I keep hearing over and over again how gaming executives (other than the Venetian’s Sheldon Adelson) are opposed to the governor’s proposal to use some of the Las Vegas Convention and Visitors Authority (LVCVA) room tax subsidy for much-needed highway construction. Well, of COURSE they are.
Tourists pay the room tax, which is then diverted to LVCVA to advertise Las Vegas, money the gaming companies don’t have to take out of their own pockets. So any money you reallocate from LVCVA means gaming executives will have to do their own advertising to make up the difference…IF it turns out such advertising by LVCVA really is necessary.
So of COURSE, gaming is opposed to any proposal which would require them to do their own jobs on their own dime. Why is this surprising to anyone?
And as I noted the other day, the major gaming entities in Las Vegas have representatives ON the LVCVA board. So of COURSE these gaming executives are going to be opposed to this proposal. Why is this surprising to anyone?
Nevertheless, let’s take a little look at the money we’re talking about here. I realize that any discussion of numbers in a public policy debate makes a lot of eyes glaze over pretty fast, but try to stick with me on this one.
According to an analysis of the room tax which subsidizes the LVCVA (see above), the amount of revenue generated in 2004 was $152 million. That was an increase of more than 17 percent over the year before. The following year’s revenue increase was over 15 percent. And last year’s increase was just under 14 percent…which meant just over $200 million came in.
I bring these numbers up only to point out that anticipating a 5 percent annual increase in room tax revenue is VERY conservative, considering recent history.
Now, if you figure an annual 5 percent increase in room tax revenue…which doesn’t even include the fact that some 40,000 additional rooms will be added to the inventory over the next few years…then the amount of room tax revenue that will come in 20 years from now will be $557 million. That’s a lot of dough.
That also means the CUMULATIVE amount of revenue which will come in between 2007 and 2027 will be over $7.5 BILLION dollars. That’s BILLION with a capital “B.”
Now let’s suppose the rate of growth is 9 percent…certainly a reasonable possibility considering past performance. If so, the amount of cumulative room tax revenue which will come in over the next 20 years would be over $12 BILLION dollars…including over $1.2 billion that final year alone.
The Gibbons reallocation plan calls for just $424 million of that money over just the next seven years.
And the convention authority is crying poor mouth?
Puh-lease.
Posted on May 26th, 2007 by Chuck Muth
Filed under: Nevada
COOL !!!