Why is CCEA’s casino tax hike proposal so small?

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Ethan Miller/Getty Images
modern times
Ethan Miller/Getty Images

The Clark County Education Association endorsed Bernie Sanders and unveiled a proposal to hike Nevada’s gambling, er, gaming tax rate Tuesday.

So a pretty newsy day for your local teachers union.

The union is promising it will announce a second tax initiative sometime this week. They’re not identifying it yet, but say it could bring in more than $1 billion above and beyond the $315 million that would be raised from hiking the tax on the resort industry’s gambling revenue.

When the union announced late last year that it was going to ask voters to approve more money for schools, CCEA Executive Director John Vellardita specified the proposals would be taxes that could be raised by initiative, that is, not taxes that would require constitutional amendments.

Nevada’s state constitution imposes multiple barriers on raising revenue for education and other public services, including a prohibition of personal income taxes.

An income tax, even a small one that only applied to, say, the top 10 percent of incomes, would be the fairest and most efficient way to generate a billion dollars (or more) of revenue for schools. But unless the union has changed its mind, income taxes are off the table.

Meanwhile, along with the details of CCEA’s other tax initiative, we’re left with another question:

Why is the union’s proposed gambling tax hike so small?

Raising the rate by 3 points from 6.75 percent to 9.75 percent would finally at long last mean Nevada would no longer have the smallest casino tax rate in the nation. But not by much. South Dakota’s is 9 percent. New Jersey’s is 9.25 percent.

The union estimates its gambling tax hike would generate an additional $315 million. That would bring the total gambling tax revenue in Nevada to a little more than a billion dollars.

Although Pennsylvania’s gambling market is about one quarter the size of Nevada’s, Pennsylvania collects almost $1.5 billion in gambling taxes — the most of any state, and roughly double what is collected from the industry in Nevada. Pennsylvania also has a 54 percent state tax rate.

New York’s gambling market is about a fifth the size of Nevada’s. And if the union’s casino tax hike passes, Nevada would collect about the same in casino tax revenue that New York collects now with its 10 percent rate on table games and 45 percent rate on machines.

How the union’s casino tax proposal, or its forthcoming proposal, plays out politically with a governor and lawmakers who routinely behave as a wholly owned subsidiary of the resort industry remains to be seen.

But especially given Vellardita’s reputation, by no means unfounded, of being a hard-charging bull in Nevada’s policy and political china shop, the union’s opening gambit seems awfully small.

Correction: This item originally reported Nevada constitutional prohibitions on income taxes incorrectly. 

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.