Friday, Feburary 07, 2003
Copyright © Las Vegas Review-Journal

SHOULD THE GAMING TAX BE RAISED TO SOLVE NEVADA'S REVENUE CRISIS?

YES: Don't let casinos off the hook

A 4-point increase in the gambling tax would erase the deficit ... without taxing us all

The silence of the cows continues to deafen. With the exception of an Associated Press story in which MGM-Mirage mogul Terry Lanni screamed like a stuck -- albeit fatted -- calf, Reno Gazette-Journal reporters on Sunday and Monday ignored even mentioning an increase in the gross gaming tax as a cure for the state's budget problem.

Worse, a Gazette-Journal poll on how Reno residents feel about taxes -- conducted with a local TV station -- didn't even ask the question.

Zounds.

Nevada is a company cow town and no one dares udder a word otherwise. Polls by the Review-Journal and the University of Nevada, Reno have for years shown that about two of every three Nevadans favor a gaming tax hike.

The same silence held true, though, in a recent edition of the Northern Nevada public affairs television show "Nevada Newsmakers." My colleagues Sam Shad and Andrea Engleman played two segments of an interview with Gov. Kenny Guinn, then cut to three compliant pundits. Once again, the lambs were silent about the sacred cow. Not a word about the gaming tax.

Gov. Guinn told Shad and Engleman that he got "not one single suggestion from the Legislature or any other group besides the task force."

That's Gov. Guinn's committee handpicked to rubber-stamp the gambling industry's tax plan. A couple of weeks ago, I crunched the numbers and found how the gamblers will be paying basically zero under the creative accounting and tax credits called for by the task force.

This at least has not gotten past the state's more outspoken conservatives. (See the latest edition of Electric Nevada, www.electricnevada.com.) No less than the right-wing Nevada Policy Research Institute (www.npri.org) has taken notice of the Nevada Commission on Economic Development study published during the first Guinn-Hunt administration which torpedoed the gambling industry's claim -- offered in a casino-backed study by Arthur Andersen -- that increasing "economic diversity" is the reason the state is upside down financially. The NCED study instead points the finger where it belongs -- the wholesale creation of low-wage, gambling industry jobs which allow casinos to privatize profit while socializing risk.

For Gov. Guinn to say no one has come forward with an alternative plan divorces the debate from reality faster than a Reno justice of the peace who's late for golf.

As I vaguely recall, a coalition of business types -- including the Las Vegas Chamber of Commerce and the Nevada Manufacturers Association -- presented an alternative plan. The governor and the gamblers may not like the proposal, but it really, really exists.

State Sen. Joe Neal's freshly updated Web site (www.joeneal.org) is loaded with five years' worth of endorsements of a gaming tax hike from individuals, media commentators and public officials. More are available at www.nevadalabor.com/cop/cophome.html.

Gov. Guinn is certainly aware of the plan from non-gambling businesses. He told Shad and Engleman that its service tax component would place a levy on a mother who takes her child for a haircut.

Yet he failed to mention that the gambling industry's plan for a regressive universal sales tax (aka the gross receipts tax) would tax health care and re-impose a tax on groceries. As businesses raise their prices to compensate for the increased taxation, sales taxes will also increase, as a tax is imposed upon a tax.

Right now, lesser lobbies are being forced to choose sides between the gamblers and the non-gamblers. Gambling lobbyists are reaching out to medium-sized businesses by offering a little old-fashioned legislative logrolling. The gamblers are dangling a carrot -- casino support for legislation desired by weaker, less-organized business interests -- in exchange for endorsement of the Guinn/gambler tax plan.

That's a positive development. It means that while gambling's power ain't broke, it's badly bent. The elephant in the living room needs help cleaning up the mess before somebody is impolite enough to say something.

Let's be rude, dammit!

The missing piece of the tax debate puzzle is a substantial hike in the world's lowest gross gaming tax. Gov. Guinn says no support exists for that or any other plan besides that of the gambling industry. Not so.

He asked for it. Let's accommodate him.

Please let me know you support raising the gross gaming tax for the first time in 16 years. A 4-percentage-point hike, progressively targeted at the state's largest, most profitable casinos, would erase the state's deficit. And everything casinos pay on the state level is a fully deductible expense on a federal income tax return.

If you ever wanted to sock it hard to the IRS, here's your chance.

Join Casinos Out of Politics (COP) by sending me your name, city and county of residence. Let me know if I can publish your name at the statewide COP Web site.

While I appreciate the anonymous support of anyone employed by or doing business with the gambling industry, I advise you to not allow your names to be used. When Sen. Neal circulated a petition to raise the gross gaming tax a couple of years ago, casino workers were told by their bosses that any employee whose name appeared on a petition would be fired. I consider such intimidation illegal, but it worked. The factory in the company town is good at stomping the worker bees.

Stomp back. Help me build a statewide network of people willing to write, call, fax, lobby and generally raise a ruckus.

If you don't, you'll get stuck with the bill. Part of the gambling industry plan is a 5 percent, $100 million hike in property taxes. Unlike a casino, homeowners and renters can't apply for a property tax cut whenever business slacks off.

You have a choice. You can be a lamb maintaining the silence of the sacred cows. Or you can ... raise hell.

Andrew Barbano (barbano@frontpage.reno.nv.us) is editor of www.NevadaLabor.com and www.JoeNeal.org. He writes from Reno.