Room tax petition takes effect

CARSON CITY AP) " As promised, Gov. Jim Gibbons on Wednesday let a petition to increase hotel room tax rates in the Reno and Las Vegas areas by up to 3 percentage points go into Nevada lawbooks without his signature.

Under the plan, room tax rates will increase to a maximum of 13 percent starting July 1. Nearly all of the new revenue will be generated in the Las Vegas area since most hotels and motels in Reno already have room tax rates of 13 percent or higher.

The tax increase is expected to produce $233 million over the first two years, far less than the $292 million that Gibbons initially estimated.

Gibbons angered Senate Majority Leader Steven Horsford, D-Las Vegas, and Senate Minority Leader Bill Raggio, R-Reno, when he announced last week that he wouldn't sign or veto the tax increase, and would simply let it go into law without his signature.

They noted he already had included revenue from the plan in his proposed state budget, and that voters in the Reno and Las Vegas areas had endorsed the increase.

Under state law, a measure approved during a legislative session takes effect five days after it reaches the governor if the governor chooses not to sign or veto it.

Money raised from the tax during the first two years can be used for any purpose, including covering perceived holes in the state budget. Starting in mid-2011, the money must be used to increase teacher salaries or on programs to improve student achievement.