Governor urges Neal to abandon casino tax hike push

LAS VEGAS - Gov. Kenny Guinn called on proponents of a casino tax increase to abandon their petition drive, labeling the plan divisive and destructive.

Sen. Joe Neal, D-North Las Vegas, and the Nevada State Education Association are pushing a petition drive that would boost the tax rate on casinos generating more than $1 million in monthly revenue from 6.25 percent to 11.25 percent.

"I am not questioning the motives of those who are behind these initiative petitions," Guinn said Wednesday in remarks prepared for the Nevada Taxpayers Association. "But the effects of those efforts pit our major industry against taxpayers and the business community against educators. It is divisive, it is destructive, and it will tear apart our state."

Guinn said he would not stand by and watch that happen, adding he would "travel to every corner of our state and work against these efforts."

The governor called on Neal and the NSEA to join him in seeking long-term economic solutions.

Neal said his group would be willing to discuss the issue with the governor and indicated there might be room to negotiate the amount of a tax increase if talks were to result in a special legislative session.

But he rejected the call to abandon the initiative process and disputed the notion that the petition drive is hurting the state.

"I don't feel it's divisive or destructive," he said. "It's a process that is left available to the public when the Legislature fails to act."

"If he's calling that divisive then he's calling the constitution divisive," Neal said.

The governor's appeal came as the Nevada Resort Association announced the results of a survey which concludes the state's tax structure is dependent upon casino revenues but exempts other businesses from their fair share.

Last month the Taxpayers Association said Neal's plan should be rejected.

NTA chairman Fred Gibson said the proposal targets resorts and could become punitive over time, "sending a negative message to businesses looking to expand or to relocate from other states."

Carole Vilardo, NTA president, said the organization surveyed its 50-member board and got 37 responses - all in opposition.

To qualify the initiative for the Legislature in 2001, Neal must get 10 percent of the voters in 13 of the 17 counties to sign a petition favoring the plan by Nov. 14.

If the petition qualifies and the Legislature rejects it, it goes on the ballot in 2002 for a decision by voters.

Neal estimates the increase would raise $388 million a year in new taxes. Forty-five percent of the money would go to public schools, 38 percent toward reducing the motor vehicle privilege tax, 8 percent to raising Nevada Highway Patrol employee salaries, 7 percent to economic development and 2 percent to fighting gambling addiction.

Guinn told the taxpayers group that he had trimmed $251 million out of the state budget and had instructed cabinet and department heads that upcoming budget requests "include not one dollar more than has already been budgeted for this coming fiscal year."

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