Posts Tagged ‘gaming’

Jeff Mohlenkamp Already Tackling Challenges As Nevada’s New Budget Director

By Sean Whaley | 9:21 am August 19th, 2011

CARSON CITY – When Jeff Mohlenkamp decided to accept the job as Nevada’s newest budget director, he knew going in it was going to be a challenge.

The state’s economic slump continues to be a drag on funding government services, although gaming and sales tax revenues have shown some improvement in recent months.

The Department of Administration, which Mohlenkamp oversees as a significant part of his duties, is in the midst of a major merger, with the former Departments of Personnel and Information Technology coming under the agency’s umbrella.

And Mohlenkamp, who has the job of preparing the governor’s budget every two years for submission to the Nevada Legislature, will now be required to use a radically different process, called performance-based budgeting, to prepare the governor’s spending plan.

But after five weeks on the job, Mohlenkamp, 48, who has a varied background in state service dating back to 1986, is enjoying the challenge offered to him by Gov. Brian Sandoval, who named him to the position in June. Former budget director Andrew Clinger left following the end of the 2011 legislative session to become Reno city manager.

Mohlenkamp said his background and experience appeared to fit the bill for Sandoval.

“It’s a daunting task in some regards but I find it to be very exciting,” he said. “The challenges are many. It’s working right with the governor and his staff to achieve some of the over-arching goals of the state.”

Jeff Mohlenkamp, Nevada's new budget director. / Photo: Sean Whaley, Nevada News Bureau.

While times are tough, it is those very challenges that can push those in charge to step up and think critically about delivering state services in the most effective way, he said. But that process should be happening in good times as well.

“Sometimes tough times force us to modify the way we do business and look carefully at the way we do business, but it really is something we should be doing not only in difficult times but all the time,” Mohlenkamp said.

The state should be well served by the Legislature’s approval of a measure requiring performance-based budgeting, he said. The new process, also called priorities-based or activities-based budgeting, was partially implemented in the 2011 session by Clinger at the request of former Gov. Jim Gibbons.

Historically state agencies have just “rolled up” their program costs, based on increased caseloads and inflation, in preparing new budgets every two years. Programs were not regularly analyzed to determine if they were still needed.

“I think the ultimate goal, whatever terminology is used, is to move towards a different way of looking at state government and the functions it performs,” Mohlenkamp said. “And trying to evaluate what functions or activities government needs to be engaged in, and the relative value of those activities and those functions. It means looking at budgets through a different lens.”

The merger of the various former departments and agencies into the Department of Administration is a major challenge, but much of the work was already under way when he arrived on the job July 11, he said.

Bringing all the services the state provides to other agencies – from personnel needs to information technology – into one central agency, will provide the opportunity to improve services to the many different departments and divisions statewide, Mohlenkamp said.

“Looking at how we can better serve our customers is going to be one of my primary focuses,” he said.

Mohlenkamp’s career in state service began shortly after graduating from the University of Nevada, Reno, in 1986, with a degree in accounting and business management. He went to work for the Gaming Control Board, serving in different positions, including several years as a supervising investigator for the Corporate Securities Division. In this position he reviewed such major publicly held companies as Bally’s and IGT.

After 17 years with gaming, he went to work for the state Division of Internal Audits in 2003, doing performance based reviews of a variety of agencies, including many in the Department of Health and Human Services. From there he worked as the administrative services officer for the Division of Mental Health and Developmental Services, first working under former administrator Carlos Brandenburg, who Mohlenkamp cited as a mentor.

Brandenburg said he was fortunate to have Mohlenkamp as his ASO.

“What separated him from the previous ASOs that worked for me is that a lot of the ASOs strictly crunched the numbers,” he said. “Jeff separated himself because he not only crunched the numbers, and he was very, very good at that, but he also wanted to understand services.

“I knew for a fact that the governor was going to get himself a great, hardworking person,” Brandenburg said. “A person that looks at the numbers, and crunches the numbers, but he also tries to understand the service part of the system.

“What he tells you you can take to the bank,” he said.

Mohlenkamp then moved to the Department of Corrections, where he served as a deputy director of support services, overseeing inmate services, and legislative and financial matters.

Both with mental health and corrections, Mohlenkamp spent a lot of time at the Legislature testifying on budgets, experience that will no doubt serve him well when he has to present Sandoval’s next budget in 2013.

Mohlenkamp said he considers himself a straight shooter, giving lawmakers the information they need to make decisions.

“My goal is to answer straight questions with straight answers,” he said. “The legislative process isn’t always fun, but it’s always interesting.”

Sandoval said Mohlenkamp had the qualities he was looking for in a budget director.

“Jeff is somebody that I’ve known who has served the state with distinction for many, many years,” Sandoval said. “I first met him when he was at gaming when I was on the Gaming Commission. He has also worked at Health and Human Services, he’s worked at prisons, he has testified in front of the Legislature, he has a tremendous amount of experience with budgets, he is very proud of his state and very committed. And so all those attributes were what I was looking for in terms of a budget director.”

“Obviously Andrew Clinger is going to be somebody who is difficult to replace, but Jeff has already dived straight into the job and is doing a great, great service for the people of Nevada,” he said.

When he isn’t putting in long hours in his new job, Mohlenkamp said he likes to sail, scuba dive and spend time with his two children.

