Exec labels proposal 'extortion'


Las Vegas Sands President Bill Weidner has joined the chorus of casino executives with a proposal to bail the state out of its current financial crisis without raising gaming taxes: transfer the money generated through hotel room taxes into the general fund and reduce the role of the Las Vegas Convention and Visitors Authority.

If the idea sounds familiar, it is. Las Vegas Sands executives have long advocated privatizing the Las Vegas Convention Center and diminishing the influence of the convention authority, which is funded by room taxes.

The company, which operates The Venetian and is opening the $1.6 billion Palazzo this month, also operates the 1 million-square-foot Sands Expo and Convention Center, which vies for business with the Las Vegas Convention Center.

Weidner said Friday the proposal isn't about getting rid of a competitor. He just doesn't believe Nevada needs additional taxes or a tax increase, and he also believes that the state could make better use of its room taxes dollars, which are projected to exceed $425 million by 2008.

"I don't know why we have this institutional negative view about looking at a tax that is being squandered," Weidner said. "We, as an industry, produce and collect that tax. Yet we don't get any credit for it."

Nevada is facing a budget shortfall of more than $285 million, according to recent projections. MGM Mirage Chairman Terry Lanni and Boyd Gaming President Keith Smith have proposed that the state adopt a broad-based business tax as a way to generate more revenues. Meanwhile, two initiative campaigns are pushing for increases in the gross gaming tax that is paid by large casinos. That tax is 6.75 percent. The state teachers union wants to increase the gaming tax to 9.75 percent, with the proceeds funding increased salaries for educators.

Weidner called raising taxes a knee-jerk reaction to what he believes is a short-term problem. He's opposed to any new business taxes and he called the teachers' tax proposal an "extortion" measure on the state's largest industry.

"I think it's a good advertisement to be known as a low-tax state that tries to keep taxes low for businesses and citizens," Weidner said. "I think it's a mistake to go away from that."

He said divertiing room taxes from the convention authority and into the general fund would add $200 million to $300 million this year. The Las Vegas Convention Center could also charge higher rates and have a larger profit margin if it were owned by a private entity.

Weidner, who said Las Vegas Sands is exploring building a new convention center on land east of its current one, would not be interested in buying the Las Vegas Convention Center.

Convention Authority President and CEO Rossi Ralenkotter defends the current system, which helps fund the convention authority and brings new business to all of the city's hotel-casinos.

He said the agency does not compete with Las Vegas Sands for business. Instead, the organization promotes Las Vegas as a destination for conventions against other large cities, such as Chicago, San Francisco, New York and Orlando, Fla. The authority's 50-year-old business model complements efforts by the hotel industry.

Ralenkotter also opposes selling the convention center to private ownership.

"Our model works at filling rooms," Ralenkotter said. "It's part of the partnership with the hotels. We help get the people to the destination and it's up to the hotels to bring the people to their properties."

In the recent legislative session, Las Vegas Sands executives and Gov. Jim Gibbons proposed taking room tax funds away from the convention authority to help pay for highway construction. In the end, a compromise was reached in which the convention authority agreed to give up $20 million a year over the next 30 years to fund road improvements to Interstate 15 through the resort corridor.

"We showed our willingness to be part of the solution and we think everyone should come together once again to look at these issues," Ralenkotter said.

Weidner said his proposal should generate conversation and draw attention to the state's taxation issues.

"We need to ask the right questions, such as what is it we need to do to make the tax system work," he said.

Lanni also opposes Weidner's efforts to eliminate the convention authority, saying a broad-based business tax is the fairest way to ensure all business entities participate in funding state government.

But he wasn't surprised that Weidner resurrected the room tax proposal.

"I think if you raised the issue of homeland security, (Las Vegas Sands) would bring up eliminating the LVCVA as a solution," Lanni said.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or (702) 477-3871.

 

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