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Surrounded by Nevada legislators, Gov. Brian Sandoval signs an online poker bill into law, Thursday, Feb. 21, 2013. The law will allow Nevada to move ahead with online poker in the absence of federal action.
Sunday, Feb. 24, 2013 | 2 a.m.
CARSON CITY -- Gaming walks around the Nevada Legislature like the big strutting rooster, the whale in Nevada’s political swimming pool. Because it is.
And with good reason. While other states and countries charge much higher fees on gambling and even collect more in taxes, Nevada’s casino-resort industry pays or collects 46 percent of the state’s general fund, by its own measure.
It’s a huge portion of the state’s funding, by just about anyone’s measure.
But it’s not as big as it once was. In 1997, casinos paid and collected almost 56 percent of the state’s general fund revenue.
Over the past 15 years, gaming’s share into the state’s general fund has decreased by nearly 10 percentage points, as other broader taxes have gone up.
Without a doubt, gaming has been Nevada’s economic engine and continues to be the single largest contributor to the state’s general fund. Without it, we’d be Idaho with fewer potatoes — boring.
The industry wields significant power in the Legislature, as was proven last Thursday, when the Legislature declared an online gaming bill an emergency measure. It was heard jointly by committees in the morning, passed each house of the Legislature unanimously and signed by Gov. Brian Sandoval in the afternoon.
More than a sign of bipartisanship or executive-legislative branch cooperation, though, it was a reminder that no one has juice in Nevada like big gaming, under the rubric of the Nevada Resort Association.
And the same is true over the biggest policy debate over the past decades in Carson City — money. From where does the state collect it, and is it enough to fund our schools, higher education, public safety and social services?
Gaming has argued for decades that casinos are so important to the state that efforts to tax them would be detrimental. The industry has also argued that the tax burden should be spread out among other state industries, pushing for a broad-based business tax that everyone would pay.
As a result, the gaming tax rate has only increased marginally since 1955, when Gov. Charles Russell raised it on the state’s largest casinos 2.5 points, to 5.5 percent for the largest casinos.
Almost 60 years later, the tax rate sits at 6.75 percent.
The state’s gaming tax makes up 22 percent of the state’s general fund revenue. That’s down from 42 percent in 1994, the latest budget statistics immediately available, according to a Las Vegas Sun analysis.
Meanwhile other taxes, like the sales tax, have quadrupled. The state has also added other taxes and fees, like the modified business tax, on business’ payroll.
But as many in the state push for new revenue, gaming has succeeded in keeping the target off its back.
Danny Thompson, head of the AFL-CIO, said that reliance on one industry would make those funding sources unstable.
The industry also is fighting off a higher tax bill on many fronts.
Casinos are working to exempt themselves from paying taxes on the meals they give free to employees and patrons. Caesars continues to pursue a tax exemption for the purchase of corporate jets. In the depth of the state’s budget crisis, in 2010 when the major casino companies were struggling, the NRA is opposed to paying increased fees to cover the cost of regulators.
The resort association has decided to remain neutral on the teachers' margin tax initiative, which must be passed by the Legislature in its first 40 days or go on the ballot in 2014.
“On the one hand, they say they’re out of the tax debate,” said Lynn Warne, president of the Nevada State Education Association. “With the other hand, they’re pleading their case not to pay taxes.”
Virginia Valentine, president of the Nevada Resort Association, noted that the amount the industry pays has increased, as it bears its share of the general business and sales taxes.
“There’s a difference between paying less and paying a smaller percentage,” Valentine said.
“When it comes to the state and the industry, we’re partners,” she said. “What’s good for the industry, generally, is what’s good for the state.”
The past five years have been brutal for the state. The economic recession has wreaked havoc on both the gaming industry and government services.
Gaming companies are now climbing out of the recession, but it’s unclear how much the state government will recover in the next few years.
A day after lawmakers passed the online gaming bill, lawmakers held a joint hearing about the effect of budget cuts over the past five years.
There were stories of thousands of Nevadans waiting for services. Class sizes have increased in schools and there are not enough textbooks for students. At colleges and universities, tuition has increased by over 40 percent.
No one introduced a bill, or took quick action. Without any easy solution, it was just a hearing.
when i look at this picture all i see is ratty government-o-crats happily plotting their next scam to loot me and then dole out $2 Billion dollars plus to illegal aliens and their anchor baby offspring for education, medical care, medicaid, police social services, transportation services and more tax money wasted down the drain
while billions of dollars in wire transfers - remittances - head back UNTAXED to their home countries by western union/first data, banks, and other money exchangers who are raking it in
the Supreme Court's ruling in Plyler vs Doe ruling should be legislated out of existence - but noooo
- the political rats including Sandoval want to keep the tax party rolling and expand failing tax supported commnuist style mandatory education that keeps its bloated payrolls marching along
all for seriously crummy so-called educational results that the communist democrats and their across the isle buddies now want to pass the "social promotion" education bill #61 that destroys all school accountability and keeps the tenured no-teach teachers in tax supported business by NEVER flunking a student. never.
the rats will never improve education and will never measure up nevada schools by using choice, vouchers, privitization
cagney had it right when he said, "you dirty rats". nothing more than a bunch of tax grubbing and grinning government-o-crat rats looting my pocket to keep their communist tax plans in order while results go down the rat hole
They embrace a bunch of gangsters at "their clubs," using night clubs and Limo Services to outsource the vice, drugs and prostitution, then they pay off politicians to avoid paying taxes to deal with the wreckage they cause in our society. They smell of corruption through and through.
