As appealing as it may sound for Majestic Realty and the state to build an off-campus football stadium using money generated from new taxes on taxi customers or rental cars, it’s a horrible idea.
A stadium near UNLV for Rebel games and special events with more than 60,000 attendees – like the UNLV Now proposal that was rolled out two years ago – is still a relevant community need. But Majestic’s plan for the state to generate $385 million through a $1.50 surcharge on every taxi ride or a tax assessed on rental cars could damage Southern Nevada’s tourism industry in the long run.
Taxi customers who are picked up at McCarran International Airport already pay a $1.80 fee.
In 2012, Las Vegas taxis made 27 million trips. At $1.50 a ride, the proposed surcharge would raise $40.5 million in a year.
Rental car taxes have been a go-to source of revenue on dozens of massive public projects, including Aces Ballpark, the downtown Reno baseball stadium that opened in 2009. The Global Business Travel Alliance has worked to prohibit governments from taxing car rentals to pay for projects unrelated to the rental car industry.
Is it fair to place a large portion of the burden of building a stadium on the backs of guests to the community?
And don’t forget, many taxi and rental car customers are local residents. They take taxis to the doctor and grocery store and rent cars when their vehicles are in the shop.
Some may say turnabout is fair play, and Las Vegas should embrace surcharges and taxes because other municipalities do it.
But tourism is our prime industry. Visitors already pay high taxes when they spend a night at a hotel. Room taxes pay for advertising by the Las Vegas Convention and Visitors Authority to try to bring more tourists to town.
In recent years, state lawmakers have chipped away at the percentage of revenue that goes to market Las Vegas. Some money goes to schools and highway construction projects, as well.
So tourists already contribute to bettering our quality of life.
But how long would it take for taxes and surcharges to become steep enough that tourists would seek out other destinations?
Think also about the things tourists might not buy if they have to pay more for transportation.
Travel booking company Expedia recently released a study that found that tourists spend an average of $1,663 on gambling, dining, shopping and entertainment during a three-day trip.
During the Great Recession, we saw how tourists cut spending — taking one fewer trip here a year, gambling less in the casino, passing on a show or buying fast food instead of a fancy meal.
At what level does increasing the cost of coming here become a tipping point? Should taxi or rental car companies become our tax collectors?
There must be another way to raise the revenue needed to build a stadium.