Commissioners to decide whether to put 3 percent lodging tax increase on Nov. 4 ballot

Area residents are likely to be asked in the Nov. 4 election whether they would support imposing a lodging tax of up to 3 percent on hotels to offset $260 million in reduced funding for local schools in the next two years.

County commissioners will decide Tuesday whether to put a question on the ballot to gauge voters' sentiment about the local room tax.

If the majority votes "Yes," county leaders will use the public support to lobby state lawmakers to pass the tax that would take effect July 1, 2009. Although the tax would be limited to hotels within the county, the Legislature must sign off on it.

The ballot question was crafted in a joint effort between the county and three hotel-casino companies -- Harrah's Entertainment, Wynn Las Vegas and Station Casinos.

"I believe it's important to see how the public feels about this," said Commissioner Susan Brager, who served on the Clark County School Board for 12 years.

Brager said schools are severely underfunded, leading to overcrowded classrooms and, in turn, a dip in the quality of instruction that students receive. Meanwhile, state funding for schools has eroded in every legislative session, she said.

"We've done enough belt-tightening," Brager said. "There are no more loops on the belt. There are no more holes."

Still, she said she would like to ensure the room tax isn't too onerous during an economic slump.

The county is facing a 14 percent reduction in state funding in the next biennium, which would add up to $130 million in losses for each of those two years.

Money from the tax would go toward improving student achievement and paying wages of non-administrative personnel, such as teachers, for two years. It also could go toward other non-education programs at the state level.

Tourism industry representatives could not be reached for comment Friday.

But a consultant who worked on behalf of the three resort companies to hammer out the ballot question said her clients considered the proposed tax a fair compromise.

The tax money must offset reduced school funding that's predicted for the next two years and not be used to replace even more reductions, said Terry Murphy, the resort company's consultant.

"The idea is to enhance education," Murphy said.

If the tax passes, hotel owners would pay a maximum rate of 3 percent. They might fork out less, depending on lodging taxes they already pay.

The total taxes they are charged cannot exceed 13 percent of revenue.

Room taxes vary. A Las Vegas hotel with more than 75 rooms on Fremont Street pays 11 percent in taxes. That means no more than 2 percent could be added under the proposed plan.

By contrast, a Fremont Street hotel with fewer than 75 rooms pays 10 percent in taxes and could be levied an additional 3 percent.

Commissioner Bruce Woodbury said he is in favor of letting voters air their opinions through ballot questions.

In the past, he has seen lawmakers consistently follow the public's wishes expressed through straw ballots. That included funding transportation projects and creating the regional flood control district.

"It gives them a level of comfort that they are following the will of the people," Woodbury said.

An education advocate said an additional revenue stream would be welcome, but a leak must be patched. The system is set up so that any surplus education money is diverted to other programs in the general fund, causing schools to be shortchanged, said Mary Jo Parise-Malloy, president of Nevadans for Quality Education.

"I'd like to see some way to guarantee there's more money for education," Parise-Malloy said.

Contact reporter Scott Wyland at swyland@reviewjournal.com or 702-455-4519.