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Ed Vogel

Petition to triple gaming tax nearly set

16 November 2007

CARSON CITY, Nevada -- (PRESS RELEASE) -- Las Vegas lawyer Kermitt Waters said Thursday that within two weeks he expects to file his initiative petition to let citizens decide whether to triple the casino gaming tax.

Waters said he was pleased by the support shown by Nevadans for his proposed 20.2 percent gaming tax rate in a Zogby International poll he and former District Judge Don Chairez commissioned earlier this month. Most casinos now pay a gaming tax of 6.75 percent.

Slightly more respondents favored Waters' higher tax rate on casinos than a 3 percentage point tax increase sought by the Nevada State Education Association in a separate petition, Waters said. Just 6 percent said they did not like either proposal, he said.

The teachers union is expected to file its petition next week.

Waters said he and Chairez "are still evaluating" the Zogby results.

Rob Stillwell, vice president of communications for Boyd Gaming, called Waters' petition "just a bad idea."

"Every person who lives in Nevada and every business in the state has a vested interest in the quality of education and our infrastructure," Stillwell said. "The idea of polling to determine which is the best course of action flies in the faces of why we elect our government representatives. That is where the problem should be addressed."

But one of Waters' points is that the initiative would make changes that campaign donation-influenced legislators will not.

"We propose doing things that you would never get out of the Legislature," Waters said.

For starters, Waters wants to use some of the additional tax revenue to cover the costs of property taxes on the primary residence of every homeowner in Nevada. Residents would not have to pay any property taxes on their primary home if his petition ultimately is approved by a larger margin than the proposal from the teachers' union, he said.

He also wants to set aside enough money to cover the shortfall in highway construction funding and to construct water desalination plants that would alleviate the water shortage problem in Southern Nevada.

After the petitions are filed with the secretary of state, Waters and the NSEA can circulate them among residents.

Zogby asked 507 Nevadans by telephone whether they favored Waters' proposed 20.2 percent tax on casino winnings, or a 9.75 percent tax sought by the Nevada State Education Association in another petition.

The poll initially found 45 percent of respondents favored the NSEA petition, while 43 percent thought his petition was better.

But when respondents were told how Waters' petition would use the additional tax revenue, 50 percent said they favored his tax increase plan, compared to 43 percent for the lower tax increase sought by teachers.

The polls results have a 4.5 percentage point, plus or minor, margin of error.

Waters said support for his petition might have been larger, but Zogby asked more Republicans than Democrats to respond to questions. More registered voters in Nevada are Democrats than Republicans.

The results differ from a poll commissioned by the Review-Journal in October. That poll found 3-1 support for the teachers' union petition, but foresaw defeat for Waters' petition.

Only 39 percent of respondents backed his petition, while 50 percent opposed it, according to the newspaper's poll.

Waters said the newspaper's pollsters should have told respondents that the higher tax increase he seeks would make the gaming tax rate in Nevada equivalent to the average rate around the country.

If that information had been provided, the number of people in support of the proposal would have been higher, Waters indicated.

Circulators of the petitions will need to secure at least 58,628 valid signatures for the petitions by May 20. If they do, the proposals would appear on the election ballot next November. They must pass then, and again in 2010, for the higher tax rates to go into effect in 2011.

If voters approve both petitions, the one with higher percentage of favorable voters would become law.

Waters said his proposed gaming tax rate would bring in more than $2 billion a year in additional revenue.

The Gaming Control Board reported earlier this year, however, that the entire gaming industry earned $2.1 billion in profits in 2006.

Waters is skeptical about that report.

"They pay 30 percent, 40 percent and 50 percent tax rates in other states and take money out of here to build casinos there," Waters said. "It doesn't make sense. All we are doing is asking them to pay the average tax rate."

Waters said his proposal is to use the gaming tax revenue as follows:

$800 million to replace property taxes paid by residents on their primary homes. Property owners no longer would pay any property taxes on their primary residences.

$700 million to the Nevada Department of Transportation for highway construction projects.

$300 million a year to teachers for salary increases.

$200 million a year to the Public Utilities Commission for development of solar and wind energy.

$200 million for construction of water desalination plants on the Pacific Coast. Communities there would use the water, and Clark County would take an equal share of their allocation of Colorado River water flowing into Lake Mead.

$25 million for support of the Millennium Scholarship program.