The deal struck between three casino companies and the Nevada State Education Association to end the teachers union quest to raise gaming taxes is not sitting well with everyone.
While Station Casinos, Caesars Entertainment and Wynn Resorts support the measure to increase room taxes, MGM Mirage and Las Vegas Sands do not. They are asking the Clark County Commission to keep the advisory measure off of the November ballot.
The commission must vote to put the non-binding measure on the ballot so voters have a say on whether to raise room taxes by 3 percentage points.
MGM Mirage has submitted its own proposal that calls for an increase in the state’s payroll tax to close the state’s budget deficit. MGM Mirage CEO Terry Lanni said doubling the payroll tax from 0.062 percent to 0.123 percent could generate USD 246 million for the state.
He says the plan is better than the room tax proposal because it doesn’t earmark money for any specific purpose. Instead, it funnels money into the general fund and allows lawmakers to use themoney as they deem appropriate.
Lanni also said he would rather see the room rate be increased by 2 percentage points, and for that money to also be directed into the general fund. He would also like to see money diverted from the Las Vegas Convention and Visitors Authority into the general fund. The three moves could generate as much as USD 800 million.
“This is a much more practical approach, to take a look at existing taxes,” he said. With some experts estimating the current economic slowdown could last for at least 18 months, Lanni says his proposal is a more reasonable course of action.
Ben Kieckhefer, a spokesman for Governor Jim Gibbons, said the governor “would have a hard time supporting such a proposal, given that many businesses are struggling right now.”
Carole Vilardo, president of the Nevada Taxpayers Association, said the payroll tax increase could be absorbed by big gaming companies but would be devastating for small businesses. Vilardo doesn’t like the room tax proposal, either.
“To make tourists pay the tax is great, but what happens when the tourists don’t come?” she said. Nevada residents seem to favor the hotel room tax increase, with a recent poll showing support from 58 percent of respondents.
“Voters always like the opportunity to tax somebody else, especially tourists,” said Brad Coker, managing partner of Washington, D.C.-based Mason-Dixon Polling & Research Inc., the firm that conducted the poll.