Judge tosses out gaming tax hike initiative

By David McGrath Schwartz

Wednesday, April 11, 2012 | 4:18 p.m.

CARSON CITY — Never bet against the casinos.

A Carson City judge tossed out today an initiative that would raise the gaming tax on the state’s largest casinos, a win for the Nevada Resort Association that puts proponents of the initiative back at square one.

Monte Miller, the conservative businessman backing the legislative initiative as well as a constitutional one that targets mining, said he will refile the petition with the Nevada secretary of state.

In a ruling from the bench, District Court Judge James Todd Russell found the description of the impact of the “Nevadans for a Fair 9% Gambling Revenue Tax” submitted by its backers to be misleading. He pointed to technical errors in the description of the proposal included on the pages being circulated by signature gatherers:

• Proponents described the casinos that would be affected as having “unrestricting” gaming licenses. The technical term is “nonrestricted.”

• It describes the tax as on “gross revenues” of casinos, instead of “gross gaming revenue.”

• It said it would affect manufacturers and distributors, when those would not be affected.

“The court can’t totally re-write the description of effect,” Russell said.

Matt Griffin, an attorney for the Nevada Resort Association, said that initiative backers acknowledged in a brief that it should make changes. That, Griffin argued, meant that they had to start over, and be subject to further legal challenges.

Maggie McLeatchy, attorney for Nevadans for a Fair 9% Gambling Revenue Tax, said it had suggested changes to the description to avoid further legal challenges.

“Obviously, this is to exploit the process — to file as many challenges as possible and drag this out,” she said after the hearing. “Our interest is in trying to get this in the hands of the voters.”

Miller, a conservative who has opposed taxes in the past, has said the underlying motivation for his gaming and mining initiatives is to halt a competing business profits initiative, which labor groups have been working on.

Miller offered to drop his gaming and mining tax initiatives if those industries committed to not supporting labor’s initiative effort, but said Wednesday he has not heard from the gaming industry.

Miller said he had only collected about 500 signatures. He needs 73,000 by Nov. 13 to qualify his initiative, which would change state law. It would first go to the Nevada Legislature in 2013. If it didn’t pass there, it would go to the ballot.

For the mining initiative, which calls for a change to the constitution, the deadline to submit those signatures is June 19. To become part of the constitution, it would have to pass in November and then in 2014.