Casinos in Nevada are planning to sabotage an effort that would bring a major hike on gaming tax on the ballot. The casinos are looking for delays or derailment of the ballot initiative.
NRA moves ahead
The Nevada Resort Association (NRA), which represents some major casinos in the state, has filed a lawsuit against the ballot effort in the Carson City District Court. It is picking up holes in the language to ensure that it doesn’t move forward.
The petition for the ballot is being led by a teachers’ union called Clark Country Educational Association (CCEA). They are proposing a 3% tax raise for the casinos which could bring $350 million per year in additional tax revenue for the state.
The union has also filed a ballot initiative separately to increase the Local School Support Tax (LSST) by 1.5%. The union hopes that both the motions will add an extra $1.4 billion to boost the state’s education system, especially the K-12 education program, which remains underfunded.
Nevada’s casino taxes are too low
Casino taxes in the state of Nevada are the lowest in the country (outside of Indian territories). The state charges a 6.75% tax on gross gaming revenues. Adding fees, the effective tax rate is 7.75%. Considering that casinos have historically helped fuel the state’s economic growth, the state has remained protective of the industry. If the ballot result doesn’t favor the casinos, it may be harmful to the gambling industry.
According to the NRA, the CCEA has inaccuracies in the “Description of Effect,” which is the blurb that describes what the voters in the ballot are voting for. It also notes that the CCEA has provided the wrong dates on which law would take effect. It also fails to explain that money generated from new taxes would not be sent directly to schools, but to the general fund of the state. It claims that the description would “mislead voters” as the lawmakers are not dutybound to use the money generated by the taxes for education.
The CCEA would need 98,000 signatures by November 2020 to make their initiative successful. If they achieve this goal, they will send the question to the legislature. If the lawmakers do not pass the measure, it will go directly to a public vote.
Note that Nevada has consistently ranked at the bottom of the education rankings. It was 50th out of 50 states and DC education rankings in 2019.