Casinos Make My Case to Raise Their Taxes

The gambling industry recognizes that Nevada does not generate enough revenue to pay for the needs of the nation's fastest growing state — growth mainly sparked by casinos.

The industry's own conduct proves it. Gambling has been the driving force behind hundreds of millions in tax increases on everyone but itself.

Nevada casinos pay the world's lowest taxes. In foreign countries, taxes on gaming gross range from 20% to 84%.

Other states and countries realize that gambling revenue comes at high cost to the community.

The industry for decades all but ignored gambling addiction until the U.S. government started making noises about a federal gaming tax.

Even using the most conservative numbers, the social cost is astounding, ranging from $13,200 to $52,000 per victim per year. A University of Michigan analysis projected that five percent of Nevada's population suffers from a gambling problem.

At one percent, Nevada's cost stands at more than $224 million per year. At five percent, the annual impact tops $1.1 billion. A recent UNLV study found that 6.6 percent of Las Vegans are pathological or problem gamblers.

Gambling makes much of the $578 million it expects to pay the state this year. But that only represents 8.96 percent of Nevada's 1999-2000 budget. Of that, $43.8 million is entertainment tax passed through from patrons.

If we do nothing, casinos will soon get back more in corporate welfare than they pay in taxes. More than $400 million has been taken out of the Reno-Sparks property tax base for casino-promoting downtown redevelopment projects. Las Vegas has suffered subtraction of more than $281 million.

Room taxes shunted to convention and visitors authorities around the state now approach $200 million a year.

Such financial misdirection has squeezed municipalities which have had nowhere to turn but property taxes for necessities such as parks. This explains why such levies have consistently outpaced inflation in many parts of Nevada.

Our casinos have taken their profits and invested in states where they gladly pay higher taxes.

If any other evidence is needed, please note that gambling is scrambling once again to find other people to tax.

Incoming businesses are principal targets. Some compete with casinos for the low wage labor pool. Others take great interest in upgrading the school system because they need educated workers to compete in a world market.

Gaming has demonstrated little interest in education. Otherwise, it would voluntarily pay more taxes rather than stand by while Las Vegas casino mogul Steve Wynn takes $18 million from schools this year alone to subsidize his casino art collection.

It is little wonder that we consistently rank as a hazardous place to raise children.

It's time to balance the books.

Beginning in January, I will circulate an initiative petition to add five percentage-points onto the gross tax paid by the state's largest, most profitable gambling enterprises. Every penny will be deductible on federal tax returns, so it may be viewed as largely keeping tax money from going to Washington.

For additional information, such as how I propose to allocate proceeds, Nevadans may contact me through the legislature or through this website.

A slightly edited version of this commentary was published in the Reno Gazette-Journal of Thursday, 8-26-99.

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