So says Bill Weidner:
We can find new revenues without creating any new taxes.
By Bill Weidner
Just four short years ago, the Guinn Administration proposed and implemented the “mother of all tax increases” in Nevada. At that time, Gov. Guinn said, in reference to his $1 billion-plus plan to increase taxes, “This will not just be a plan for the next two years. This is a plan for the future.”
Now there are casino executives proposing we raise taxes even further in order to avoid the threat of a gaming-tax increase posed by the teacher union. In other words, our industry’s leaders apparently have adopted the position that tax increases are fine, as long as we “tax someone else” — their preferred alternative to supporting Gov. Gibbons in holding the line on tax increases.
The teacher union extortionists’ tax threat ought to be confronted head on for what it is: a proposal to sabotage the state’s economic engine — and solely for short-term benefit of union members. Long term, the economic damage to the state, including teachers themselves, would be profound.
Yes, Nevada’s gaming tax is the country’s lowest. But that fact is key for Nevada’s future. It’s the reason Nevada attracts far and away the world’s largest multiple of gaming-tourism investment. Not only do those huge investments bring great follow-on investment outside gaming, but, more critically, they build the great new, state-of-the-art Southern Nevada resorts that lure visitors here from around the world — to pay our nearly 8 percent sales tax (and lots of it). Thus, attacking Nevada’s attractiveness as a tourism investment also means attacking Nevada’s primary revenue source: the sales tax. State reports tell the story: Clark County gaming revenue for the first six months of 2007 totaled $5.4 billion, but county sales tax revenue far surpassed it at $18.2 billion.
Make no mistake: I know of no Nevada resident opposed to teachers or even to making sure that good teachers are compensated appropriately. However, there is a clear distinction between a good teacher and a teacher union boss. And the bosses have failed their economic lesson.
Not to complain without offering a solution, I offer the following facts as well as a proposal to increase state revenue without raising or implementing any new taxes.
If you went to the Sands Expo looking for 200,000 square feet of convention space, you would be offered a quote of roughly $420,000. Catch a cab to Mandalay Bay and rent the same space for about $360,000. Each facility was built and operates privately — without government subsidies. Each property also pays taxes.
Next, visit the Las Vegas Convention Center. Even when its space is effectively sold out, you’ll receive a quote of only about $225,000 for the same square footage. That’s a huge, below-market giveaway for that amount of space.
Next year, The Venetian/Palazzo is budgeted to pay about $61 million in room taxes, and Mandalay Bay will pay in excess of $30 million. These dollars go directly toward subsidizing the Las Vegas Convention Center, a government entity that already runs at sold-out capacity.
I ask you: What’s wrong with this picture?
I propose we change the Las Vegas Convention and Visitors Authority (LVCVA) to the Las Vegas Visitors Authority (LVVA) and provide this new entity with at least $100 million, increasing with inflation, to continue to promote visitation to Las Vegas. We then release the remaining $120 million of its $220 million operating budget by privatizing the Las Vegas Convention Center.
Under this plan, we would capture the increasing room-tax revenues from our current 133,000 room base and add revenues from the 49,565 new rooms to be opened by 2012. Approximately a half-billion dollars annually in new tax revenues would become available — without increasing a single tax.
Each year, this plan would provide more than $50 million more in tax revenues from Clark County than even the teacher union proposes.
So why haven’t we tapped into this powerful source of tax revenue? The fact is that the LVCVA is just too politically wired.
I went to the Legislature last spring to request that the state divert some of the new, future room-tax revenue to help relieve traffic congestion in southern Nevada. I was met with fierce opposition from an onslaught of lobbyists, all paid for by room-tax subsidies. That’s some way to treat one of your biggest room-tax contributors!
Currently, the LVCVA is an entity that converts room-tax revenues to discounts for multi-million dollar tradeshows. In fact, 53 percent of gross revenues go to political entities in the form of subsidies for schools, transportation, grants and gifts to curry their favor. It funds well-paid lobbyists to fight for the status quo and it wastes valuable tax dollars that could be used to improve Nevada’s schools, roads and infrastructure.
It is not acceptable to endorse tax increases just because you would shift the tax burden to someone else. Our state has legitimate challenges and we need intelligent solutions. We must be willing to challenge the status quo and conventional wisdom.
Before we ever advocate any tax increase that would negatively affect Nevada’s economy, we have a responsibility to use the revenue that we have more wisely.
Bill Weidner is president and COO of the Las Vegas Sands Corp. and a member of the board of directors at the Nevada Policy Research Institute.