Taxes will be higher for casinos, too

December 28, 2004 - In a major reversal of fortune, the current taxable value of Las Vegas-based casino companies jumped more than 6 percent from the two preceding years, an annual list released by the Clark County tax assessor's office shows.

Appreciation in the taxable value of casino companies remained stable for more than two years following the economic downturn related to the Sept. 11, 2001, terrorist attacks.

Among the top 15 taxpayers in Clark County, the increase in gaming companies' assessments still lagged the 22 percent jump in nongaming companies' assessments by more than 3-to-1.

And assessment increases for the top 15 taxpayers in the 2004-05 tax year still came in below the 13.2 percent increase in total county assessments, Clark County Tax Assessor Mark Schofield said.

Next year, however, major taxpayers will face increases of historic proportions, with casino operators getting hit hardest.

County officials and local tax experts say the projected increases beat anything ever before seen in Nevada or any other state since records have been kept.

Schofield said those increases, though hitting gaming companies hardest, will slam all segments of the local economy, with some parcels increasing as much as 300 percent.

Schofield, gaming executives and local experts agree the overwhelming tide of taxable property values makes state and local reform urgent and probably inevitable.

University of Nevada, Las Vegas history department Chairman Hal Rothman said Nevada's tax structure is like a two-legged stool and has to be re-examined quickly.

"The systems makes the tax revenue flows unstable and leave us addicted to growth," he said, as government enjoys revenue increases in good years and increases tax rates during slowdowns.

Jeremy Aguero, a partner in Las Vegas financial consulting company Applied Analysis, said there is a consensus that the tax system needs overhaul, but added that "there are a lot of ways to skin the cat."

"We have to be careful about creating a long-term problem that was supposed to be a solution to a short-term crisis," he said.

Schofield said the shifting sands and tremendous increases projected for next year combine to make this the hottest issue facing the state Legislature when it reconvenes.

Overall, Schofield said the assessed value of land on the Strip is projected to increase 76 percent for 2005-06, a jump Aguero said was unprecedented both locally and nationally.

Schofield said the largest increase will come in the area from Sands Avenue to Flamingo Road, up 107 percent, trailed by the areas from Flamingo Avenue to Russell Road.

That means MGM Mirage, already the state's largest real estate taxpayer, also faces the biggest leaps in assessed values.

MGM Mirage spokesman Alan Feldman said these increases will make real estate taxes not just the top issue for the Legislature, but also for his company and its employees.

"We are all very much in this together. As property values increase, it affects all of us directly," he said.

However, while his company and its competitors monitor the legislative situation carefully and say they are looking for "balance," Feldman said it is too early to predict what solutions may finally emerge.

Executives at other gaming companies declined to discuss on the record what solutions they ultimately may support.