Audio clips:

New state Budget Director Jeff Mohlenkamp says performance-based budgeting will require a new type of analysis:

081811Mohlenkamp1 :26 and those functions.”

Mohlenkamp says state agencies should be evaluating their programs in good times as well as bad:

081911Mohlenkamp2 :13 all the time.”

Mohlenkamp says his new job is daunting but exciting:

081911Mohlenkamp3 :23 of their careers.”

Former MHDS Administrator Carlos Brandenburg says Mohlenkamp did not just crunch the numbers:

081911Brandenburg1 :20 to understand services.”

Brandenburg says Sandoval recruited a great budget director:

081911Brandenburg2 :15 of the system.”

Gov. Brian Sandoval says Mohlenkamp has served the state with distinction for many years:

081911Sandoval1 :26 a budget director.”

Sandoval says Mohlenkamp has dived right into the job:

081911Sandoval2 :11 people of Nevada.”

Law Students Help Nevada Streamline Gaming Licensing Process

By Nevada News Bureau Staff | 8:15 pm June 20th, 2011

Nevada is about to shorten and streamline the process of determining gaming licensing suitability for applicants, and gaming law students at the William S. Boyd School of Law can claim the credit.

The bill was created and lobbied by students in cooperation with the gaming control agencies. Gov. Brian Sandoval signed A.B. 213 into law near the end of the legislative session.

The measure authorizes the Gaming Commission to issue a “preliminary finding of suitability.” This procedure subjects an applicant to the same level of investigation by the Nevada Gaming Control Board as an applicant for a non-restricted gaming license but does not authorize involvement in the gaming industry.

The advance determination of suitability is expected to shorten the investigation time necessary for approval of a subsequent application to be licensed for a particular involvement, such as casino ownership or operation.

Left to right: Attorney Brin Gibson, Boyd law student Jaime Serrano, Gov. Brian Sandoval & Professor Bob Faiss

“Nevada is the gold standard for regulating gaming and we must continue to be,” Governor Sandoval said.

Prior to the passage of A.B. 213, in order to apply for a gaming license or a finding of suitability, persons had to have either an existing involvement with the gaming industry or an agreement that gave them the right to such involvement.

The legislative bill was a project of a gaming law seminar taught by Adjunct Professors Bob Faiss and Greg Gemignani, both gaming law attorneys at the firm of Lionel Sawyer & Collins.

Faiss predicted the legislation will enhance the orderly flow of new investment in the Nevada gaming industry.

“I believe it is a fundamental and beneficial change to our gaming control system and is consistent with Governor Sandoval’s resolve to have a gaming control system that is responsive to the realities of the modern gaming industry,” he said.

The bill also includes a provision to improve the process for gaming control disciplinary complaints.

The Gaming Commission must still adopt regulations to implement provisions of the bill.



Bill That Could Bring State Millions From Casinos Survives Bill Deadline

By Andrew Doughman | 2:55 pm April 14th, 2011

CARSON CITY –Assemblyman William Horne, D-Las Vegas, nudged his bill out of committee today, meaning the state could secure anywhere from $20 to $50 million from the casino industry.

Under Assembly Bill 219, if you lose or do not redeem a paper voucher printed from a slot machine, the state would sweep that money into its coffers as unclaimed property. Right now, casinos pay taxes on that money and count the remainder as revenue.

The casino industry won one concession already, and Horne said he is still working with representatives to ease the bill’s passage on the Assembly floor. Under Horne’s amendment, the casino industry would keep 25 percent of unclaimed winnings while 75 percent of those winnings would transfer to the state.

Casinos would still pay taxes on the 25 percent they keep.

“We’re still negotiationg parts of this bill,” Horne said. “I’ve agreed to, while moving it out today, it won’t move out of our house until we make some other final amendments to the bill.”

Pete Ernaut, lobbyist for the Nevada Resort Association, said that he would like to see Nevada copy a similar law in New Jersey.

In New Jersey, 75 percent of unredeemed winnings revert to the casinos and 25 percent go to the state.

“I said I don’t like that, you have to flip it,” Horne said.

Given their opposing positions, Ernaut hinted that he would like a 50-50 split.

Horne, however, said he is “doubtful” that he would agree to that.

Ernaut intends to press the point.

“I imagine it’ll end up somewhere between those two points,” he said.

During today’s hearing, Horne also said that Nevada’s Gaming Commission may handle the transfer of money to the state. This would break the precedent that all unclaimed property reverts to the Treasurer’s office.

Horne’s argument at the bill’s first hearing in March was that the person owns the voucher rather than the casino. Additionally, he said it would be impossible to track down the owner of the voucher. So that money should revert to the state as unclaimed property.

Ernaut had argued that the state would have to try to match a voucher to a person.

“We also would contend that this does not become the property of the player until it is redeemed,” Ernaut said.

This would negate Horne’s argument that the voucher becomes a player’s property – not the casino’s – when the slot machine spits out a ticket.

But Horne dismissed Ernaut’s arguments.

“The opposition, they would like this to be a very complicated issue,” Horne said. “In the end, this is a simple case on unclaimed property and who should get it. All the other stuff just muddies the waters and tries to make it more complicated than it actually is.”

Progressive groups have voiced support for the plan since any new revenue the Legislature finds can help negate cuts in the governor’s proposed general fund budget.

