I am responding on behalf of Sen. Neal.
Nevada has no such law. You are not the first to ask this question.
Following, you will find my response, prepared in consultation
with Sen. Neal, which went to someone at what appears to be a
Texas (or is that Baja Oklahoma?) educational institution. I
strongly recommend that you use the search engines at this site and at Nevada
Labor to flesh out your research. At Nevada Labor, I especially
direct your attention to the Casinos
Out of Politics section.
You will not find much to bolster your
case from this quarter. The gambling industry has long been the
nemesis of Nevada education, recently adopting a strategy of
scapegoating non-gaming business for the fact that the state
stands in increasingly poor financial condition. Indeed, industry
leaders have even accused some businesses of paying no taxes
at all. Their latest strategy is to blame the state's anemic
economic diversification efforts for bringing in non-taxed businesses.
That fraudulent assertion and more were
soundly refuted by a Nevada Commission on Economic Development
study which you may access from the front page of this website.
You will also find it among a group of recent analyses posted
with the text of a speech by Sen.
Neal.
The state study represents the first-ever
"smoking gun" evidence, which definitively demonstrates
that gambling in Nevada does not pay its fair share of taxes.
The industry does not really care about
supporting either education or economic diversification. It wants
no competition for our large, undereducated, low-wage labor pool.
Please see my column of October
3, 1999 and a number of other items accessible through the
search engines.
You would do well to keep Whittier (Calif.)
College Prof. I. Nelson
Rose's comment in mind when suggesting expansion of gambling:
"When gambling is everywhere, it will be nowhere."
The only way communities can justify such seemingly painless
"voluntary taxation" lies in the proposition that it
takes money from the pockets of people who live elsewhere. Once
that argument can no longer be made and gambling begins to devour
its own home communities, it will begin to be banned. We have
long and sorry experience here as to the social costs extracted
by the industry, again something you may review via the search
engines and the news links below.
If your thrust is education, I further
suggest you look at educational impacts in Mississippi. In one
community, a sorely needed new school was placed in the most
affluent -- mostly white -- part of town.
You might also look at the California
Indian Gaming Website as another resource. Daily updates
are available.
Thanks for your interest and please let
us know how else we may be of service. We would like to see the
result of your research.
Be well. Raise hell.
Andrew Barbano
The quick answer seems to be "no."
Not only does the gross gaming tax not
go to schools, but Steve Wynn's art tax loophole/casino art subsidy
places another shunt to gambling from students. (Sen. Joe Neal's
site is loaded with articles on the issue, as is Casinos
Out of Politics. The new search engines make additional information
easily retrievable.)
The most vaunted (and expensive) of all
studies of Nevada taxation is the Urban Institute/Price Waterhouse
study submitted to the 1989 Nevada Legislature. At the time,
I got a copy which consisted of five spiral-bound volumes weighing
more than 25 pounds--the all time Silver State champion for cost
and dust gathering surface area. As I recall, it cost about $400,000.
It was later published in book form by
the University of Nevada Press. Curiously, someone purchased
every remaining copy just at the time Sen. Neal introduced his
gaming tax hike in the 1999 legislative session.
I escaped with the last one. Here's an
excerpt:
"State aid to school districts in
Nevada is based on total guaranteed support levels, which are
tailored to each district and from which state-mandated, but
locally generated, resources are subtracted. The difference between
total guaranteed support and local resources (a one-and-one-half-cent
sales tax known as the Local School Support Tax and a twenty-five-cent
a valorem tax on real property) is state aid and is funded by
the Distributive School Account. The aid formula allows for differences
across districts in the costs of providing education and in local
property wealth...School districts receive additional revenue
that is not part of the guaranteed school support program (which
is) intended to cover about 85 percent of the districts' general
fund needs. The balance is to be generated through an additional
fifty cents of ad valorem tax on real property, motor vehicle
privilege taxes, franchise taxes, and other local and federal
revenues."1
While the relative percentages of sales
v. property taxation noted in the 1989 study, above, have changed,
the mix of taxes remains the same and the gambling industry is
still absent. This is why Steve Wynn's casino art tax break is
so egregious. It takes money from sales/use taxes, a good portion
of which are earmarked for the Local School Support Tax.
