Wynn Champions New Room Tax as Alternative to Casino Tax Increase
Eager to avoid the imposition of higher casino tax rates, Steve Wynn and other Nevada casino operators have devised an alternate plan to raise taxes on hotel rooms. The plan may have the Governor's blessing, if his constituency shows their support.
The Nevada State Education Association, the union that represents teachers, has been circulating a petition that calls for an increase in the state casino tax rate from its current 6.75% to 9.75%, a move that would generate at least $250 million annually. The casino industry has fought the issue strenuously, both in court and politically.
Wynn, Governor Jim Gibbons, and Senate Majority Leader Bill Raggio met to discuss the possibility of avoiding the raise in casino taxes by instead raising the room tax. This would generate tens of millions, but not approach the sum a casino increase would cause.
However, room taxes are passed along to occupants, mostly out-of-state tourists. Casino profits would be untouched. Gibbons suggested he might support the plan, but wants to make sure it would not be considered a renege on his promise to voters to not raise taxes on them.
A spokesman for Gibbons said the Governor would prefer to put the question on the ballot as an advisory, allowing voters to indicate whether they object to visitors paying a higher tax. The teachers' union has also held negotiations with casino industry representatives in regard to a room tax increase.
While indications are that the education initiative raising the casino rate would pass if placed on the ballot, there are several large obstacles in the way of the proposal becoming law. As it would be a constitutional amendment, first almost 60,000 signatures must be collected by May 20th to earn a ballot spot. Then the bill must pass the general election this fall, and then again in 2010 to become permanent law. In the meantime, casino lawyers continue to file appeals to get the petition dismissed.
Still, it seems likely that the public might be better served by the casino tax. Nevada's state casino tax is the lowest in the nation; some states have rates as high as 50%. Perhaps the megacasinos could spare a few million from their billions of income, rather than pass the buck to tourists once again.
