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Increasing casino taxes could be disaster in Washoe County

From a vantage point in the center of the booming Las Vegas Strip, the casino industry may appear to be a prime target for those looking to raise more money for the state's schools.

Up here in Northern Nevada, where we've seen more casinos close than open in the past decade, it doesn't look like such a good idea.

Even before any voters have had a chance to sign the petitions that would put the Nevada State Education Association's proposal to increase the gross gaming tax by 3 percentage points, from 6.25 percent to 9.25 percent, on the ballot, the initiative is caught up in court. Taking a cue from the unions that have used the courts to keep a property-tax limitation off of the ballot, the gaming industry has filed suit to prevent Nevadans from ever voting on the gaming tax issue.

The fight also has turned ugly. There are still nearly 11 months until the next election and any tax increase would have to be approved by voters twice, in 2008 and 2010, but on Thursday, Terrance Lanni, chairman of the board of casino giant MGM Mirage (owner of Circus Circus and part owner of the Silver Legacy in Reno), took direct aim at the teachers union, suggesting that the Legislature impose a pay-for-performance model on the schools and alleging that "there are a certain number of teachers who are not competent."

Arguments of that nature aren't going to help either the gamers, who depend on the state's schools to fill jobs, or the teachers, who need the support of the state's No. 1 industry if they ever hope to convince the Legislature to increase funding for the schools.

But there are good reasons, both philosophical and practical, to oppose an initiative that targets a single industry to fund the educational system that is mandated in the Nevada Constitution.

From a philosophical view, all Nevadans should share in the costs of the schools and, if there are to be business taxes, all businesses should be taxed equally.

For the practical view, one needs only to look at the most recent monthly report of the Gaming Control Board, released last week.

According to the GCB, Nevada casinos raked in a single-month-record $1.16 billion in October. More than $1 billion of that was won on the Strip, a nearly 13 percent increase over the same month a year earlier.

At the same time, Washoe County casinos suffered an 8.6 percent drop from October 2006, the fourth consecutive monthly drop.

It's a trend that has continued largely unabated since the rise of Indian casinos in California, and, as a result, smaller casinos have closed and larger casinos are struggling. Also as a result, there have been no investments in new casino properties in the Reno-Sparks area recently, and the investments in existing properties have been limited.

Adding to the tax burden on those poorly performing casinos will only make it less likely that we in the north will see any new investments in the industry that we depend on for the majority of our tax revenue.

That may be acceptable in Clark County, where construction of megaresorts continues, but in troubled Washoe County it would be a disaster.