In 1976, California voters passed property
tax-slashing Proposition 13. In 1980, based largely on vague
but glowing promises of something better from first-term Republican
Gov. Robert List, Nevada voted down a similar petition, Question
6. List's post-election solution involved raising sales taxes
in order to cut property taxes - the infamous Tax Shift or Tax
Shaft of 1981. Large property owners such as casinos became the
principal beneficiaries of what began as a populist homeowners
revolt.
The sales tax hike continued and worsened
an unfortunate long-term trend toward regressive taxation which
penalizes low-income people. Nevada's dependence on the unstable
sales tax began in the late 1940s, according to longtime Nevada
reporter Dennis Myers of Reno's KOLO TV-8 and the Las Vegas Business
Press.
In a column in the July 23, 1999, Daily
Sparks Tribune, Myers noted "as the baby boom gained force,
the state's teachers led a drive for a school funding source.
They chose the sales tax...The rate of collection is so gradual
that taxpayers don't realize how heavily they're being taxed...But
it has risen to such a level that it is no longer easy to hide
- checkout clerks say they now get incessant complaints about
the tax," Myers wrote.
In the depths of a severe, Federal Reserve-caused
recession, Gov. List and the 1981 Nevada Legislature moved us
to increased dependence on unstable sales taxes (only 25% of
which are paid by tourists). As a result, we have one of the
most regressive tax systems in the country. List was defeated
for re-election in 1982 and now works as a gambling casino executive.
Things had gotten so bad by 1991 that the
legislature passed the "BAT" (business activity tax,
now re-labeled a business license tax). The names are a shuck
to maintain the fiction that we have no state income tax on business.
The BAT is a per-head tax on employees and gave big employers
like casinos a 25% volume discount. Even a business tax had to
be regressive to pass muster in the Silver State.
The BAT still does not generate enough
revenue (less than 2% of the state's biennial budget) to make
a dent in the state's needs.
The gambling industry will assert that
it's the principal generator of the economy and pays lots of
other taxes, but most of them are pass-throughs and casinos even
earn a fee for collecting some of them.
They do pay property taxes, so in that
sense they can say they pay some indeterminate contribution to
the schools. However, their property values are not calculated
like taxes on the average home. When their profits slip, they
can and do apply to get their taxes reduced. (See my column of
December 7, 1997 among other information you may access thru
the search engines.)
Please keep in mind that whatever property
levies casinos may pay do not constitute a tax on gambling operations.
Their property taxation is based on market value of their businesses
and in that arena gaming is no different than the corner barbershop
or a manufacturer of kitty litter. Said property taxes remain
quite low due to the 1981 Tax Shaft-- and all state and local
taxes are fully deductible on a federal income tax return.
The only real tax the industry pays, the
gross gaming tax, goes directly to the state's general fund.
The industry gets back a full third in the form of corporate
welfare programs such as:
1. Wynn's art tax break
2. The Lucky Bucks tax loophole, which
allows casinos to deduct the full face value of promotional coupons
and complimentary casino chips given to patrons. This effectively
becomes a license to print money, as the Monopoly money passed
out to customers is fully deductible from gross gaming taxes
owed the state.
3. Hotel room taxes, hundreds of millions
of which are annually shunted from parks and infrastructure to
casino advertising and promotion through convention and visitors
authorities statewide.
We will be happy to respond to any other
queries.
Be well. Raise hell.
1Ebel, Robert D., Editor; "A Fiscal Agenda
for Nevada"; 720 pages; University of Nevada
Press, 1990; pages 327-28. From a prologue: "This report
was written
jointly by analysts at the Urban Institute and Price Waterhouse
under
contract to the Nevada State Legislature." ISBN 0-87417-153-9;
ISBN
0-87417-154-7 [pbk.]
