Could raise $315m a year
Teachers in the Las Vegas area are asking voters in the state of Nevada to support a tax hike on the largest casinos in the state to raise additional funds for education.
This tax hike would require a constitutional amendment, hence why the public would have to vote on the issue. Teachers believe that as much as $315m could be generated each year as a result of such a hike.
would require a constitutional amendment, hence why the public would have to vote on the issue
John Vellardita, executive of the union, shared his thoughts on the proposal, stating: “It [Las Vegas] has the lowest tax in the country and even with this increase it still would be below the national average. We don’t think it will hurt the industry. We think the public supports it.”
Push for a constitutional amendment
A petition has been filed on the issue with officials working on the state election. The main sponsor for this petition is the Nevadans for Fair Gaming Taxes, a newly-formed committee for political action.
This measure has also received the backing of the Clark County Education Association. However, almost 98,000 signatures from registered voters would be needed before November 2020 in order for this proposal to make its way onto the election ballot.
If the measure was approved by voters, this tax rate increase would take effect during the 2021 legislative session. Otherwise, it would have to go back to another public vote in 2022. If this second vote was successful, then the changes would come into place in 2023.
Proposed changes to the tax rate
The goal is to have a fourth tier added to the current tax system on casinos in the state. This would see a 9.75% tax imposed on casinos that report gross revenue in excess of $250,000 on a monthly basis.
The teacher’s union doesn’t believe that a tax hike would hurt the casinos or their operations. There has not been an increase in the Nevada gambling tax rates since 2003. Back then, the tax hike came as a result of a battle in the legislature regarding funding for schools.
In recent years, Nevada has consistently been at the bottom of the rankings in terms of funding being injected into educational schemes.
Plans for another initiative
There are also plans to lodge a potential second initiative. This would see over $1bn generated each year for education in the area.
No firm details have been provided as of yet about this potential second initiative. The only thing that is known is that it is not related to marijuana or gaming.
Three-tier casino tax system
In its current form, there are three tiers to the tax system for casinos. The highest level of this system is a 6.75% tax for casinos with monthly revenue above the $134,000 mark.
The Nevada Resort Association represents more than 70 gambling resorts in Nevada. It is not in favor of this proposed tax rate increase. It says that such a move would be
damaging to the state’s economy, job creation, capital investment and future economic development.”
Almost 40% ($68bn) of the entire state’s general fund revenue comes from the gaming industry each year.