What every Nevadan should know about Wynn’s new Boston casino

now, clearly
Wynn Resorts' $2.6 billion Encore Boston Harbor opened Sunday (Photo: Encore Boston Harbor Twitter)

If Nevada doubled the gambling, er, gaming tax, the rate would still be about half what casino corporations pay in Massachusetts.

Wynn Resorts opened a $2.6 billion casino resort in Boston Sunday. MGM opened a billion-dollar property in western Massachusetts last year.

Nevada taxes gambling at 6.75 percent of gross revenue.

In Massachusetts, it’s 25 percent.

Home of the nation’s largest gambling industry and headquarters for the world’s largest gambling corporations, Nevada also sports the nation’s lowest tax rate on casino revenue.

Economically, politically and culturally the state’s dominant industry, resort corporations are treated with kid gloves in Nevada. As a result, Nevada must rely on other sources of revenue to pay for schools and all the other public goods, services and obligations that were underfunded yet again by the Legislature this year.

The biggest source of state revenue is the sales tax, which hits low-income people the hardest.

The sales tax is also the only tax Gov. Steve Sisolak and the temp workers who fill Nevada’s legislative seats approved hiking this year. Or to be precise, they gave counties the authority to raise the sales tax. 

Oh well. The Legislature is over, because Nevada likes to think it’s a big grown-up place in some ways — did you know Las Vegas is getting a football team? — while pretending it’s a sleepy little backwater in others, such as relegating state lawmakers to a structurally cheesy and geographically inane 120-day session every other year.

So there’s nothing that can be done about anything until the next time duly elected temps go to Carson City, in 2021.

Although…

The aforementioned tentative county sales tax increase is anything but a slam dunk. And it’s just one piece of the contraption Sisolak and legislative Democrats cobbled together to try to keep some modest promises to educators.

Another key component, which the governor and legislators did approve and is now law, kept a payroll tax in place that was scheduled to expire. “Unconstitutional,” screamed Republicans & Friends, who argue that continuing a tax that was scheduled to expire is tantamount to increasing taxes. Taxes can’t be increased without a two-thirds approval of both houses of the Legislature, because Nevada voters approved a constitutional amendment that said so toward the end of the last century.

Republicans have been under pressure from their brain trust, i.e, the Review-Journal opinion page, to sue the Democrats over the tax. (Presumably that means the brain trust’s funder, Sheldon Adelson, would be down with footing the attorneys’ fees?).

Republican skittishness about suing would be understandable. If they sue and lose, Republicans could set a policy precedent they don’t want to set.

But neither prudence, caution nor thoughtfulness being part of the Republican Party brand in Nevada or anywhere else these days, they may well do what Adelson’s paper says, and sue.

And they might win.

In other words, the budget that the governor and lawmakers passed in 2019 could unravel well before the Legislature is scheduled to meet again in 2021

Like most states, Nevada gives it’s governor way too much authority (with the 4th of July coming up it should be noted that of the many causes that created the American Revolutionary moment, yearning for strong executive authority at the expense of legislative power was not one of them). If county resistance and/or a court ruling blows a hole in a budget that’s already been approved, a constitutionally powerful governor’s office might find ways to muddle through until legislative temps are back on the state payroll two years from now.

But why bother?

Nevada’s lawmakers were called into a special session in 2014 to give Tesla $1.3 billion in tax breaks, subsidies in the form of salable tax credits, and other goodies. Two years later, the temps were called back to Carson City for another special session to rubber stamp a $750 million public subsidy, financed by increasing room taxes, to build a football field for a professional sports monopoly.

Why not call a special session to finally fund education?

Everyone knows where to start. The state’s Lilliputian gambling tax rate insults and humiliates the people of Nevada each and every day. The industry is committed to expanding not only around the world but into more U.S. cities, where the industry will pay gambling tax rates four or five or more times higher than Nevada’s rate. Digging in to protect their Nevada sweetheart deal while low-income taxpayers pick up the slack and Nevada public responsibilities languish and suffer, Nevada’s beloved gambling industry plays Nevada residents for chumps.

Maybe county commissioners will do as Sisolak and Democratic legislators say, and make poor people pay even more of their income in sales taxes. And maybe cooler Republican heads (there are some, presumably) will prevail and there won’t be a suit over retaining current payroll tax rates.

And maybe everyone who isn’t Sisolak or Democratic legislators can just keep doing what they’ve been doing since the legislative session ended: being disgusted at how the state failed education yet again, and hoping beyond hope for better results two years from now.

But sooner or later, something’s got to give. And that something is the resort industry.

Oh by the way, the other big education thing out of the session was a revised funding formula that rural Nevadans are not happy about at all.

One wonders if Republicans who represent those rural Nevadans in the Legislature might be getting in the mood to tax Las Vegas casinos.

Hugh Jackson
Editor | Hugh Jackson has been writing about Nevada policy and politics for more than 20 years. He was editor of the Las Vegas Business Press, senior editor at the Las Vegas CityLife weekly newspaper, daily political commentator on the Las Vegas NBC affiliate, and wrote the then-groundbreaking Las Vegas Gleaner, which among other things was the only independent political blog from Nevada that was credentialed at the 2008 Democratic National Convention. He spent a few years as a senior energy and environmental policy analyst for Public Citizen, and has occasionally worked as a consultant on mining, taxation, education and other issues for Nevada labor and public interest organizations. His freelance work has been published in outlets ranging from the Guardian to Desert Companion to In These Times to the Oil & Gas Journal. For several years he also taught U.S. History courses at UNLV. Prior to moving to Las Vegas, he was a reporter and then assistant managing editor at the Casper Star-Tribune, Wyoming’s largest newspaper.

3 COMMENTS

  1. Funding for education is very well funded at the rate of over $2 billion annually. The amount of the funding for education in Nevada should be sufficient for a competitive education system, especially when many of the schools are not 100 years old like many on the East Coast and have air conditioning unlike I had when I was a student in New Jersey in the 1980s and 90s.

    The money is there, where it is being spent is why the results are so poor. You never hear about the over 5,000 Clark County School District employees that are paid over $100,000 per year. None of them are teachers. What you have is a corrupt district combined with corrupt unions that are only out for their own wallets and not the betterment of education.

    Governor Sandoval was praised for his efforts in increasing education funding. People forget that in 2015, the tobacco tax was raised by $1.00 per pack to help fund education. Two years ago, marijuana was legalized and that was to add to education funding.

    More funding will provide little in terms of results. Ask the State of New Jersey and how Abbott Districts have bled the taxpayers dry. In Asbury Park, over $40,000 per year is spent per student and the graduation rate is around 50 percent.

    It is never ask what you did with the billions you received, it is always ask for more. The problem is a lack of accountability of precious taxpayer resources.

  2. Thanks Hugh,

    Nice article, but you forgot to add in the corporations who own the mines and the pitiful tax that they are required to pay.

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