Las Vegas Sun

March 28, 2024

State Senate delays vote on room taxes

After several hours of questioning, mainly from Republicans, the Democrat-led state Senate put off a vote on a 3 percent room tax on hotel rooms in Las Vegas and Reno that would help deal with Nevada's widening budget crisis.

After the Senate adjourned late Monday, Sen. Terry Care, D-Las Vegas, who presided over a full-Senate hearing on the tax plan, said lawmakers have until a Friday deadline to endorse the proposal _ which already has public support from Reno- and Las Vegas-area voters.

In a November advisory question, 66 percent of voters in the Las Vegas area and 57 percent in the Reno area backed the increase.

As a result of the public support, GOP Gov. Jim Gibbons, who opposes higher taxes, said he'd also support the plan. Last October, major Nevada casinos and the Nevada State Education Association, a teachers' union, delivered more than 130,000 signatures supporting the tax increase.

Care said that by Friday's deadline senators can either sign off on the proposal to collect higher room taxes _ mainly from tourists _ or produce a competing plan. If there's a rival plan, both would end up on the ballot in 2010. With no legislative action, only the 3 percent plan would be on the ballot.

Senate Minority Leader Bill Raggio, R-Reno, said at the close of the hearing that without legislative approval of the room taxes there's about $233 million in expected general fund revenue over the next two fiscal years that will have to be found elsewhere to avoid more budget cuts.

The state Assembly already has approved the plan, on a 35-7 vote with all 28 Democrats and seven of 14 Republicans voting in favor.

During Monday's hearing before the entire Senate, Kim Sinatra, Wynn Resorts general counsel, Station Casinos and Harrah's continued to back the increase despite the financial woes of the gambling industry.

Sinatra acknowledged her company agreed to back the NSEA room tax petition in exchange for the teachers' union decision to drop a petition to increase the gaming tax by 3 percentage points.

Even with the increase, Sinatra said the room tax rate in Las Vegas would be below rates charged in New York, Chicago, New Orleans, San Francisco and most other convention cities.

Under the petition, money from the room tax could be used during the next two years on general budget shortfalls. Starting in July 2011, the money must be used to raise teacher salaries or improve the performance of students.

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