Study: Gaming industry pays too much tax

A study released Thursday by the Nevada Resort Association argues that the state's tax structure "places a disproportionate burden on the gaming industry and its employees."

The study, prepared by financial analysts Arthur Anderson and the UNLV Center for Business and Economic Research, said gambling provides 53 percent of the state's taxes but accounts for only 21 percent of the state's work force.

That equates to $2,657 in state taxes paid by the gaming industry per employee compared to $601 paid by employees in other industries.

Other conclusions in the study:

Bill Bible, president of the Nevada Resort Association, the lobbying arm for major Southern Nevada hotels, said the study shows gaming is subsidizing the delivery of services to the state's rapidly growing population.

He argued for spreading the tax burden away from the resort industry.

"Nevada cannot continue to expect the gaming industry to pay for all of its growth," Bible said. "Other sectors of the economy will simply have to shoulder some of the burden in the years ahead. We cannot continue to have 21 percent of the population pay for services used by the other 79 percent."

The study was prompted by a 1997 proposal by state Sen. Dina Titus, D-Las Vegas, to restrict development outside the Las Vegas Valley in Southern Nevada. Arthur Anderson analyst Steve Comer said the proposal was seen as a "double whammy" on the casino industry.

On the one hand, development of new gaming areas would be limited, and on the other, the industry would have to pay an increasingly large bill for social services as the population continued to grow, Comer said.

Comer said the study reinforced earlier studies that found that the cost of government services grows "lock-step with population growth."

Nevada's population is growing the fastest in the nation in percentage terms, now adding about 60,000 people a year.

Bible avoided saying how taxes could be shifted off casinos. Some possible changes, such as hiking property taxes, would still hit resorts hard.

He mentioned one alternative -- a business activity tax now being promoted by the state's teachers union. The proposal would impose a 5 percent tax on business profits excluding gaming proceeds and companies making less than $25,000 a year in net profits.

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