Nevada casino group files court challenge of tax hike plan

Carson City, Nevada (AP) – A major Nevada casino group filed a court challenge Monday against a ballot initiative by teachers calling for higher taxes on the biggest resorts to get more money for the state’s K-12 school system.

The Nevada Resort Association, in a complaint filed in Carson City District Court, argued that the Nevada State Education Association description of its initiative is „misleading, false, and fails to inform voters of all its material consequences.“

The resort association complaint, written by attorney Todd Bice, says the plan goes beyond a 3 percent tax increase for big clubs by proposing a minimum state spending commitment on education – and that’s a separate issue for a separate ballot question.

Bice said state law requires an initiative to be limited to one subject, in order to ensure that unpopular measures aren’t bundled with more popular proposals to improve their odds of passage.

„This spending commitment is entirely unrelated to, and not dependent upon, the increase in the gaming license fee,“ Bice wrote. „As such, it should be presented as a separate question from the proposal to increase gaming taxes.“

The proposed 3 percent tax on gambling revenues would be collected from casinos that gross more than USD 1 million a month. It would generate at least USD 250 million a year.

Bice said backers of the plan „seek support for the initiative by falsely convincing the public that this would only be an insignificant fee charged against Nevada casinos.“

NSEA president Lynne Warne has said the higher tax is needed because Nevada ranks at the bottom in per-pupil spending and „educators are tired of the burden they’ve been forced to bear for years.“

The proposal would have to win voter approval in the 2008 and 2010 elections before it could take effect. The filing of the plan enables the group to start collecting at least 58,628 signatures needed by May 20 to get on the ballot.

Warne said that collecting the signatures won’t be „too large a challenge“ given the NSEA‘s membership – about half the necessary signature total.

Bill Bible, head of the Nevada Gaming Association, has said the proposal would reduce investments in the state’s huge gambling industry, along with jobs that are created as a result of that investment.

Bible also said that the resorts agree with the teachers on the need for quality education, but added that the casino industry shouldn’t be singled out as the main source of new revenues.

The teachers‘ proposal isn’t the only plan to tap the state’s casino industry for more taxes. Another initial expected to be filed by Las Vegas lawyer Kermitt Waters by the end of the month or early December would boost the tax to 20.2 percent.

Waters says his plan would bring in more than USD 2 billion a year. He wants to use some of the money to replace property taxes paid on primary residences – and claims no property taxes would be paid on such homes if his petition gets more votes than the proposal from the teachers‘ union.

He also wants to set aside enough money to cover the shortfall in highway construction funding and to construct water desalination plants in southern Nevada.