The proposal is the result of a negotiatedcompromise back in May between the Nevada State EducationAssociation, Wynn Resorts, Harrah's Entertainment and StationCasinos. The NSEA agreed to stop supporting a ballot initiativethat would have raised the tax on casinos' gambling win to pay forhigher teacher salaries and other educational improvements inexchange for the casino operators' support for a higher room taxinstead. Proceeds from the added room taxes would be used at firstto help make up for budget cuts in the worsening state revenueshortfall, and later to supplement regular K-12 funding.

The ballot initiative that won't go forward as a result of thecompromise would have raised the state's tax on large casinos to9.75% from 6.75%, a 44% increase. The compromise has the threecasino operators encouraging the Nevada legislature in 2009 toinstead raise the room tax as high as 13% from its current 9%, anadded cost that would be passed directly onto hotel guests.

The hike in hotel room taxes will require a two-thirds majorityof the legislature. If ultimately enacted, by the Legislature orvoters, it would raise an estimated $180 million in its first year.Jeremy Aguero, a principal with Applied Analysis, a locally basedbusiness research and advisory firm, tells GlobeSt.com that theactual figure is probably closer to $150 million--assuming roomrates hold up and development projects continue to come online asscheduled--while Nevada's budget shortfall is approximately $1.4billion.