State hotel room tax plan is a big hoax

Perhaps the biggest hoax to be played on Nevada's citizens by its elected officials during the 2009 legislative session is already being played on them before the session even starts.

Elected officials from Gov. Jim Gibbons on down are claiming a proposed 3 percent increase in the hotel room tax was voted on by the people of Nevada last November and, therefore, it's OK for them to approve it. What pure, unadulterated, USDA cow manure. And a steamy fresh pile at that, not a dried up old pie.

To start with, the 3 percent tax hike was on the ballot in only two of Nevada's 17 counties and was "advisory only." It was not a true referendum on the tax hike itself. In other words, as opponents put it at the time, this was "nothing more than a government-paid opinion poll."

In addition, the tax hike advisory questions were placed on the ballot last November by Clark and Washoe county commissioners, not the people themselves " and the commissioners did it under pressure from the teachers union and a troika of Las Vegas gaming companies which hoped to make a deal with the devil in order to avoid an even worse threatened tax penalty they themselves would have to pay.

In other words, the teachers union extorted three gaming companies into supporting higher taxes on a group of people who had no political power to fight back: out-of-state tourists. So everything about this proposed tax hike has been dishonest from Jump Street.

Worse, the tax is just a bad public policy idea ... period. But don't take my word for it; here's what opponents of the tax grab had to say about it last fall ...

"Clark County's largest economic engine is tourism. Adding additional taxes to a hotel bill at a time when tourism is down and hotels have reduced room rates to attract business is a terribly misguided approach.

"...This question is appearing only on the Clark County and Washoe County ballots. The room tax rate in downtown Reno and Sparks is already over the 13 percent cap, so there will be no revenue received from these areas. The majority of the revenue will come from Clark County, but will be spent statewide.

"According to this question, after the first two years the revenue is to be used to 'increase the funding of K-12 Education.' Provisions like this " or any other directing where revenue is to be spent " can be extremely difficult to track and enforce. Any future Legislature is free to spend the revenue any way it sees fit, without regard to what is promised by this question.

"This revenue is supposed to be used to improve student achievement and increase teacher salaries but nowhere in the question or explanation are there accountability provisions or definitions of 'improvement in student achievement.'"

As I write this column, I'm checking hotel rates in Las Vegas. Rooms at the Wild Wild West Gambling Hall and Casino are going for just $13.33 per night on Hotels.com, and you can get a room at the luxurious Palms Casino Resort for just $41.40 a night. Why?

Because Las Vegas is a veritable ghost town these days. The parking lots are practically empty. People are hurting not just in this country, but all over the world. Tourists aren't coming here because a lot of people can no longer afford to go anywhere other than their neighborhood park.

So what do the geniuses who run our state government propose to do? Penalize the very people we need to pull ourselves out of this recession. Brilliant! Talk about killing the goose that lays the golden eggs.

If Gov. Gibbons and state legislators implement this foolish bite-the-hand-that-feeds-you tax hike, they ought to have their heads examined. Better yet, they ought to have their butts kicked to the curb on Election Day 2010. So let it be written; so let it be done.

-Chuck Muth is president of Citizen Outreach, a non-profit public policy grassroots advocacy organization. He may be reached at chuck@citizenoutreach.com.