Dec-07 33,033 MGM Sale at $90.85 - $91.38 per share.(Proceeds of about $3,010,000)

11-Dec-07 57,100 MGM Sale at $90.50 - $90.84 per share.(Proceeds of about $5,177,000)

30-Aug-07 250,000 MGM Option Exercise at $12.74 - $12.74 per share. (Cost of about $3,185,000)

30-Aug-07 98,308 MGM Sale at $83 - $83.41 per share.(Proceeds of about $8,180,000)

30-Aug-07 7,400 MGM Sale at $83.15 - $83.18 per share.(Proceeds of about $615,000)

30-Aug-07 63,905 MGM Sale at $83.07 - $83.15 per share.(Proceeds of about $5,311,000)

30-Aug-07 34,857 MGM Sale at $82.95 - $83.07 per share.(Proceeds of about $2,893,000)

30-Aug-07 36,292 MGM Sale at $82.63 - $82.94 per share.(Proceeds of about $3,004,000)

30-Aug-07 47,961 MGM Sale at $82.39 - $82.62 per share.(Proceeds of about $3,957,000)

30-Aug-07 53,239 MGM Sale at $82.11 - $82.38 per share.(Proceeds of about $4,379,000)

Insider & restricted shareholder transactions reported over the last two years

Source: http://biz.yahoo.com/t/60/6637.html
By SPFPAUNIONYES

6/17/08 at 3:51 p.m.

Suggest removal

6-Nov-06 100,000 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $1,666,000)

6-Nov-06 2,500 MGM Sale at $44.97 - $45.02 per share.(Proceeds of about $112,000)

6-Nov-06 97,500 MGM Sale at $44.90 - $45.24 per share.(Proceeds of about $4,394,000)

19-Jun-06 37,830 MGM Disposition (Non Open Market) at $0 per share.

19-Jun-06 *37,830 MGM Acquisition (Non Open Market) at $0 per share.

Indicates that some (or all) shares are held indirectly (e.g. in a trust, by a spouse, etc.)

Source: http://biz.yahoo.com/t/57/4139.html
By SPFPAUNIONYES

6/17/08 at 3:53 p.m.

Suggest removal

JACOBS GARY N: Director/Officer Executive Vice President, General Counsel and Secretary MGM MIRAGE - Declared Holdings:

Insider & restricted shareholder transactions reported over the last two years

10-Dec-07 25,000 MGM Option Exercise at $16.66 per share. (Cost of $416,500)

10-Dec-07 25,000 MGM Sale at $92.45 - $92.58 per share.(Proceeds of about $2,313,000)

7-Dec-07 25,000 MGM Option Exercise at $16.66 per share. (Cost of $416,500)

7-Dec-07 3,300 MGM Sale at $91.26 - $91.4 per share.(Proceeds of about $301,000)

7-Dec-07 21,700 MGM Sale at $91 - $91.25 per share.(Proceeds of about $1,977,000)

1-Nov-07 50,000 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $833,000)

1-Nov-07 7,750 MGM Sale at $90.86 - $91.15 per share.(Proceeds of about $705,000)

1-Nov-07 15,300 MGM Sale at $90.27 - $90.6 per share.(Proceeds of about $1,384,000)

1-Nov-07 26,950 MGM Sale at $90.61 - $90.85 per share.(Proceeds of about $2,445,000)

24-Aug-07 50,000 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $833,000)

24-Aug-07 26,100 MGM Sale at $82.79 - $83.04 per share.(Proceeds of about $2,164,000)

24-Aug-07 23,900 MGM Sale at $82.50 - $82.78 per share.(Proceeds of about $1,975,000)

2-Jul-07 987 INTG Acquisition (Non Open Market) at $0 per share.

29-Jun-07 600 INTG Acquisition (Non Open Market) at $0 per share.

20-Jun-07 *9,594 MGM Acquisition (Non Open Market) at $0 per share.

20-Jun-07 *9,594 MGM Disposition (Non Open Market) at $0 per share.

19-Jun-07 *9,594 MGM Disposition (Non Open Market) at $0 per share.

19-Jun-07 *9,594 MGM Acquisition (Non Open Market) at $0 per share.