Horne is chairman of the Assembly Judiciary committee, which heard the bill and passed it. It now moves to the Assembly floor for a vote.

Moody’s Downgrades Nevada’s Credit Rating

By Andrew Doughman | 2:09 pm March 24th, 2011

Despite upgrading Nevada’s outlook from negative to stable, the credit rating agency Moody’s downgraded Nevada’s credit rating to Aa2 from Aa1.

The rationale behind the adjustment involves Nevada’s Legislature. Moody’s cited the two-thirds supermajority required to raise taxes as a negative in Nevada.

The Moody’s report released today notes that the potential need to renew the temporary tax increases passed during 2009 could create a challenge for the Legislature.

The governor has said he does not want to extend those tax increases.

“Also, a two-thirds majority of each house of the Legislature is required to renew the taxes into the 2012-2013 biennium and beyond,” writes Moody’s analyst Julius Vizner. “The supermajority requirement to raise taxes presents a hurdle to achieving balance on an ongoing basis going forward.”

The report also notes that Nevada’s economy is largely dependent on discretionary spending in the gaming and tourism industries.

According to the report, Nevada’s revenue base lacks diversity. The state depends too much on revenues from sales tax and gaming revenues. An economic recovery in Nevada could stall if either of those revenue sources falter.

On the positive side, Moody’s analysts note that Gov. Brian Sandoval has the will to make budget cuts.

The report also noted that Nevada has a relatively low debt burden at $2.4 billion and, as the Nevada News Bureau has reported before, the outlook for funding Nevada’s pension system is bright.

Nevada’s declining home prices, however, stymie economic growth.

The collapse of the housing bubble has ratcheted property values down, which presents challenges to lawmakers crafting the state’s budget.

Today, financial officers at Nevada’s school districts testified before a legislative committee about declining property tax collections.

Nonetheless, Moody’s cited upticks in gaming revenues as a sign of a nascent economic recovery.

“The stable outlook reflects our expectation that the economy will recover slowly in the state and that the state’s finances will be weak in the next biennium,” Vizner wrote.

According to Moody’s, Nevada’s credit rating could bounce back if it diversifies its economy and tax base while growing its economy as a whole.

Likewise, Moody’s indicated that it would further downgrade Nevada’s rating should the Legislature delay implementing reforms to the state’s tax base.

Nevada’s credit rating might further erode if it does not cut spending if revenue collections fall short of projections.

Nevada will receive a formal revenue forecast on May 1, which will be crucial for legislators as they piece together the state budget for the next two years.



Assembly Republican Suggests Tax Reform Debate

By Andrew Doughman | 10:46 am March 8th, 2011

CARSON CITY – Assemblyman Pat Hickey, R-Reno, says he is interested in changing the state’s tax structure.

He wrote in a weekly newsletter he might consider broadening the state’s tax base, an idea that he has talked about with UNR economics professor Elliott Parker.

“The good professor understands scientifically what we all know intuitively – that the golden goose of gaming in Nevada will never again lay the same revenue egg that the Silver State has enjoyed for so long,” Hickey wrote. “Parker’s proposal for a small tax on the state’s new service economy – is worthy of serious consideration.”

Parker has suggested that the new tax could be coupled with a corresponding decrease in the sales tax. This would prevent the government from collecting more revenue. In theory, it would spread the tax burden around to a greater number of sectors.

“These kinds of revenue-neutral but long-term sensible approaches might attract members of the GOP to the table,” Hickey wrote.

Parker has written several editorials during the past months. He has advocated for more government spending rather than cuts, and has equated budget cuts to the Donner Party cannibalizing itself.

“If the Legislature passes a tax on services, but delays it for a couple of years, this would give us time to figure out how to best collect it, and we would avoid raising taxes during the depths of Nevada’s depression,” Parker wrote. “If we borrow against this future revenue to fill the current gap, we are just smoothing out when we spend it. We would not have to repay from moneys we won’t have, and not risk our credit rating.”

Hickey said the professor’s specific, revenue-neutral approach would fit into the Assembly Republican’s list of goals for the session.

The Nevada Policy Research Institute, a free-market think tank, has also advocated for a similar change in the state’s tax structure. They claim it would spread the tax burden around, although some disagree that it would be revenue neutral.

Hickey said he will not be introducing a bill for a tax on services with a provision for a reduction in the sales tax.

He said the proposal is worth “considering” and “discussing” during this legislative session.

The Legislature is 30 days into its 120-day session, and deadlines are fast approaching for lawmakers to submit bills.

Former Employees Still Owed Pay From Well-Connected Las Vegas Gaming Company

By Sean Whaley | 6:41 pm August 18th, 2010

CARSON CITY – Half a dozen former employees of a Las Vegas-based gaming company laid off last year say they are still owed about $500,000 in severance pay and other compensation even as the firm continues to receive financial support from high profile investors, including the brother of President Obama’s chief of staff.

One of the former TableMAX Gaming employees, Tyson Wrensch, said efforts to contact current company officials to resolve the compensation issue have not produced any results so far.

Wrensch said he personally is owed about $65,000 for salary and commissions prior to being let go by the firm in August of 2009. Collectively the group is owed an estimated $500,000.

“I keep getting the runaround and that’s not right,” Wrensch said. “A gaming company in Nevada should not be allowed to operate that way.”

TableMAX President and CEO Ron Altbach said today that the company is in the process of offering settlements to the group of former employees.

