CARSON CITY -- Teachers union executives said Thursday that they will begin circulating petitions to increase the room tax rate by 3 percentage points.
Funds would be used to reduce the state budget deficit next year and give higher pay to teachers and non-administrative school workers starting in 2011.
The Nevada State Education Association filed documents with the secretary of state's office that are needed before petitions can be circulated. Signatures can be collected between now and Nov. 11.
The lodging tax increase, if implemented in Clark and Washoe counties, would bring in about $175 million a year, far less than the $400 million a year that the NSEA hoped to secure through a 3 percentage point gaming tax increase.
The organization, however, dropped the gaming tax effort in May in wake of widespread gaming industry opposition to that plan.
In exchange, some major casinos, such as Wynn Resorts, Harrah's Entertainment and Station Resorts, announced they would support the room tax increase.
The three companies have joined the teachers union to create the Committee for the Advancement of Education in Nevada, an organization that will campaign for the room tax increase.
Executives with other gaming firms, such as Boyd Gaming and MGM Mirage, have expressed opposition to the room tax boost.
"It is still substantial," said NSEA Executive Director Terry Hickman about the potential $175 million annual room tax revenue.
"It would make a huge difference to the state to have that kind of revenue available. We are going to have a huge deficit unless the economy turns around," Hickman said.
Gov. Jim Gibbons has asked state agencies to plan on $500 million a year in additional cuts as they work on their budgets for the next two years.
Starting in 2011, funds from the additional room tax only could be used for salary increases for teachers and school support workers, or for programs to improve student achievement. No money could be used for school administrator salary increases.
"Education is one of Nevada's most critical issues and we all have a responsibility to our state's children to provide them with the best education possible," said Steve Wynn, chairman of Wynn Resorts.
"Nevadans can truly make a difference in the future of our state's education," said Jan Jones, Harrah's Entertainment senior vice president of communications and government relations.
MGM Mirage spokesman Gordon Absher said his company continues to oppose the room tax increase.
"We don't see it as the answer," he said. "We think the solution lies in seeking a more broad-based plan."
Hotels in Clark and Washoe counties where the room tax rate is now 10 percent or slightly more would begin to charge 13 percent if the increase is approved.
The room tax petitions the teachers will distribute are different than petitions circulated earlier this year. Those called for a constitutional amendment to increase the gaming tax. Constitutional amendments require voter approval twice, and the tax could not have been implemented before 2011.
But the room tax proposal calls only for changing state tax law to permit the 3 percentage point increase.
Supporters must collect slightly more than 58,000 valid signatures on these petitions by Nov. 11 for the measure to go forward. If they meet that goal, then the 2009 Legislature must consider the proposal within the first 40 days of the session.
Hickman hopes legislators approve the plan then because the tax increase could be put into effect by July 1.
If legislators reject the proposal, then it would be placed on the election ballot in November 2010.
But Gibbons has said repeatedly that he would veto any tax increase proposal that does not have widespread public support.
Even if legislators vote to levy the tax increase, Gibbons' spokesman Ben Kieckhefer said the governor would be reluctant to give his support "unless there is a clear mandate from the people that they want it."
To determine if the room tax plan has support, the NSEA has induced county commissioners in Washoe and Clark counties to place advisory questions on the tax plan before their voters in November.
A Review-Journal poll in June found 58 percent of respondents supported the room tax increase, while 30 percent opposed it and 12 percent were undecided.
The petition is written in a way so that the tax increase only would apply in counties with a population greater than 300,000 -- Clark and Washoe counties.
Hickman pointed out that it would take a two-thirds affirmative vote of the Legislature next year to implement the increase. That same percentage is needed to override a governor's veto of any bill.
Consequently, if two-thirds of legislators approve the measure, then Hickman said it would not matter if Gibbons threatened to veto the legislation.
"If they have two-thirds to pass it, then they have two-thirds to override the veto," Kieckhefer said.
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