Room taxed

On Thursday, the Nevada State Education Association filed documents in Carson City necessary to circulate an initiative petition that would raise the room tax by 3 percentage points. The money collected — perhaps $175 million a year — would be used next year to stem a projected state budget shortfall and from then on to pad the salaries of public school teachers and non-administrative school workers. …

Supporters have until Nov. 11 to collect about 58,000 valid signatures. If they do, the 2009 Legislature must consider the proposal during the first 40 days of the session. If lawmakers reject the measure, it would go to state voters in November 2010.

Predictably, the measure has popular support — many Nevadans view the gaming industry as an appropriate target for higher taxes. In addition, some gaming companies are on board, preferring a higher room tax — which can be passed on to visitors — over previous union threats to seek a higher gaming tax, which hits the bottom line.

But Nevadans should consider a few factors before they embrace a 30 percent hike in the room tax. Will this new money help improve student achievement? How? Union officials have offered scant details.

In addition, Nevada’s tourist economy has slowed considerably — thus the state budget shortfall. Gaming revenues are down, visitor volume has been flat. The two major construction projects currently moving forward on the Strip have run into problems — MGM Mirage is struggling to find new financing for its City Center project and Boyd Gaming is delaying Echelon.

Is hammering tourists with higher room rates really a recipe for a turnaround?

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