“We drew up some ideas yesterday,” he said. “We will be contacting each of the employees to come to a resolution. Nobody will be thrilled but I think they will all be satisfied. That’s where we are right now.”

Altbach would not disclose details of the offers, and several former employees say they will reserve judgment. But the former employees also say that the company and its investors have been nonresponsive for months.

“The company has ignored hard working middle class people who worked to make the company a success,” said former employee Sheri Hanks, who is working a temp job in Texas. “That severance pay would have really helped.”

Hanks said that if the offer involves stock in the company it won’t be satisfactory.

“I don’t want stock in a questionable company,” she said.

In response to Altbach’s comments, Wrensch said: “No one at the company has bothered to reach out to me once since I was laid off but it’s just the same story I’ve been hearing about having something soon. TableMAX owes us all our paychecks and we are through being patient.”

TableMAX makes an electronic table game that offers Progressive Blackjack or Caribbean Stud on a large video screen that up to five people can play at one time. Wrensch said the games he placed in several tribal casinos are still in use.

“TableMAX is continuing to make money and earn money off of machines I placed,” Wrensch said. “So there is some frustration in that I’ve been a nice guy but nothing seems to get done.”

One of the major investors in the company is Hollywood powerbroker Ari Emanuel, brother of Rahm Emanuel, who serves as chief of staff to President Barack Obama. An October 2008 Securities Exchange Commission filing identifies Ari Emanuel, who is the model for the fictional Ari Gold on the HBO series “Entourage” as one of the major stockholders in the company.

The filing also shows that TableMAX has a consulting agreement with Ari Emanuel in exchange for common stock.

The TableMAX games are not offered in Nevada casinos and the company does not have a Nevada gaming license. The company let the former employees go at different times during the second half of 2009 and now maintains only minimal staff.

Wrensch’s comments were supported by other former employees, including former Chief Financial Officer Paul Kimmel, who said he is owed about $89,000 for severance pay, accrued vacation and unreimbursed medical costs.

“The company has pretty much stiffed all of us,” he said.

Wrensch said he spoke with Ari Emanuel regarding his situation in July and was referred to the new management that had taken over the day-to-day operations of the firm in late 2009. Wrensch said his calls were never returned.

Ari Emanuel could not be reached for comment.

Altbach said a former company chief executive officer entered into agreements with the former employees that were overly generous by industry standards. The agreements have caused a lot of confusion for the new management. Investors and company officials are trying to get TableMAX back on track, he said.

“We don’t want to be dishonorable,” Altbach said.

Altbach has his own high profile connections as a songwriter and performing member of the Beach Boys dating back to the late 1970s.

The former employees say they are contemplating a lawsuit to recover what they are owed, although that decision will now await a review of the settlement offers. Nevada labor laws cover only unpaid salary and commissions, not severance or other details of individual employee contracts.

One former employee is already involved individually in litigation over his pay.

Wrensch said he has also filed paperwork with the state Labor Commissioner about his back pay and commissions and is awaiting a response.

The company, which is publicly listed, saw its shares worth about $1 in October 2009, but now the company is valued as a penny stock. The stock is not actively traded and was valued at six cents a share as of June 30.

Even so, Wrensch said the company has significant value in its patented intellectual property. Based on those patents, the company is involved in a patent infringement lawsuit with Shuffle Master, another electronic gaming manufacturing company. Filed in April 2009, the lawsuit alleges infringement of patents protecting proprietary electronic devices and system architecture used in TableMAX multiplayer games.

Wrensch and several other employees have found other jobs, although two of the former employees had to relocate out of state to do so. Others have not been as fortunate.

Kimmel said there have been some recent rumors that TableMAX might try to resolve the compensation issue only by offering former employees equity in the company.

But Kimmel, who is still in Las Vegas, though not employed, said that he needs the money owed to him, not equity of questionable value.

“I’m certainly disappointed,” he said. “I think they should make a reasonable attempt to settle with the former employees, with at least a healthy percentage being cash.”

Wrensch said: “It is disappointing that companies like this exist.”


Audio clips:

Former TableMAX employee Tyson Wrensch says the company is making money but has not responded to former employees regarding their unpaid compensation:

081710Wrensch1 :20 commission on those.”

Wrensch says company executives won’t even return calls:

081710Wrensch2 :24 working on something.”

State General Fund Tax Revenues To Come In $100 Million Above Projections

By Sean Whaley | 1:10 pm July 13th, 2010

CARSON CITY – Nevada State Budget Director Andrew Clinger said today he expects the current two-year budget to end up next June 30 with about $100 million more in tax revenues than projected in January.

While there are increased costs to the state that will offset that optimistic assessment, the higher than anticipated tax revenues should help carry the state forward into the 2011 legislative session in February without the need for any further budget cuts, he said.

The state is about $57 million ahead in tax revenues right now, with sales and use taxes, the modified business tax and the insurance premium tax all above projections, Clinger said. If that trend continues, the state will hit or exceed the $100 million mark by the end of the biennium, he said.

Increased costs to the state include higher Medicaid caseloads, which are expected to cost about $10 million more than budgeted, Clinger said.

The state was also counting on about $88.5 million from the extension of a Medicaid program by Congress, but that is not now expected to be approved, he said. A number of states were anticipating that Congress would approve a six-month extension of a temporary enhancement to the program which provides funding for state Medicaid and other health programs. The temporary extension would have brought $88.5 million to Nevada and was included in the state budget.

