Casino Connection Nevada

Petitions, Initiatives and Taxes, Oh My

Why targeting one industry is a bad idea

by Bill Bible

As you read the newspaper or watch your local news, it is hard to avoid the issue of petitions proposing to increase gaming taxes to exclusively pay for state services, including teacher pay. I wrote last month about how it would be better tax policy to spread the burden of public education and government services across various taxpayers rather than targeting one. In this column I will address why gaming has been targeted.

It can be explained in two words: public polling.

Essentially these petitioners did a poll and figured the easiest tax to pass would be an increase in the gross gaming tax. There were no economic analysis or studies done to determine the economic impact on the industry or on the state. There was no consideration given to potential job loss, investment loss or impact on struggling properties. It was simply determined to target the industry by a poll.

I am sure the pollsters did not tell the survey participants that a 3 percent increase in the gross gaming tax rate is really a 44 percent increase in the taxes paid by the gaming industry. And, I am also sure no one was told how gaming and resorts already fund more than $1 billion annually to public education or that the industry pays nearly 50 percent of the state budget.

I also suspect they didn’t indicate virtually every public official in the state, major newspaper, union, business and education official in the state opposes solely increasing the gross gaming tax to fund public services. I suspect they didn’t explain that non-resident businesses conduct business in the state but don’t pay corporate income tax in Nevada. I suspect they didn’t explain that relying even more on one source for funding would result in an even more unstable education budgeting system. I also suspect they didn’t tell those who were polled that these petitions are calling for the largest tax increase in Nevada’s history.

Funny thing about polling is that you don’t have to explain the questions, you just have to ask the questions. And when the teacher’s union asked Nevadans about education funding, nearly 3-to-1 said they would support increasing gaming taxes to support education.

What is important to remember is that nothing lives in a vacuum. Increasing taxes on gaming does not solve the ultimate problem. Nevada’s tax and budget system already relies too much on a single industry: gaming. Without a dramatic change in the way we approach tax policy and the financing needs of state government, we could very well cripple the industry that drives so much of the state’s economy and provides us with meaningful jobs with good benefits.

In the coming months we will be working hard to inform Nevadans on why these petitions are dangerous and ill-conceived. As ambassadors of the industry, your help will be very much needed in relaying the facts so all Nevadans are informed on the issue and ultimately make the right choice for our future.