1-Mar-07 50,000 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $833,000)

1-Mar-07 9,300 MGM Sale at $70.54 - $70.7 per share.(Proceeds of about $657,000)

1-Mar-07 40,700 MGM Sale at $70.25 - $70.52 per share.(Proceeds of about $2,865,000)

20-Feb-07 97,900 MGM Sale at $69.75 - $69.96 per share.(Proceeds of about $6,839,000)

20-Feb-07 97,900 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $1,631,000)

16-Feb-07 2,100 MGM Sale at $70 - $70.29 per share.(Proceeds of about $147,000)

16-Feb-07 2,100 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $35,000)

27-Nov-06 50,000 MGM Option Exercise at $16.66 - $16.66 per share. (Cost of about $833,000)

27-Nov-06 16,300 MGM Sale at $54.66 - $54.96 per share.(Proceeds of about $893,000)

27-Nov-06 33,700 MGM Sale at $54.08 - $54.65 per share.(Proceeds of about $1,832,000)
By AngryPostman

6/17/08 at 4:05 p.m.

Suggest removal

Maybe we should just apply the sales tax to insider stock sales.
By thebs

6/17/08 at 4:47 p.m.

Suggest removal

I think we should tax union organizers who are poor losers and post irrelevant comments on newspaper websites.

The union voted, dude. You lost. Take your crazy somewhere else, please.
By redstater412

6/17/08 at 6:02 p.m.

Suggest removal

why not try cutting spending for a chance. what idiot wants to raise taxes in the middle of a recession and high inflation.
By UNLVStud

6/17/08 at 7:43 p.m.

Suggest removal

Both increases sound like a prudent move to do. Tourists pay the increase on the room taxes, which shouldn't be objectionable to Nevadans. I can't believe corporations only pay 0.63%! Obviously they can afford to pay their fair share to help pay for the services they benefit from (such as education so they have an educated workforce).

I agree that all the leadership right now is being show by the captains of business. (Lanni, Rogers) Why can't Adleson pull his puppet strings on the Luv Guv better and demonstrate his leadership too?
By jfnance32

6/17/08 at 10:25 p.m.

Suggest removal

All corporations pay significant taxes in the state.

They all pay sales taxes if they purchase goods, property taxes, Modified Business Tax (aka Payroll tax), a Gross Revenue tax to local city/county governments and various fees and special taxes.

It is not like they zero taxes.

Gaming does pay a higher tax, but they are getting a privilage for having a business that sometimes takes advantage of stupid people and generally is cash machine.

I think that we should take money from the water authority, the new health university buildings, convention authority and postpone the COLA for education staff before raising taxes.

Then if we must raise taxes lets raise the hotel tax.

I prefer not to hit businesses with a tax increase since many are struggling to keep from laying off their own employees.

I prefer to layoff state employees before we layoff private employees.
By DavidMorgan

6/17/08 at 10:38 p.m.

Suggest removal

While major casino moguls continue to propose this budget fix or that, and while our political leadership in Carson City goes nearly invisible, state lawmakers are headed back to the Capital City to figure out what little political sanity may still be salvageable. It’s the state’s worst budget crisis in modern times that has found our elected leaders AWOL and our state-saving revenue still under the control of Nevada’s gaming elite. But in fact, those “Emperors of Gaming” have no intention of turning-over even a small portion of their diabolical mega-fortunes that they’ve been stacking up at record levels at banks and investment and gaming properties around the world.

Next week Alice again falls down the stump hole and peers through the looking-glass at a surrealistic political drama playing out at 5th and Carson where the phrase “no new taxes” translates into “off with their heads.”
By united777

6/18/08 at 7:01 a.m.

Suggest removal

Here is an even better idea Mr. Lanni, since you are now the Mr. Fixit of Nevada....sell your helicopter, and maybe one or two of your limos, and donate roughly 50% of your nine figure income to the state, and that should take care of the budget deficit. This from a man who makes his money, emptying the wallets of tourists with his ever so tight slot machines. Another one who just contributes so much to society and the good of Nevada. And keep hiring those illegals, since I am sure your wife doesn't want to break a nail doing laundry or dialing the phone, and I am sure you need even more yard help as well...If Bloomberg and others can forego salaries in tough times to set an example, and join the troops so to speak, what makes this putz so special and different ??? The next time a casino boss comes up with an idea like this, call a doctor, give him a few aspirin and have him lie down. I am sure the idea will pass like gas quickly.........