Board blasts Gibbons proposal

The resort executives and local government representatives who make up the panel blasted the governor for not consulting them before making his proposal, which is expected to be introduced by Assembly Minority Leader Garn Mabey, R-Las Vegas.

“We are the captains of industry here assembled, the leaders of local government, all saying the same thing: We recognize the problem, and we want to be part of the solution, but there needs to be dialogue,” board member and Clark County Commission Chairman Rory Reid said at the meeting, which he attended by phone.

No one defended Gibbons at the one-sided meeting. Gibbons’ chief of staff, Mike Dayton, was in attendance but did not speak up during the meeting to rebut the vociferous criticisms of his boss.

The board’s lawyer said the authority could sue if the plan goes forward, based on the potential damage to its bond rating.

“We would seek an injunction and possibly damages,” legal counsel Luke Pusching said.

Gibbons proposes redirecting $424 million in revenue from the tax on hotel rooms from the authority to highway construction over the next eight years, an amount that would be combined with diversions of live entertainment tax and vehicle sales tax to secure $2.5 billion in bonds and get started on the state’s most urgent road construction needs, which have an estimated cost of $5 billion.

Gibbons’ is not the only transportation-funding proposal. Democrats in the Assembly outlined a plan that includes a tax on trucks, while a bill in the Senate would combine an array of taxes and fees. But Gibbons has vowed to veto anything he considers a tax increase.

A poll conducted May 1 and 2 for the Review-Journal found 72 percent of registered voters in Nevada favor dedicating at least some of the current hotel room tax for highway construction. No other tax proposal to fund roads received as much support in the poll.

Mabey said legislative lawyers have prepared Gibbons’ road-funding proposal in bill form. Mabey wants the governor to review the proposal and then will likely introduce it today as Assembly Bill 625.

The authority has balked at the room-tax plan, saying its ability to promote Las Vegas tourism and run the Las Vegas Convention Center would be hampered and the convention center’s planned $890 million renovation would have to be canceled.

Because bonds have already been sold to pay for the renovation, secured by projected future revenue, the authority’s lawyers say Gibbons’ proposal violates contract provisions in the U.S. and state constitutions.

“The U.S. and Nevada constitution both have clauses that prevent the government or the state Legislature from changing the deal on bondholders,” attorney John Swendseid told the board.

The board had been expected to offer Gibbons, as a gesture of compromise, perhaps $20 million per year. But instead, board members merely voiced a vague willingness to contribute.

“We want to be part of the solution,” authority president Rossi Ralenkotter said. “We’ve never said we didn’t want to be part of the solution. But it needs to be done in a way that does not impact our ability to carry out our mission.”

Board member and MGM Grand Resorts executive Chuck Bowling said the lack of consideration given to the recommendations of a state task force on transportation was “irresponsible, quite frankly, to every resident of the state of Nevada.”

Glenn Christenson of Station Casinos said proposals like Gibbons’ were “one-off, ill-conceived, Band-Aid approaches to solving these problems.”

Las Vegas City Councilman Larry Brown said the governor and his staff were sending a message that “they want Southern Nevada to solve all the state’s problems,” which he said was “very disingenuous” because Clark County has already passed two ballot initiatives raising taxes to build roads.

“This message from the governor’s office is that we need to do more locally to solve our own problems — it’s a blatant lie,” Brown said.

The main complaint of the board members, however, was that Gibbons had blindsided them, presenting a plan to siphon revenue from the authority without consulting those who would be affected.

“The thing that really ticks me off is I don’t know if the governor ever asked anyone associated with our authority what the impact would be on our community,” Las Vegas Mayor Oscar Goodman, the board’s chairman, said. “It’s rude. What do we have here? We have the captains of the ship sitting here, and he didn’t even pick up the phone.”

Dayton said in an interview that resort companies and the authority had been consulted about the governor’s plan.

In addition to executives at Las Vegas Sands Corp., which supports the room tax proposal, Gibbons met personally with MGM Mirage Chairman Terry Lanni and talked on the phone to Harrah’s executives, while Dayton met twice with Ralenkotter, he said.

“This has been going on for months, these discussions,” he said. “They knew the governor was interested in a room tax (diversion) proposal. … To say the governor never reached out to anybody is just not true.”

Ralenkotter said he initiated the meetings with Dayton when he heard room tax alternatives were being discussed, not vice versa, and said the discussions were about the room tax generally, not the road plan specifically, which took even Republican legislators by surprise when it was unveiled at a Carson City news conference earlier this month.

Dayton said the authority’s board members had said they wanted to participate in a solution but hadn’t offered anything specific. “I didn’t hear them offer anything substantial,” he said.

As for the authority’s complaint that the proposal would limit its budget to increases of less than 1 percent per year, Dayton said, “They need to look at revenues and expenses, just like every other government entity needs to look at living within its means.”

Review-Journal Capital Bureau chief Ed Vogel contributed to this report.