Should taxes here stay here?

Portion of revenue from rooms rented here goes toward marketing the entire state

Richard N. Velotta

Richard N. Velotta

Some members of the Las Vegas Convention and Visitors Authority board of directors have quietly begun asking questions about whether it’s appropriate for room tax revenue generated in Clark County to be used to market tourism attractions statewide.

As a result of legislation approved in 1983, the Nevada Tourism Commission gets a fraction of the revenue generated by local room taxes — three-eighths of 1 percent, which amounts to about $18 million per year.

The local room tax ranges from 10 to 13 percent. The LVCVAgets less than half of the revenue generated.

The good news for the LVCVA is that room tax revenue is gradually increasing thanks to higher visitation numbers and increasing average daily room rates. Room tax and gaming fee revenue is forecast to be about 2 percent higher than the previous fiscal year.

Policymakers statewide have locked horns over how much Southern Nevada’s economic engine should be used to sustain the rest of the state.

Technically, tax revenue generated by rooms doesn’t come out of the pockets of local residents. Still, there’s growing resentment about Northern Nevada interests funneling money generated in Southern Nevada to themselves and rural parts of the state.

The issue is being raised now because the LVCVA is embarking on a plan to develop the Las Vegas Global Business District, a $2.5 billion revamping of the Las Vegas Convention Center campus. It will include a World Trade Center, expanded exhibit space, meeting rooms and session space, upgraded technology and a transportation center to help move visitors around the resort corridor.

With the cost of doing business rising and some LVCVA board members concerned that money generated here should be invested here, questions arose during a discussion about the LVCVA’s most recent audit.

The Tourism Commission’s cut of room tax raised eyebrows because some new board members weren’t aware that local funds were used by the state agency.

Among the questions that will be raised in the months ahead: Is the state’s marketing of Nevada attractions beneficial to Las Vegas? Is Southern Nevada getting the most bang for its tourism buck by funding the state? And should lawmakers be lobbied to change the funding formula for the Tourism Commission?

Tags: Opinion, Business