Another $9.4 million for the state’s welfare program, called Temporary Assistance to Needy Families, was part of the same bill that now won’t be forthcoming either, he said.

“We have pluses and minuses,” Clinger said. “But when you sort of take the additional revenue that we have and start subtracting those things off, we’re going to end up pretty close to what we thought we would during the special session.”

The Legislature in February approved $800 million in spending cuts and limited fee increases to balance the current two-year state budget.

Clinger said one wild card is a legal challenge to the state’s use of $62 million taken from Clark County for a pipeline project as part of the plan to balance the budget. That diversion of funds is being challenged in court by the Clark County Clean Water Coalition.

The money was counted on in the budget for the current fiscal year that began July 1, and the Legislature will have to address the issue should the funding not materialize, he said.

The positive change in tax revenues from projections made in January by the Economic Forum are being seen in most major state revenues. Gaming revenues are an exception so far.

Frank Streshley, an analyst with the Nevada Gaming Control Board, reported last week that the final gaming numbers for fiscal year 2010, which ended June 30, were about $8.5 million below the forum projections.

Taxable sales for April, released earlier this month, were up 2 percent, the first increase in 20 months. The general fund portion of the sales and use taxes is 3.2 percent, or $19.3 million, above the Economic Forum’s forecast for the 10 months of fiscal year 2010.


Audio clips:

State Budget Director Andrew Clinger on new tax revenue forecast:

071310Clinger1 :20 of the biennium.”

Clinger on the balance between new revenues and unanticipated expenditures:

071310Clinger2 :17 the special session.”

Gov. Gibbons Legal Defense Fund Dried Up Along With Campaign Contributions

By Sean Whaley | 12:50 pm June 22nd, 2010

CARSON CITY – Lame duck Gov. Jim Gibbons not only fell short in campaign contributions in his recent primary loss to Brian Sandoval, but donations to his legal defense fund have dried up as well.

According to Gibbons’ legal defense fund report filed in January with the secretary of state’s office, the outgoing governor received only a single contribution in all of 2009 – $10,000 from Antonio and Maria Alamo of Las Vegas, on Oct. 26, 2009.

Gibbons’ legal bills have not seen a similar decline, however. The report shows just over $44,000 in expenses in 2009, with most of the total, about $29,000, going to his attorney.

Gibbons formed his legal defense fund in 2007 in response to several pending legal issues, including an alleged assault of a Las Vegas cocktail waitress in 2006 while running for governor.

By contrast to the 2009 report, Gibbons reported receiving $230,000 in contributions to his defense fund in 2007, although $61,000 of the total was a loan he made to the fund.

One legal issue still looming large for Gibbons is a federal lawsuit filed by cocktail waitress Chrissy Mazzeo, who alleges Gibbons assaulted her in October 2006 in the Howard Hughes Center parking garage in Las Vegas after the two left a restaurant. Depositions have been taken in the case.

The one donation on the Gibbons legal defense fund report is from the parents of Gaming Commission member and Las Vegas physician Tony Alamo Jr. Alamo Jr. was appointed to the commission by Gibbons in 2008. Alamo Jr. had previously served several years on the Nevada Athletic Commission.

Both Alamo senior and junior are also members of Republicans for Reid, a group of prominent Nevada Republicans who are supporting U.S. Sen. Harry Reid, D-Nev., in his re-election campaign.

A Deal!

By Elizabeth Crum | 9:39 pm February 27th, 2010

Looks like we can all go home tomorrow.  All the details to follow, but they worked out the mining thing, and the bank fees plus education cuts everyone could live with.

Faces beaming in the halls.

And, amazingly, the Senate is in session right now discussing Water.

Update (9:44 p.m.):  Per Ralston, on Channel 3 just now, education cuts = 6.9%.  So, less than the governor’s 10% but more than the 5% for which the Democrats hoped.

And gaming, apparently, got off scot-free.  This time.

Afternoon Updates, Gibbons in Leg Building, Possible Deal Tonight?

By Elizabeth Crum | 5:32 pm February 27th, 2010

The governor is in Buckley’s office with both she and Horsford.  We’re hearing there is a strong possibility of a deal tonight.  We can only hope…


– Re: gaming, Horsford said earlier there’s a “placeholder” for them. Meaning, prob’ly, we’ll ding ‘em with whatever is needed at the end.

– Looks like we’ll hear Water, but many in Assembly saying there is not enough time to fully examine and understand it now.  Want to wait until 2011 session.  A consultant submitted a letter on the issue today; Ralston has it.  Not long after it was posted, Bob Fulkerson of PLAN sent out an email missive pointing to the link to the letter on Ralston’s blog and saying the following:

The memo linked above is from a California financial manager with extensive financial ties to Clark County. (Yes, it is in his self interests to do what Pat Mulroy tells him to.) It has just been delivered to members of the NV Legislature.

It’s a thinly veiled threat that, without coming right out and saying it, admonishes the Legislature to overturn the recent Supreme Court ruling upholding due process for water protestants. Failure to act now could threaten credit for Las Vegas, the memo alleges. It completely ignores the fact that further additional processes will not even truly delay SNWA’s Pipeline Project, which will not be built for many years anyway – if ever.

