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Room tax for education removed after Sisolak threatened presser, caucuses collapsed

Posted at 3:31 PM, Oct 06, 2016

Clark County Commissioner Steve Sisolak threatened to call a news conference to protest state lawmakers trying to balance the budget on the backs of Southern Nevada taxpayers, and support for an additional room tax increase at next week’s special session collapsed late Wednesday evening in partisan caucuses, KTNV has learned.

That forced Gov. Brian Sandoval, who on Wednesday had declared he had to have the additional room taxes “to ensure education funding is stable for the upcoming biennium,” to abruptly remove it from the agenda less than 24 hours later.

“I voiced concerns to the governor and the (gaming) industry about Clark County subsidizing the entire state,” Sisolak confirmed, saying he was furious when he learned about the proposed .12 percent room tax increase to help bridge an estimated $400 million budget deficit.

Sisolak said he “appreciated” Sandoval and his economic development boss, Steve Hill, listening to his concerns and withdrawing the proposal, which Democratic leaders had taken credit for including with the planned room tax increases for the stadium ($750 million) and convention center expansion ($400 million).

Conversations between Sisolak and the governor’s men, including Chief of Staff Mike Willden, went on into the late evening, and caucuses had conversations until the early morning hours, sources said.

Sisolak told the administration folks he would call a news conference Thursday, use a payday loan analogy and declare Clark County would not be put at risk to subsidize education for the entire state and risk having to make bond payments on the room tax plan for 30 years.

The plan also wasn’t met with universal approval among lawmakers, and one leader told me, “My caucus doesn’t want to raise taxes in a special just to fill a hole for the 2018-2019 biennium.” (Yes, that major tax increase can wait until 2017!)

Another key legislative insider told me by adding the education money, “This starts to look like a Christmas tree,” the term used for end-of-session pet project ornaments. “If we put that in, why not ESAs? Why not raise the room tax 2 points for education?”

So in this case, less is better. But it still seems likely that fires will have to be put out; how large they are will determine how long the session lasts and whether this is really a done deal. I understand at least a few legislators, especially northerners and some Democrats, are concerned about giving $750 million in public money for Sheldon Adelson’s dream, especially considering he just invested at least $45 million nationally to defeat Democrats.

I’ve also learned that major Strip players were not thrilled with the additional increase over the .88 for the stadium and .5 for the convention center expansion, although some were willing to bite the bullet.

This all comes as the administration is trying to line up the choreography for next week, including getting major gaming players such as Steve Wynn and Jim Murren to testify for the package. (We are all stadium/convention center-lovers now.) And with six unions supporting the project — the only major labor player not yet on board is the Culinary — Democrats will be hard-pressed not to vote for the measure. Or so the theory goes.

The official session proclamation, which will not be out until Sunday so incumbents can grab as much donor money as they can before a fundraising blackout begins, also is expected to include funding for more Strip police officers. That is expected in a different bill from the two major tourism projects.

The total tax increase will be more than $1 billion.