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November 22, 2014

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Gaming, mining open to paying more to close state budget gap

Public policy by desperation,’ lobbyist calls it

Sun Coverage

Lawmakers are looking at raising fees on gaming by $32 million per year to cover the cost of regulating the state's leading industry. It's another way to help close the state's $887 million budget gap.

Speaker Barbara Buckley told the state Gaming Control Board chair today to evaluate raising its fees so all agency costs are covered by fees. She said cuts to education and cuts to the most vulnerable Nevadans are unacceptable.

Buckley said she believes the solution to closing the budget hole is "everyone stepping up. To me, it will take a little bit of everything because we all care about the future of the state. That's the roadmap to follow," she said.

Additionally, she and Senate Majority Leader Steven Horsford, D-Las Vegas, said mining must be part of the solution.

Pete Ernaut, a lobbyist for the Nevada Resort Association, said Tuesday that the industry is in discussion with legislative leadership about raising fees, but has not taken a position on the fees yet.

"We understand how difficult this problem is," Ernaut said. "We understand that this is public policy by desperation."

If the Legislature moves forward with increasing fees on gaming, the industry would join mining as being asked to help make up the state's budget shortfall.

Mining

Gov. Jim Gibbons proposed increasing the amount mining pays by $50 million over two years by reducing deductions the industry takes on its mining tax.

That idea has been met coolly by legislators, who are looking at one-time fees.

Ernaut, who also represents the Nevada Mining Association, and mining lobbyist Jim Wadhams told the Legislature's Interim Finance Committee today that they opposed Gibbons' plan, but were willing to help close the state's budget hole.

"I'm sitting here today, saying mining will support this state and try to help this state through this current fiscal crisis," Ernaut said. "We understand the depth and understand the problems facing the Legislature and governor."

Ernaut said the industry is willing to pay more in fees, pre-pay some taxes and readjust the amount of taxes it expects to pay. Sen. Bill Raggio, R-Reno, said he didn't support pre-paying taxes.

"We have an immediate problem. But in the back of our mind, lurking, we're looking at a problem four times as big" in 2011, he said. Horsford said he agrees with Raggio about prepaying taxes.

Ernaut, asked how much mining was willing to contribute, said it would amount to $100 million.

Gaming

Gaming Control Board Chairman Dennis Neilander said that under 10 percent cuts proposed by Gibbons, the regulatory body would lay off about 31 people, out of its staff of about 400.

He said it would "absolutely" impact its ability to regulate the industry effectively.

"It will delay time it takes to respond to calls, delay time for the bodies to meet, delays in audits," he said.

Neilander compared Nevada's regulatory body for gaming to New Jersey's, which has about 800 regulators -- twice what Nevada has -- and is completely supported by industry fees. Nevada's regulators are mostly supported by general fund tax revenue.

Sen. Bob Coffin, D-Las Vegas, laid out the risks of moving to a system based more on fees. He said increasing fees can discourage new companies from entering the market.

"We don't want the industry to become static," he said.

But Buckley asked Neilander, who declined to take a policy position on moving to a fee-based system, to prepare a report about the impact of undoing the 31 layoffs.

Ernaut referred questions about the industry's position on new fees to Bill Bible, president of the Nevada Resort Association. Bible didn't immediately return a call for comment.

Lynn Hettrick, Gibbons' deputy chief of staff, said the governor would be open to raising fees as long as the industry supports the increase.

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