County Looks At Car Tax For Arts
By Frank Geary
February 15, 2005
The Las Vegas Review-Journal
In 2003, the state Legislature authorized Clark County to raise taxes on rental cars to pay for a
$125 million performing arts center.
Two weeks ago, the Las Vegas City Council preliminarily agreed to help fund the arts center
using that tax.
But it was unclear Monday if the Clark County Commission, which is scheduled to decide today
whether or not to implement the tax, will sing from the same page of music.
The 2003 Legislature authorized the commission to raise a tax on rental cars by 2 percentage
points and use the money to build a performing arts center and a training facility for culinary
workers.
But some commissioners said Monday that it's unfair to target one industry with a tax hike. Newly
elected Commissioner Tom Collins and Commissioner Myrna Williams both said they want to see
a performing arts center built, but suggested it might be better to spread around the tax burden.
"I'm not sure it's fair for one industry to pay for something that is going to benefit everyone,"
Williams said. "I really want a performing arts center. I just wish there was a better way to fund it."
Collins said the proposal might need to go back to the Legislature. The former assemblyman
suggested it might be prudent for lawmakers to increase slightly the hotel-room tax, and redirect
some tax money from the Las Vegas-Clark County Library District to the performing arts center.
"If this needs to go to the Legislature for cleanup, we should investigate spreading this out so it's
not all on the rental car industry," Collins said.
Commissioner Chip Maxfield, who opposed the tax proposal in 2003, did an about-face Monday.
His understanding two years ago was that local residents and tourists would both pay the higher
tax. But after learning it won't affect Clark County residents, Maxfield now supports the hike, he
said. The proposal exempts local motorists from the tax.
Commissioner Bruce Woodbury, who supports building a performing arts center, said he wasn't
sure he will vote on the proposal. Since his law firm represents car rental companies, he might
have to abstain because of a conflict of interest, he said.
Commission Chairman Rory Reid and Commissioners Yvonne Atkinson Gates and Lynette
Boggs McDonald couldn't be reached for comment Monday.
Myron Martin, executive director of the Las Vegas Performing Arts Center Foundation, the
organization pushing for the cultural center, said public financing from the tax isn't enough to build
the center.
However, the new tax would be a launching pad for raising nearly $100 million more through
private donations and corporate sponsorships.
The foundation has commitments from individuals and corporations, Martin said. The potential
contributors have said they will donate if the commission enacts the new tax, he said.
"The performing arts center is so important to the fabric of the community," Martin said. "It really
does bring people out of the woodwork who want to contribute."
Martin refused to disclose the names of the potential contributors or discuss fund-raising plans
before the commission vote scheduled for today.
County Finance Director George Stevens two years ago estimated that the tax hike would raise
enough money annually to make debt payments on bonds worth $50 million to $60 million. As a
result, the tax would raise only half the money needed to finance a $125 million performing arts
center.
Stevens couldn't be reached for comment Monday.
Martin, however, said the city of Las Vegas' bond counsel indicated more recently that the tax is
sufficient to generate annual debt service on an $85 million construction bond.
In addition, city officials have set aside five acres on Las Vegas' 61-acre Union Park land near the
Spaghetti Bowl for the performing arts center.
Martin said private fund raising is expected to cover the remaining costs of construction and
provide millions of additional dollars that will be placed in an endowment. The endowment will
then cover the cost of some performances for school children and community members.
The cost of operating and maintaining the facility would come from ticket sales and other revenue
generated at the center, Martin said.
Bernie Kaufman, acting president of the Nevada Car Rental Association, said if the tax is
approved government-imposed fees and taxes will account for 40 percent of the cost of a rental
car in Las Vegas.
Richard Broome, executive vice president of Hertz Corp., said it's inappropriate to charge tourists
for a performing arts center that they are not likely to ever use. It would be more appropriate to
pay for construction of the facility through a tax or fee on services provided by the performing arts
center, he said.
"It's easier than enacting a broad tax that local people would notice and get upset about," Broome
said "We still fail to see the connection between a culinary center and a performing arts center
and rental cars. What do either of them have to do with rental cars?"
Bill Bible, president of the Nevada Resort Association, declined to comment on Collins'
suggestion that hotel-room tax, among other sources, could be used to pay for the center. The
association would have to study Collins' idea before commenting on it, he said.
Dan Walters, executive director of the Las Vegas-Clark County Library District, said any cut to the
district's existing revenue, which Collins' suggested could also be tapped to help fund the center,
would hurt its ability to provide library services at current levels.
"We need every penny we have to keep up with the growth we're experiencing," Walters said.