Gaming Industry uses clout to prevent a State lottery !Who cares if all that money goes to California ?
I pay 8.1% tax when I buy a pair of shoes and the gamer's pay 6.75% with plenty of business tax exemptions . We have a misguided and unfair system in Nevada were the little guy gets hammered and the gamers ride for free. Gaming taxes should be tied to the state and county sales tax rates. For years Nevada gamers have used the profits, knowledge and experience in Nevada to expand gambling around the world and make billions. It's time they paid us back and please don't give me the argument about how good gambling has been for the state.
Adelson and Wynn pay the Communist Chinese 39% yes? Nevada is such a punked state..
truthserum,,
I read Schwartz' "report" and was just about to write when I read your comment. PERFECTLY stated! I need say nothing more.
Everyone else,
Please read what truthserum wrote and believe it in your soul.
Purgatory
"The economic recession has wreaked havoc on both the gaming industry and government services..." Hmmm. I thought, according to articles in the Sun and other reports, that Macau has made a mint for these guys during that time frame anyway - that China represents triple fold or more income for them than just Nevada. So I find their woe is me attitude pretty weak.
Steve Wynn has a hankering to buy a few more Picassos to decorate his new $70 million penthouse in Manhattan. And with the state's laughable 6.75% gaming tax Steve won't have to go searching under the couch cushions to satisfy his expensive taste. So shut up and bend over clueless Nevadans. After Steve, Sheldon and the others have been fully serviced everybody gets a free buffet.
Virginia Valentine is a well trained liar,paying less or a smaller percentage is the same,why she would think the public would buy her foolishness is insulting. Of course in reality she is just the lacky for big casino owners who do not want to be assoicated with Nevada being ranked last in public education and Clark County School District being ranked behind Guam in public education as the big casino owners file bankruptcies and stiff investors and keep their casinos.
New Jersey and Illinois have huge tax assessments against the casinos located within their states. No wonder the casinos there are having financial problems. Keep the taxes low.
The new mob running Las Vegas is way more dangerous than the old mob which used to run the Las Vegas casino industry. Back in the 70s you could walk down the strip, or drive without being shot at or scammed by someone.
Our current legislators shoot off their mouth about states rights and legally owning and carrying guns when it's election time but after that they become puppets of the casino industry.
Can anyone posting here tell me any other state that one industry pays 46% of the total state budget each year?
If so, what state and what industry pays it?
The Nevada gaming industry is sitting on $46 billion in debt. They need to get to work on paying their bills and spend less time in politics.
The entire industry nearly imploded in on itself a few years ago. Get to work on those balance sheets and don't worry so much about employee lunch tax breaks.
Nevada doesn't have a diversified economy. The fact that 46% of general fund revenues comes from one industry is a joke in and of itself.
I moved to California in 1961. At that time the state was very heavily dependent on defense contractors. There were significant cutbacks in defense when the Vietnam War started winding down and the entire state nearly collapsed. We need better education, medical care, lower crime and a much more diverse economy.
http://www.8newsnow.com/story/17141274/n...
vegaslee
Can you name another state where one industry controls every single politician in both partys?
If so, name the state and the industry.
@antigov
State:
Mississippi, Texas, Arkansas
Industry:
Religion
Point, set, and match!
@jimmyk,
Illiterates don't count.
Point,set and match.
Sales Taxes are based on total sales, so the customers bear the entire amount of tax. All the business does is collect and turn over what they collect, therefore, a sales tax should not be part of any equation in this discussion as casinos would pay more when business in good, so it's a good thing, not a bad thing for the industry and the state.
But I have seen my 'free offers' drop all food, so it has had a negative effect in my pocket, but, no, it certainly has no effect on whether I'm coming back.
Love Vegas!
js
Vegaslee,
Alaska...... Since the completion of the Trans-Alaska Oil Pipeline, petroleum revenues to the State of Alaska have averaged over 85 percent.
In the state's fiscal year ending June 2011, oil and gas revenues represent 92 percent of Alaska's unrestricted revenue.
http://www.aoga.org/facts-and-figures/st...
@ davis296
Alaska pays money to every single citizen in the state every single year so keep trying.
They also pay 25% tax rate in Alaska.
The reason tuition at universities is out of control is because they have little incentive to reduce their tuition. Student loans are too easy to get--it's like the subprime mortgage bubble.
http://www.youtube.com/watch?v=xFY-PgPA-...
Vegaslee asked what state pays more than Nevada Gaming 46% ---- answer -Alaska - Oil industry pays 90% of taxes in Alaska