Las Vegas Sun

May 6, 2024

Columnist Jeff German: Casinos, home builders must pay more for growth needs

IF SOUTHERN NEVADA is to meet its growth needs in the coming decade, billions will have to be collected for infrastructure.

By now, you've heard that local and state elected leaders are working hard to come up with a plan to spread the cost to as many people as possible.

The task hasn't been easy, and last week it deteriorated into juvenile bickering among the hard-pressed officials.

But there are signs that a reality check has set in and everyone now knows they have to work together if the complicated pieces of the puzzle are going to fit.

This week, Southern Nevada's home builders, following the lead of the casino industry, stepped to the plate and offered to contribute to the infrastructure fund.

The home builders offered to add $11 million a year to the pot with a hike in the transfer tax on real estate sales. The increase would tack on another $155 to the sale price of a $120,000 home.

Last week, the casino industry proposed a 1 percent increase in the room tax that would bring in $17 million a year, and it agreed to give up $10 million annually from the special events budget of the Las Vegas Convention and Visitors Authority.

Some have praised the casinos and home builders, who've been benefiting the most from Southern Nevada's economic boom, for recognizing that they must contribute.

But others remain skeptical of their offers, and for good reason.

They say the proposals merely are pass-through measures that have little effect on the profits of the thriving industries.

The room tax, for example, will be added to a tourist's hotel bill and isn't likely to discourage visitors from coming to Las Vegas, which boasts of being one of the best tourism values in the country.

Gaming won't be giving up any money at all here.

The same goes for the transfer tax on home sales. The extra $155 will be passed to the home buyer, not the home builder.

It has led some to conclude that both industries, with their high-powered lobbyists and record of heavy campaign contributions, are merely creating the illusion that they're pitching in.

The taxpayers, in the meantime, are being asked to accept a quarter-cent sales tax hike to help pay for a new $1.7 billion pipeline that will carry Southern Nevada's water needs into the 21st century.

Such a tax increase, supported by casino bosses and developers, has a direct impact on the pocketbooks of everyone. But it hits the little guy the hardest.

Veteran lawmakers are beginning to see that what's being offered by the casinos and home builders is a piecemeal solution that won't address the long-range problem.

They see that both industries will have to kick in real money, a lot of it, toward the ultimate infrastructure solution.

Lawmakers responsive to their constituents know the public doesn't mind contributing as long as those benefiting the most from the state's economic fortunes are paying their fair share.

The public is tired of being nickeled and dimed to death with a sales tax hike here, a DMV fee raise there and so on.

As the Assembly's Infrastructure Committee, chaired by Assemblyman David Goldwater, D-Las Vegas, begins addressing this issue, it needs to understand that underlying premise.

Goldwater is a bright, young legislator who has a good future in Nevada politics.

But to some, he's developing a reputation for being too easily influenced by those who wield clout in Carson City.

Most attribute that to ambition and a lack of experience.

It's true that you have to play the game with the power brokers if you want to advance in politics.

But the smart polticians know the ultimate power lies in the masses, the voters who elected them to office.

As a public official, you have to please everybody, not a select few.

The argument casino bosses advance when deflecting attention away from their coffers is that the industry can only carry the state for so long.

Gaming, after all, they say, already pays 50 percent of the money into the state's general fund.

Frankly, there's some merit to that argument. Nevada does need to diversify its tax base.

But at the same time, there's something fundamentally wrong with allowing the rich to get richer and the poor to get poorer as we strive to meet our growth needs in the next century.

It's great that the casinos and home builders have stepped to the plate in the infrastructure game.

Now let's see them hit a home run.

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