Room taxes pass Senate for Washoe, Clark counties
March 10, 2009
CARSON CITY ” The initiative petition raising room taxes in Clark and Washoe County cleared the Legislature Tuesday after a lengthy debate in the Senate.
The vote was 16-5 with the opposition coming from Republican members who said they objected o being boxed in by the constitutional requirements that don’t allow any amendments to the plan authored by teachers’ union and three casino corporations. Senators Mark Amodei of Carson City, Barbara Cegavske and Warren Hardy of Las Vegas, Mike McGinness of Fallon and Maurice Washington of Sparks opposed passage.
“This has hijacked the process, walled it off so we couldn’t change, amend or do anything to this petition and I think that’s wrong,” said Washington.
He objected especially to the language dedicating the money raised first to teacher salaries: “There’s nothing about books, nothing about bricks and mortar, nothing about equipment.”
Amodei protested the fact the plan would create a new state tax which only the teachers could benefit from, adding that earmarking “is not responsible policy.”
Washington said lawmakers should reject the petition and allow it to go on the ballot in November 2010. He said explain what the teachers did and they would agree it’s not fair.
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He and the others argued any revenue raising plan should be heard, debated and reviewed by the entire legislature, not rammed through using a tactic that prevents proper deliberation.
According to latest estimates, the 3 percent increase in the room tax will generate about $233 million over the biennium, all but about $3 million from Clark County. It doesn’t apply to the other 15 counties in Nevada.
For the coming two years, that money will go to the General Fund. After that, the money will go to K-12 education.
Sen. Maggie Carlton, D-Las Vegas, said she doesn’t think the tax will generate anywhere near that much because resort operators control what they charge for rooms and can lower them, reducing the taxes collected.
“They could give them away,” she said.
Majority Leader Steven Horsford, D-Las Vegas, agreed the petition process “puts us in a box.” He said he too objects to how the issue was handled and the fact that it makes teacher pay raises a priority.
But he said not passing the petition would be worse because it would go to the voters who would likely approve it as is, which would bar lawmakers from changing anything in the petition for at least three years. If lawmakers pass the petition, he said they can return next session and modify it because it was legislatively approved, not by voters.
Hardy agreed with Horsford but said the Legislature needs to “get the policy right,” not put a flawed petition into law.
Senate Minority Leader Bill Raggio, R-Reno, also objected to the petition process and agreed there are flaws in the petition. But he pointed out if the petition didn’t pass, it would create another $232 million shortfall in the budget, forcing lawmakers to either cut that much more or raise revenue from another source.
“I’m very reluctant to do this but I guess it’s pay now or pay later,” he said
He, Randolph Townsend of Reno, Dean Rhoads of Elko and Dennis Nolan of Las Vegas joined the 12 Democrats in approving the petition 16-5 ” two votes more than the two-thirds majority required to raise taxes or fees.
Horsford said after the vote said he was disappointed the teachers’ union didn’t give Democrats, who took over the Senate this session for the first time since 1991, a chance to fix education funding before pushing through their petition.
Gov. Jim Gibbons included the money raised by the tax increase in his proposed budget. But a spokesman said after the vote the governor will allow the petition to become law without his signature.
“He won’t sign it based on principal,” said Dan Burns. “He didn’t support the tax hike and he doesn’t support tax increases. He will not veto it because he will not stand in front of the will of the people.”
Under the Nevada Constitution, the petition will become law after five days.