Las Vegas Sun

September 18, 2019

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MEMO FROM CARSON CITY:

Don’t buy faux benevolence in tax debate

Terry Lanni

Terry Lanni

Nevada’s mining, gaming and business interests spend a lot of time telling policymakers and the public that they care about the state: Mining works for Nevada; what’s good for gaming is good for the state.

The assumption is the bundles of $10,000 contributions by these companies’ various LLCs — enabled by porous campaign laws — are bestowed by altruistic uncles who truly care for the betterment of Nevadans.

Then came a voice from the past, someone safely retired and outside the bubble: Terry Lanni, former CEO of MGM Resorts, told the Sun that, yes, the state needs a broad-based business tax. It needs to protect its education system. But when the company made its endorsement in the 2006 governor’s race, narrow self-interest prevailed.

The company backed Jim Gibbons simply because he was least likely to raise taxes on the industry, Lanni said in an interview last month.

“You’re looking to protect yourself,” he said. “I never thought we’d have a broad-based business tax in Nevada. Not in the foreseeable future.”

Gaming, mining and other big industries have amassed impressive influence at the state level, rivaled only by unions, in part by creating an aura of benevolence.

Lanni’s statements were a pin in that balloon.

Consider: The Nevada Legislature won’t take up a tax increase without the backing of gaming and mining. The business community, represented by the Las Vegas Chamber of Commerce, was key to supporting a tax package in 2009.

Legislators went hat-in-hand to industries during a 2010 special session, looking for their approval to raise their fees.

Gaming said no. Lawmakers complained, but did nothing.

It might seem obvious from the average underwater Las Vegas homeowner. But in Carson City, it’s sometimes easy to forget that these corporations, industry lobbyists and public employee unions are looking out for their own interests, which may or may not align with yours.

That’s not to say that good corporate citizenship doesn’t happen.

Gaming lobbyist Billy Vassiliadis said industry leaders today are residents. University buildings and cultural centers carry their names.

“Go to one of the weekly charitable events, tell me if gaming is committed or not,” he said. “These are people who raise their kids here, use parks and schools and roads. These are not guys removed from day-to-day realities of the state.”

He said gaming’s 2010 rejection of fee increases was an anomaly. “I can’t think of a single time other than last special session, when it was time to raise taxes, to construct schools, for more highways, that gaming has said no,” Vassiliadis said.

But Lanni was not done.

“There’s virtually no tax on mining,” he said. “They’ve written that into the constitution themselves. They’re all Canadian companies or outside interests who have a significant tax advantage.

“Nevada needs a broader tax. Too many people get a free ride,” he said.

Mining, booming thanks to record gold prices, has been pushing a broad-based business tax along with its gaming brothers, while fending off calls to increase its contributions to state coffers.

“Our record is quite good at putting our money where mouth is,” said Tim Crowley, president of the Nevada Mining Association. “We believe in Nevada. Our kids are raised here, we consume services.”

He said mining supported taxes in 2003, 2009 and higher fees in 2010.

Bob Fulkerson, executive director of the liberal advocacy group Progressive Leadership Alliance of Nevada, noted that three of the five biggest mines in Nevada are foreign-owned.

Meanwhile, Nevada’s poorest pay a higher percentage of their income in taxes than the rich, a byproduct of Nevada being one of three states without a business profits tax.

Yet calls for a broad-based business tax from gaming, mining and other corporate interests are “a scam they’re playing session after session, so they can say ‘don’t single us out.’ ” If they truly want one, “Where’s their plan? What kind of campaign have they been running? Where’s the public education campaign, the leadership?” Fulkerson said.

“I see a lot of song and dance,” he added.

Except, maybe, from those who are retired and out of state.

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