Gaming industry taking no stance on business tax hike

SUN STAFF AND WIRE REPORTS

Nevada's teachers union is mulling seeking public approval of a tax on state businesses within the next three years to help keep up pace with overwhelming growth in public schools.

A tax of up to 5 percent on business profits may be necessary as soon as 2002 if the next legislature doesn't do enough for students and teachers, leaders of the Nevada Education Association said.

The 21,000-member group intends to present a petition to lawmakers before the 2001 session and could take the issue to the voters in the form of a ballot question the year after.

Ken Lange, the group's executive director, said the objective is to help broaden Nevada's tax base. The current structure aimed primarily at gaming and sales taxes isn't keeping pace with student growth, he said.

The money is needed for everything from textbooks to teacher salaries, he said.

By some estimates, revenue deficiencies for education could approach $100 million by 2001 and increase each year with the population.

"We have a tax system that is inadequate to meet the needs of the state," Lange said.

The new tax likely would include non-gambling revenues at hotel-casinos, officials said. Gambling revenues already are taxed.

So far, the idea has gotten a cold reception from business representatives, who fear that effects could range from higher consumer prices to discouraging businesses to help diversify the state's gaming- and tourism-centered economy from choosing Nevada.

"We do understand that we have to take a careful look at taxes," but such a tax could hurt business recruitment, said Chuck Alvey, president of the Economic Development Authority of Western Nevada.

Some companies that EDAWN has courted already have said their interest in Nevada would diminish with the tax, Alvey said.

Harry York, chief executive officer of the Greater Reno-Sparks Chamber of Commerce, said the chamber hopes to meet soon with a local teachers group to try to derail the tax.

The chamber, with 1,800 members, supported last fall's $178 million bond measure to build more schools in Washoe County but is concerned that a business profits tax could have dire effects.

"If we're trying to diversify this community and grow it in a different way, then this puts a giant damper on it," York said.

"If it goes forward, business will come back with standards that we're going to put on teachers."

The Las Vegas Chamber of Commerce weighed in on the issue last week when it urged people not to sign petitions seeking higher or new taxes.

"Nevadans have always enjoyed low taxes. Let's keep it that way," said Timothy Cashman, chairman of the Chairman's Government Affairs Committee.

The state's powerful gaming industry has not taken a position on the issue, said Greg Ferraro, senior vice president with R&R Partners in Reno and a spokesman for the Nevada Resort Association. The lobbying group is waiting for the outcome of the governor's promise to review the state's tax policy.

"I think it's pretty clear to almost everyone that watches government that gaming is far and away the largest single taxpayer, (and) one could argue that gaming is already carrying an inordinate load of that burden," Ferraro said.

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