Casino taxes ought to be raised, but isn't an additional 4% awfully high?

Not at all. Gambling must pay for the impacts of the growth and attendant community problems it stimulates. Compared to other industries, the creation of low-wage gambling jobs creates the need for expanded government services. The Guinn-Hunt Administration study (linked below) by their Nevada Commission on Economic Development study proves it. If gambling were paying its fair share for the impacts of the growth it causes and from which it benefits, state and local governments would not suffer constant financial crises. Even Gov. Guinn's staff admits that new government revenues are needed.

Senator Neal's speech before the Nevada Taxpayers Association contains a detailed and compelling case, including charts and graphs showing gaming's percentage on a downward slide while expanding population outstrips the capacity of government to serve it.

When linked to the Nevada Commission on Economic Development study which shows that low-wage gambling jobs create an inordinate demand for expanded government services, the argument becomes irrefutable.

No less than former U.S. Sen. Paul Laxalt, R-Nev., has decried the growth in low-wage Las Vegas gambling jobs.

These conflicting forces have strained Nevada to a breaking point. Even a casino-elected Republican governor has recognized the need for new taxation. Gov. Guinn's first chief of staff, former Assemblyman Peter Ernaut, R-Reno, noted that the needs of just the Clark County School District and state Medicaid foreshadow an annual state deficit of over $700 million per year. See the Las Vegas Sun story.

Clark County itself faces a $698 million shortfall in the near future. See the story at the Las Vegas Business Press.

Casino taxes were last raised 14 years ago in 1987. (The state then delayed for three years collecting even that small increase.) Since that time, Nevada's population has nearly doubled and school enrollment has increased by 85%. Most of Nevada's growth is due to the expansion of the gambling industry. The tax burden on individual Nevadans has increased during the past 13 years to help pay for the costs of growth. A few examples:

  • Property taxes in Las Vegas have increased approximately 20%
  • Gasoline taxes in Clark County have increased 66%
  • The vehicle privilege tax has increased 20%
  • School support taxes have increased by 33%

Not only have casinos had no tax increase during this time, but the share they contribute to the state budget has dropped. The state budget has increased 300% since 1987. Revenues from sales and use taxes have also increased by 300%. Revenue from gaming has increased only 142%.

The costs to Nevada that result from gambling's growth are going up. The dollars which casinos pay toward those costs is going down. In 1987 money from gaming taxes made up 17% of the total funds in the state budget. In 1999 they accounted for only 10%. Maybe that's why the casino industry could afford to spend over $22 million in an effort to defeat the Indian gambling initiative on California's ballot in 1998 -- which passed anyway. Now, they are using their record profits (up 6.4% in 2000) to invest in Golden State casinos.

Clark County (which includes Las Vegas) faces a shortfall in the near future. Yet the gambling industry can afford to spend $5 billion on new and expanded casinos in Nevada.

Not only is an additional 4% reasonable, it still leaves Nevada's casinos paying far lower taxes than casinos in other states and countries.

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