The memo is a gross over-reaction to a very narrow ruling in a case involving major Constitutional due process problems. These issues cannot be legislated away. Trying to do so will only create a more complicated mess for every branch of Nevada’s government.

If you have not contacted your legislators yet telling them what an abominations this bill is, please do so right now!

– Earlier, Ralston Flashed that “lawmakers have only transmitted two of the session’s bills to the governor’s office” — electronic child support measure and the bill to pay for the special session — “leading the Gibbonsites to believe they hope to send most over at once so the veto clock is synchronized on them. No one wants the veto/override scenario but it’s possible lawmakers are not taking any chances so are holding all bills until a deal is reached.”

– Education progress:  Passage of three bills: AB4, AB5 and ACR 2.  AB4 provides school districts the flexibility in previously mandated class-size reductions for first-to-third grades (i.e. allows districts to increase student-teacher ratios by 2 students per class – 18-to-1 in 1st and 2nd grades, and 21-to-1 for 3rd).  Will result in some teacher layoffs and/or transfers in some counties.  AB2 allows school districts the flexibility to use money that has been specifically earmarked for new textbook purchases to be used for other stuff.  Both AB4 and AB2 are temporary; they sunset on 6/30/11.  ACR2 asks school districts to make every effort to do what they can to avoid massive layoffs and make sure that the quality of education does not diminish during the crisis.

– LG Brian Krolicki earlier testified before the Assembly on the GOP’s idea to securitize unclaimed property funds. Dems grilled him as to why trading future revenue for a one-time payoff is a good idea. Some of my Tweets from that interaction:

– Krolicki on Assembly floor: “This idea to monetize unclaimed property is only a tool to bridging gap…could generate up to $120M.”

– Krolicki (cont): “…agreeing 2 enter into selling of securities…need 2 pledge at 2x coverage ($14M/year) at conservative rate (5%)”

– Speaker Buckley interrupts Krolicki: “I am going to put a limit on length of Qs & As. We’d like to sine die sometime soon.” #nvss #amen

Note:  #nvss = nevada special session (search and follow the tag for all the coverage)

– Conklin to Krolicki: “…aren’t we just adding to next biennium’s shortfall by taking this money?” Krolicki: “Better of bad options”

– Gansert 2 Krolicki: “Could this be held as a last resort, maybe even pull trigger in 2011; how fast could we move?” K: “60 to 90 days”

– State Treasurer Kate Marshall on reality of $ from unclaimed property: “$50M in ’09 was record year. $77M in, $27M paid back.”

– Buckley asking about side-by-side analysis of this in other states. Marshall says CA & AZ did similar, bond/credit rating downgraded.

And a good Tweet from Ralston:

– I am puzzled: Why is this monetization scheme any more ridiculous than any of the other gimmicks they are using to balance the budget? #nvss

– Ed Goedhart, the sole “no” vote on two Assembly measures so far, reconfirms he will vote “no” on all “revenue enhancing measures,” even the ones suggested by his fellow Republicans, with the exception of borrowing money from the Clark County School District Capital Projects Fund and the possible exception of borrowing from the Clark County Reclamation Fund.  When asked if he will be the “sole” No vote on the other measures, he said, “I wouldn’t be surprised.”  His explanation is the same as always when asked.  “These are temporary band-aids. We’re looking at a $3 billion shortfall in the next biennium.  We need reform, not these desperate measures that kick the can down the road.”

– Other Assembly Republicans are not saying much (at least, not to me).  Snapped and Tweeted a pic of Oceguera discussing the budget with Settlemeyer, Hambrick, Goicoechea and Hardy during a brief Assembly recess earlier this afternoon.  For whatever that is worth.

Budget Puzzle Remains Incomplete as Legislature Starts Special Session

By Sean Whaley | 8:42 am February 24th, 2010

CARSON CITY – As the Nevada Legislature plodded through the first day of a special session called to erase a nearly $900 million budget shortfall yesterday, several key proposals promoted by different interests to help resolve the fiscal crisis remained works in progress.

Lobbyists representing the mining industry said they were talking with lawmakers but had nothing to announce on an acceptable method by which the industry could contribute financially to erasing the deficit.

“No update,” said Pete Ernaut, a lobbyist for the Nevada Mining Association, on the progress of talks with legislative leadership.

Ernaut and Jim Wadhams, a lobbyist representing the Newmont Mining Corp., both told lawmakers last week that they oppose Gov. Jim Gibbons’ plan to reduce deductions given to the mining industry on the net proceeds of minerals tax to generate $50 million toward the shortfall.

The gaming industry, another potential source of revenue to assist the Legislature in balancing the current budget, is also awaiting some concrete plan from lawmakers, said Bill Bible, president of the Nevada Resort Association.

Lawmakers are considering a fee increase on the gaming industry to cover the costs of operating the Gaming Control Board, the state agency that regulates the gaming industry. The gaming agency received $31.7 million in general fund support in fiscal year 2009. Raising fees by some amount would free up general fund money to offset some of the 10 percent budget cuts Gibbons has proposed for state agencies and education to balance the budget.

“If you look at last year it was the worst year in the industry’s history,” Bible said. “The industry is obviously struggling.”

Fee proposals have been raised with some gaming properties, but there has been no decision either way because there is no firm plan yet in place, he said.

