A proposal from the Clark County teachers union to increase Nevada’s gaming tax rate by about 43 percent is projected to bring in about $650 million in new revenue in each two-year budget cycle.

The Legislative Counsel Bureau’s Fiscal Analysis Division provided a formal estimate Wednesday of the projected effect of the proposed ballot measure, which is backed by the Clark County Education Association. The gaming tax hike is one of two proposals to raise more money for education — the other is a sales tax increase.

The proposed initiative scored by the fiscal division would create a new category of the state’s gaming tax assessing a 9.75 percent levy on all gross revenue over $250,000 for every calendar month. The current tax rate is 6.75 percent.

Fiscal analysts estimated that had the proposed higher tax rate been in effect for the 2019 fiscal year, it would have generated approximately $317.6 million in revenue in additional revenue (atop the $752 million actually collected). For the current fiscal year, such a tax would bring about $334 million in new funds. In total, the two-year revenue projection is $651.9 million

Those estimates are slightly lower than the $340 million annual new revenue that Clark County Education Association director John Vellardita previously told The Nevada Independent he expected. 

The total state general fund — which is a source for much but not all of Nevada public education funding — is about $9 billion every two years.

Vellardita has called the tax package a “final fix” for Nevada’s cash-strapped schools, but business groups have sharply criticized the idea.The Nevada Resort Association, a casino trade association, called it “very damaging to the state’s economy” and characterized it as pitting some of the state’s workers against others.

Under Nevada law, qualifying a statutory initiative requires backers to gather signatures from at least 10 percent of registered voters who cast a ballot in the previous election. For the 2020 election cycle, that means a minimum of 97,598 valid signatures and at least 24,400 in each of the state’s four congressional districts submitted by Nov. 18, 2020.

If enough signatures are found valid, the initiative petition moves to the 2021 state Legislature, where lawmakers have 40 days to approve the petition it. If lawmakers reject the petition or take no action, it would move to the 2022 ballot. 

State law requires the fiscal division to consult with the Nevada Secretary of State’s office on any filed initiative petition, and to prepare a fiscal note within ten business days of the petition being filed. The division has not yet released an analysis of the union’s proposed sales tax increase.

Gaming Tax Initiative Fiscal Note 1-29-2020 by Michelle Rindels on Scribd