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Property Tax Debate Biggest Concern For Gaming Industry7 February 2005
By Howard Stutz
Gaming's largely unsuccessful lobbying efforts in the contentious 2003 legislative session led to some fractures within the industry.
But as state lawmakers prepare to meet once again in Carson City on Monday, most believe casino leaders are united in one concept -- to closely monitor the expected debate on property taxes but remain relatively hidden from the public discussion.
The casino industry has been affected by the sudden increase in assessed land values, with the tax bills for some gaming companies jumping upward of 30 percent last year. The industry, which is also the state's prevailing employer, also has concerns about how rising property taxes effect the wallets of their workers.
"Obviously, the property tax debate is something we will watch closely because it's an issue that impacts not only us as a company, but our employees," said MGM Mirage Senior Vice President Alan Feldman, whose company is the state's largest real estate taxpayer and is facing the biggest increases. The company also employs some 36,000.
"We have a vested interest in this issue and we believe a level-headed response to the property tax situation is needed," Feldman said.
Casino executives and lobbyists, as well as legislators, all said the industry isn't going to be an "out in front player" during the upcoming session, especially on the property tax matter. While some tax matters stemming from 2003 -- such as changes to the entertainment tax -- could be thrashed out, no one is proposing an increase in the gross gaming tax paid by casinos on their earnings, currently 6.75 percent.
Most insiders believe gaming as a whole has minimal issues that it will bring up during the 120-day session.
"I just don't see gaming as having the agenda like it's had in the past," said Assembly Speaker Richard Perkins, D-Henderson. "Previously, gaming has introduced legislation regarding some key regulatory matters, but I haven't seen any such proposals in the current bill drafts."
The Democratic leadership's announcement of a proposed state lottery to fund education may pique the gaming industry's interest depending on how the matter is debated.
Lowering property taxes, however, will be an issue that interests gaming.
One lobbyist said there may be 14 different property tax proposals in the system by the time the Legislature convenes, but only a half-dozen that could be termed "workable solutions."
Gaming doesn't plan to propose its own property tax solution, and as such, take a major role in the debate.
"It seems like gaming is just going to keep a low profile and almost stay out of the way," said Senate Minority Leader Dina Titus, D-Las Vegas. "Gaming is going to have an interest in the property tax debate, but it doesn't seem like they want to introduce anything that could be termed `gaming's bill' because of what happened in 2003."
R&R Partners Chief Executive Officer Billy Vassiliadis, lead lobbyist for the casinos, said the industry plans to monitor the property tax discussion, but it won't be an energetic contributor.
"We have an interest in the matter and we'll participate somewhat in the debate, but the industry is not going to be out in front," Vassiliadis said. "Gaming doesn't have any rock star-type stuff to bring up during this session. We really don't have that aggressive of an agenda."
Feldman said the industry wants to be assured that the fees and taxes other business groups agreed to pay in 2003 will remain.
"We want to make sure the folks who made certain commitments to participate in funding the state's necessary services won't try and weasel out," Feldman said. "We're concerned about health care and the related issues, but other than some general monitoring, I don't think industry is going to be an aggressive player."
In 2003, casinos pressed hard for a broad-based business tax based on revenue, while lobbyists for small businesses, banks and retailers first advocated sales taxes on services then switched to calling for increased payroll taxes.
The gaming industry's gross receipts tax never had much support and was later repackaged as the Unified Business Tax, a revenue-based levy that would have exempted small businesses and allowed companies to offset their revenue by the expense of their products. The Unified Business Tax proposal also failed to generate momentum.
Following the 2003 session, MGM Mirage pulled out of the Nevada Resort Association -- the industry's primary government affairs vehicle -- as well as the Nevada Development Authority and the Las Vegas Chamber of Commerce.
At the time, MGM Mirage Chairman Terry Lanni said the company could pursue its own political agenda more effectively than it could by relying on trade associations.
Feldman said MGM Mirage has hired its own lobbyists for the 2005 session, but will consult with the resort association and other gaming industry members while pursing its agenda.
"We'll be engaged on issues with the resort association that affects the gaming industry, but for the most part, we believe we can best handle our company's needs with our own lobbying team," Feldman said.
Resort Association President Bill Bible said the group has always worked well with both members and nonmembers on shared goals. Because he believes gaming does not have a laundry list of matters it is seeking to bring before lawmakers, the split by MGM Mirage isn't significant.
"I see the industry more in a reactive mode rather than one where we're active participants during this session," Bible said. "We'll make sure the issues our membership are concerned about are covered, but there are not any major proposals we are looking to bring to the table. We'll continue to maintain a productive relationship with our nonmembers as well."
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