“If you are going to support something you want to know what the proposal is and we don’t have the proposal,” Bible said. “Clearly you have to put it in the context of huge loses within the industry. It’s not like there is $32 million lying around in petty cash. It’s not there.”

The industry lost $6.8 billion in fiscal year 2009 according to a report issued last week by the Gaming Control Board. The same agency reported that calendar year 2009 saw the largest percentage decline in gaming revenue since records first were kept in 1955.

Another source of revenue, a $4.2 billion, local government capital construction fund that could be tapped by the Legislature, remains in play as part of a solution to the budget shortfall.

Senate Majority Leader Steven Horsford, D-Las Vegas, when asked about the fund, said: “We’re scrubbing it. It looks positive.”

Local government officials have asked the Legislature not to tap into the fund, which is made up of funds for construction projects for many local government entities, from the water district to the Clark County School District.

Clark County Commissioner Tom Collins, attending the first day of what could be a four-day or longer special session, said the fund should be used for its intended purpose: to build much-needed infrastructure in Southern Nevada. The public works projects, from roads to school rehabilitation, create good paying jobs in the region’s devastated construction industry, he said.

Tapping into the fund could also harm local government bond ratings, Collins said.

“If you go take somebody’s bank account you harm his credit worthiness,” he said. “Then you weaken those local governments whether it is a city or a county. We’ve been responsible in Southern Nevada. Don’t jeopardize our credit worthiness because of maybe the faults of the state program. If you take away that funding, you will take away jobs.”

Gibbons is so far standing by his budget plan, but some lawmakers have questioned a few elements, including the mining tax deduction and a program to use traffic cameras to catch uninsured drivers. The Gibbons administration believes that $30 million could be captured from the project.

Some lawmakers remain skeptical.

Senate Minority Leader Bill Raggio, R-Reno, said he believes that $200 million to $300 million of the governor’s budget plan is unworkable, creating a hole lawmakers must now figure out how to fill.

All-Time Record Percentage Decline in Gaming Win in 2009

By Sean Whaley | 4:36 pm February 11th, 2010

CARSON CITY – Nevada’s gaming win in calendar year 2009 tumbled to its worst performance since records began 55 years ago, declining 10.4 percent over 2008, the state Gaming Control Board reported today.

The $10.4 billion win in 2009 represents the worst percentage drop since 1955, said Frank Streshley, chief of tax and licensing for the board. The second worst year on record was 2008, when revenues declined by 9.7 percent, he said.

The only other two declines on record were modest, coming in 2001 and 2002, Streshley said.

“Prior to this decade, since we’ve tracked the numbers since 1955, we’ve not ever had a decline until 2001, and then within this decade we’ve had four declines, with the largest being 2009 at 10. 4 percent,” he said.

Despite the gloomy numbers, there is reason to believe a turnaround may be under way, Streshley said.

In the first six months of 2009, gaming win was down by 13.4 percent over the same period in the prior year. In the second six months the decline was 7.2 percent.

The agency also released the December gaming report, which showed a 3.2 percent decline over December 2008. Even so, the Strip was up in December, posting a 5.9 percent gain primarily due to a big baccarat win, Streshley said.

The baccarat win was $158 million, a 103 percent increase over December 2008.

The total December statewide gaming win was $859.3 million.

Another likely factor helping the Strip numbers was the opening of CityCenter. Two of the hotel towers opened on Dec. 1, and Aria the casino opened on Dec. 16.

But no other gaming market in the state in December saw a gain except the Carson Valley.

After the first gaming revenue gain in 22 months in November 2009, Streshley said he was a bit disappointed at the December decline.

New Year’s was supposed to be strong, but only Dec. 31 is reflected in the December report, he said.

Nevada Gaming Industry Reports First Revenue Increase in Nearly Two Years in November

By Sean Whaley | 10:53 am January 12th, 2010

Nevada gaming revenues increased in November for the first time in 23 months, the state Gaming Control Board reported today. A big baccarat win by Las Vegas Strip casinos was a major reason for the increase.

The $873.2 million in total gaming revenue statewide was a 4.35 percent increase compared to November 2008, when the casino industry reported $836.8 million in revenue.

Revenues were up 6.9 percent in Clark County to $750.8 million, with the Las Vegas Strip showing an 8.3 percent increase with $473.8 million in revenues.

Washoe County continued in the negative category, with a 4.2 percent decline in gaming revenues compared to November 2008.

For fiscal year 2010 through November, gaming revenues are now 7.9 percent below the prior fiscal year.

“November’s gaming win increase of 4.4 percent ends 22 straight months of declining gaming win for the state,” said Frank Streshley, chief of the Tax and License Division. “The last increase in statewide gaming win, prior to this month, was in December 2007.

“This month’s results benefited heavily from strong table games play, including a 137 percent increase in baccarat win,” he said.

Casinos that offer the card game, most of which are located on the Las Vegas Strip, won $94.2 million on the game in November for a 137 percent increase over November 2008. The game is preferred by high end gamblers.

Double-Digit Decline in Nevada Statewide October Gaming Win Called Disappointing

By Sean Whaley | 11:08 am December 10th, 2009

CARSON CITY – Nevada gaming revenues declined significantly again in October after two months of what was hoped to be the beginnings of a turnaround in the state’s biggest industry.

A state Gaming Control Board official called the 11.6 percent decline in statewide gaming win a “disappointment.” The decline came off of an October 2008 report that was down 22.3 percent over October 2007.

