They are now in the initial stages of a war that will only intensify over the next year, but both sides—the state’s teachers’ union and state’s gaming industry—will tell you this is how it started:
Over the course of the past eight decades, the state, largely on account of gaming, has experienced inordinate growth. Yet, the state’s lawmakers have retained the same tax structure, almost solely relying on one source, the gaming industry, since the 1930s. And so now, the needs of the state overwhelm the tax structure, and the governor has pledged himself against new taxes, leaving many of Nevada’s services in disarray, and desperate for financial help. Perhaps none more so than education, which both sides agree is simply inadequate in this state.
Both sides have lobbied the Legislature to broaden the tax structure to suit the needs of the ever-growing state. “For whatever reason,” says Lynn Warne, president of the teachers’ union, the Nevada State Education Association, “nothing has come to fruition.”
And so, without any other recourse, says Warne, the union filed on November 19 an initiative petition to raise the gaming tax by 3 percent on casinos that gross more than $1 million per month. That additional tax revenue—estimated anywhere between $250 million and $400 million a year—would go toward education, starting in 2011.
The gaming industry, monolithic and powerful, will soon begin its campaign against the initiative, says MGM-Mirage Vice President of Public Affairs Alan Feldman. They, long confederated as the Nevada Resort Association, have already filed a lawsuit in district court challenging the constitutionality of the petition.
Both sides say that the people of the state need to have a candid, open discussion about the issues at stake, and we agree.
Here’s what the argument looks like, as represented by Warne and Feldman, respectively. If the petition survives the courtroom battles, and then gains the requisite 58,628 citizen signatures of support to make its way to the 2008 and 2010 ballots, you will serve as its ultimate arbiter.
Nevada State Education Association: A 3-percent increase on the largest casinos is certainly fair, says Warne.
Nevada Resort Association: What happens in 20 years, when Nevada has grown even more and 3 percent is no longer enough? We’ll be back in the same situation, Feldman says.
NSEA: “It’s hard to see in the future; we have needs that must be addressed now,” says Warne.
NRA: This initiative just perpetuates the state’s flawed and perilous dependency on a single source, the gaming industry, the state’s largest employer, Feldman says.
NRA: “If they were being honest about wanting to broaden the tax base,” says Feldman, “they’d scrap their petition and file one to broaden the tax base instead.”
NSEA: “We would certainly welcome, as a companion piece to our initiative, an initiative to broaden the tax base,” says Warne.
NSEA: Gaming taxes in Nevada are the lowest in the world.
NRA: For that exact reason, gaming has thrived in Nevada like nowhere else in the world, has pumped historical amounts of capital straight into the state, and has spurred the growth from which small and big businesses alike have prospered.
NSEA: “A world-class community needs support for its infrastructure, and it’s time for gaming to step to the plate,” Warne says.
NRA: Gaming already pays more than $1.3 billion in taxes a year, which comprise half the state’s tax revenue. As it stands, gaming funds 33 percent of the state education budget. “For the past 75 years, we’ve done out part,” says Feldman.
NSEA: Nevada ranks 49th in the nation in per-pupil spending. “We’re dangerously under-funded,” says Warne.
NRA: “The initiative will do nothing to increase funding to education,” says Feldman. “It will simply ensure that the union delivers pay increases to its members. Right now, teacher salaries rank 25th in the nation.”
NSEA: No less than 40 percent of the money would go toward more instructional days, the alleviation of overcrowding, teacher training, and student tutoring; no less than 40 percent would go toward increases in teacher pay and benefits; the rest would go toward incentive pay for educators.
NRA: “If they were honest they’d tell you this petition is not for education,” says Feldman. “It’s to put money in teachers’ pockets.”
NSEA: “We’re not endangering the casinos’ growth or prosperity,” says Warne.
NRA: Depending on one source is inherently dangerous, not just for both education and gaming, but for the state’s entire economy and its quality of life, as well. The state’s current budget crisis is proof.
NSEA: “The negotiation table is always open,” says Warne. “They turned their backs to the table and stopped talking to us.”
NRA: “There’s nothing to negotiate with the union,” says Feldman. “They’ve already filed their initiative.”