Archive for June, 2008

It’s time for annual legislative sessions

June 25, 2008

by David Farside



It’s politics as usual in Carson City. First, Republican Governor Gibbons called for a special session of the legislature on Monday to find ways to make up for our budgetary shortfall. Now he has changed his mind and is threatening to move it to Friday. It seems he changes his mind about politics as often as he does about women. He and the Republican senators who control this state should have solved the problems in the regular session.

The soon to be divorced governor should have seen the writing on the wall last year. Now he will cost the taxpayers another $300,000 because of his inability to get things done and his stubborn policy of no new taxes.

The need for the special session has been questioned by state treasurer Kate Marshall. She sent letters to state leaders and Gibbons stating the state has enough cash flow, over $200 million, to last until the next session opens in 2009.

The projected 2007-2009 budget has more than a $914 million short fall. To their credit, Gibbons and the legislature have found almost $914 million. But estimates show the state needs to cut between $90 million and $260 million to meet their budget. The shortage is due to a drop in sales tax and gaming tax.

Marshal has recommended several cost saving options to the state: freezing overtime for state workers would save about $18 million. Discontinuing out of state travel would save another $ 700,000; and another $6 million could be saved annually by limiting in-state travel of state workers.

Some new sources of revenue might be considered. MGM Mirage CEO Terry Lanni is in favor of raising the business payroll tax and possibly the room tax. But, he didn’t mention anything about raising the gaming tax. If the 0.6 percent payroll tax was increased to 1.3 percent it would generate another $246 million annually on the back of small business.

The room tax might be a better option for the gamers. The Nevada Resort Association might actually support a temporary increase in the room tax. It would be good strategy on their part. Since the gamers snookered the teachers into believing they could get a room tax in the future, they could argue against any further milking of their cash cow.

Speaking of teachers, Sen. Bill Raggio wants to save $130 million by deferring a 4 percent cost of living increases to state workers. Most state workers are teachers and have a signed agreement with the state guaranteeing their salary increase. This idea of Raggio’s would certainly end up in court.

It always bemuses me how these so-called friends of education can’t keep their word to education. If anyone deserves a raise it is teachers.

Every day they have to contend with school principles, policy of the school district, parents, problem children and politicians. We entrust our children to them and expect them to not only teach the academics, but to guide our kid’s in the direction of moral values. But, they are always the first ones on the senate’s fiscal chopping block.

We know of one tax that will never be increased – the gaming tax.

Compared to other states Nevada’s gamers are getting off easy when it comes to paying taxes.

The gaming tax rate in Louisiana is proof that an increase in Nevada’s gaming tax will not “ destroy” the state’s gaming industry. Currently, Louisiana receives 21.5% of the casinos gross revenue. Before the legalization date of July 1991, Nevada based casinos wanting to do business in New Orleans were willing to pay an even higher percentage just to get their foot in the door of a new market.

These are the same corporations enjoying a 6.75% maximum tax on gross revenue here in Nevada. However, the Nevada revised statues provide for additional fees and levies by counties, municipalities and the state of up to 1 percent.

The state of Illinois imposes a 15% to 50% graduated tax on gaming. They also charge a $2-3 per patron admission tax.

Last year the racetrack casinos in New York had a gross of $828 million. More than half of that, $449 million, was distributed to education

Nevada gaming revenue in 2007 was $12,849 billion. By increasing the gaming tax by even a half percent the state would receive another $750 million. As long as we have the old guard republicans in the senate any increase of gaming tax is not even a remote possibility. I wonder why?

Between the political posturing and rhetoric debate one comment did make sense. Sen. Bob Beers said he will introduce a bill changing the legislative sessions to once a year instead of every two years. And that is a good idea. He points out it is unreasonable to project needed revenues 26 months in advance.

That will never happen. Organized chaos is the senate leaders best friend. They always use the excuse they don’t have the time to hear all the issues. Usually, a week before the close of the session they tack on their favorite pet projects to an obscure bill that will pass easy without any debate.

I don’t know what they will decide about the budget. But this year’s special session demonstrates that Sen. Beers is right. It is time we have annual legislative session.