It was the 22nd straight month of statewide consecutive gaming revenue declines.

Total gaming win was just $800 million compared to $905 million in October 2008. It was the lowest win since December 2003.

The state had seen only single-digit declines in gaming win in August and September, hinting at the possibility of a bottoming out of Nevada’s gaming economy.

Frank Streshley, control board Tax and License Division chief, said one reason for the poor performance is that gamblers were luckier than usual on table games in October. The “hold,” or amount of the wagers retained by casinos from gamblers, was lower for most of the major games, from craps to blackjack.

“The luck factor can go either direction,” he said. “Volume on the game side was up.”

The hold on blackjack in October was 10.2 percent versus 12.7 percent in October of 2008. The craps hold was 11.3 percent versus 14 percent in October 2008. Other table games were similarly lower except for baccarat, a game favored by high end players, which was slightly higher compared to October 2008.

Baccarat was one of the few bright spots in the report, Streshley said.

“We continue to seeing strong play on the high end baccarat,” he said.

Casinos won $65.4 million on baccarat in October, up 61.4 percent or about $25 million over last year. The “drop” or the amount wagered by baccarat players was also strong at $709.8 million, up 43.7 percent over October 2008.

The monthly gaming report released today showed total game and table win statewide of $252.5 million, down 10.6 percent over October 2008.

The slot win statewide of $537 million was down 12.1 percent over the previous year.

On the Las Vegas Strip, casinos took in $426.3 million, down 10.3 percent.

Downtown Las Vegas was off 16.4 percent, Reno was down 16 percent and South Lake Tahoe was off 24.1 percent.

The disappointing win came despite a sold out concert by the rock group U2 on Oct. 23 that brought in 42,000 fans to Las Vegas.

Gaming Revenue Down Again In August

By Sean Whaley | 4:22 pm October 8th, 2009
CARSON CITY – It could almost be considered good news.

For only the second time in the past 11 months, Nevada casinos reported a single rather than double-digit decline in gaming win, this one coming in August compared to the same month in 2008.

Nevada’s statewide casino industry reported a win of $847 million in August, a 9.3 percent decline from August 2008 when the win was $934 million, according to a report released today by the Gaming Control Board.

It was the 20th straight month of revenue decline for Nevada’s biggest industry.

While a single-digit loss was encouraging, Frank Streshley, control board Tax and License Division chief, cautioned that the casino industry is expected to continue to suffer for several more months before an anticipated turnaround sometime in the first half of calendar year 2010.

Baccarat, a card game preferred by high end players, saw a 48.5 percent increase in win by casinos in August to $109.5 million. Without this play, likely the result of international players drawn to the Las Vegas Strip due to a weak dollar, the Nevada gaming win would have been off by double digits yet again, Streshley said.

“I can’t say we’re at the bottom, not with a 9 percent decline,” he said. “Again it’s not double-digit. Without the baccarat play it definitely would have been. So we still have a ways to go.”

The revenue report shows the gaming win in Clark County in August was down 6.7 percent to $708 million. On the Strip, the win was off by 9 percent and totaled $450 million.

Two Clark County markets, both with new properties, were the only two regions in the state to show an increase in gaming revenue. North Las Vegas, where Station Casinos Aliante Station opened in November 2008, saw gaming revenues up 22 percent to $22 million. The Boulder Strip area, where the M Resort Spa Casino opened in March, saw an increase of nearly 22 percent to $63 million.

The numbers were even bleaker in other areas of the state.

Washoe County saw a nearly 21 percent drop to $74 million, while the South Lake Tahoe market was off nearly 29 percent to $22 million.

For Washoe County, it was the 26th straight month of revenue declines. The August win for the county is the lowest for any August since 1989, Streshley said.

For the South Shore Tahoe market, the August win was the lowest since the board started keeping monthly statistics in 1983. In August of 2000, gaming win in this market was $44.1 million.

One factor to consider in analyzing the August report is that the three-day Labor Day weekend fell entirely within September this year, Streshley said.

Overall it was a tough summer, he said. For June through August, revenues were off 11.9 percent.

The continued decline in gaming revenue will keep the pressure on Gov. Jim Gibbons and the Legislature to deal with lower than anticipated tax revenues. A special session of the Legislature is a possibility if revenues don’t show some sign of recovery or at least stability by later this year.

Gaming taxes, a major source of state general fund revenues, are off 7.85 percent for the first three months of this fiscal year and total $153 million.

The forecast for this revenue source was a decline of 4 percent for this fiscal year, but Streshley cautioned that the target could still be hit if the industry rebounds in the second half of the fiscal year.

State Budget Director Andrew Clinger said the August report doesn’t change the budget picture one way or the other.

“We’re down about $7.5 million in gaming revenues so far,” he said. “It’s nothing too alarming at this point. We still have to wait until we get the final first quarter numbers and then we will make a decision.”

Those first quarter numbers are expected by the end of November.

With sales tax revenues included, the state is off by about $10 million from its projections so far this fiscal year, which began July 1. As to whether a special session of the Legislature will be needed, Clinger said it will depend entirely on how severe the shortfall becomes over the next few months.

But any decisions on how to balance the budget will include the Legislature, either in a special session or in cooperation with the Legislature’s Interim Finance Committee, he said.