Gov. Guinn should reveal revenue plan

As another election year gets under way, I hope Gov. Kenny Guinn will reconsider his decision not to reveal his state tax and revenue plan until after the November elections. Because if he sticks with his original decision, the gaming industry will escape the public scrutiny that it deserves in any serious discussion of Nevada's tax structure.

I could hardly believe Gov. Guinn when he announced in Las Vegas last year that he had a tax plan, but wouldn't reveal it until after the November elections so as not to alienate any voters before they go to the polls. And I still have difficulty believing that our governor is that impervious to public opinion on an issue that affects everyone in our state, not just gamblers. The Nevada governors I knew in the 1960s and '70s -- Grant Sawyer, Paul Laxalt and Mike O'Callaghan -- would have exercised leadership rather than dodging the vital question of how to raise enough revenue to finance state government in the face of a chronic budget deficit.

Sure, Guinn has appointed a Task Force on Tax Policy headed by former Clark County Finance Director Guy Hobbs, but so far the advisory group is moving slowly. Describing the group as the "Legislature's Committee for Political Cover," Las Vegas political columnist Jon Ralston wrote that "the (Hobbs) panel ... is operating with a script written by a governor and a Gang of 63 (the Legislature) who do not want to see the final, edited version until after Election 2002. That's because if the panel were to make its recommendations earlier, the elected folks might actually have to take a stand." Which is pretty close to the dictionary definition of political cowardice.

Now don't get me wrong, I'm not advocating a Joe Neal-type gambling tax increase. Neal, a North Las Vegas Democrat, did casino owners a favor during the 2001 legislative session by advocating a punitive 80 percent tax increase on the largest casinos, from 6.25 to 11.25 percent of their gross winnings. Neal's blunderbuss approach plays right into the hands of people like influential casino lobbyist Harvey Whittemore, who opposes any public discussion of gambling taxes even though they've remained the same for more than 10 years and are low compared to other states with casino gaming.

Ralston added that although the Legislature accepted the governor's Tax Task Force, lawmakers provided no funding for it, which raised the prospect that the panel might have to seek outside financial support from Whittemore and his wealthy friends in an obvious conflict of interest.

The Hobbs panel is charged with developing "one or more definitive proposals to carry out the state's need to provide additional revenue for state programs, to stabilize the tax base and to reduce the long-term structural deficit of the state budget."

That's a tall order and the panel should get cracking on it. But, as the Reno Gazette-Journal noted in November, legislative leaders were in no hurry to appoint their representatives to the group. "During the 2001 Legislature, talk of a tax review was shoved to the side as business interests, and many lawmakers, fought off a proposal by the state teachers' union to levy a business profits tax," the RG-J observed. The fatally flawed teachers' proposal would have created a mini-IRS to enforce the new tax.

So far, the gambling tax debate -- such as it is -- has proceeded along predictable lines with Sen. Neal warning that the big casinos would use the Sept. 11 terrorist attacks as an excuse to avoid any discussion of gambling tax increases.

And sure enough, Harrah's CEO Phil Satre was true to form when he spoke to the annual Governor's Conference on Travel and Tourism in Las Vegas last month. "The tax burden must be broadened to ensure that all businesses pay their fair share," Satre declared. "The gaming industry can't do this alone." But no one except Neal has said the gaming industry should assume the entire burden of new or increased taxes.

Satre, Whittemore and other casino spokesmen always say that the gaming industry should be treated just like any other business in Nevada. But gaming isn't like any other business. Under Nevada law, a gaming license is a privilege, not a right, and gaming licensees must follow much stricter rules and regulations than those that apply to other businesses. Therefore, the issue of whether casinos are paying their fair share of the tax burden is a legitimate part of the discussion.

In previous columns, I've urged governors and lawmakers to consider a one-quarter to one-half of one percent increase in the gross winnings tax on the very largest casinos. Casino owners could afford this tiny (4 to 8 percent) tax increase and earn good-guy points with their fellow Nevadans by surrounding themselves with school children and agreeing to share an infinitesimal portion of their huge profits with the state for the good of the children -- sort of a Clintonian approach to gambling taxes. Heck, for a small consultant's fee, I'd volunteer to organize a gala photo-op on the Capitol steps.

But seriously, any study of Nevada's tax structure that doesn't include an-depth look at gambling taxes is doomed to failure. Gov. Guinn and state lawmakers already know that, of course, but so far they've shown no inclination to bite the hand that feeds them, if you know what I mean (and I'm sure you do). To do otherwise would require political courage, which is in short supply around here these days.

GOOD DECISION: I applaud the Carson City Board of Supervisors' decision to place the Fuji Park and fairgrounds issue on the November ballot, and urge them to be guided by the will of the people. The final decision should NOT be made by the city manager, no matter what the district attorney says.

Guy W. Farmer, a semi-retired journalist and former U.S. diplomat, resides in Carson City.


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