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Notes on inequality and the screwing of the little guy in Las Vegas

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Las Vegas is one of those American cities where intense inequalities of wealth and status aren’t just obvious, they are rubbed in your face. Wealth and power brings with it the luxury of $1,000 bottle service, stretch limos and the right to hire a private police force to roust the homeless out of your neighborhood.

On the other side of the economic fence, and sometimes just a block or two away, are grinding poverty, failing schools and life on the margins. CityLife looks at five areas in which the little man, the one without the limos and the bottle service, fares here.

1.

Nevada is a state where Caesars Entertainment Chief Executive Officer Gary Loveman made $20.4 million in 2011, according to the Review-Journal last year.

A person working in Las Vegas’ casino housekeeping staff — perhaps in one of Mr. Loveman’s own casinos — would make from $14,000 to $26,000 as a supervisor, with an average of $18,000 annually, according to Indeed.com, an online job-search and job-posting company. In other words, it would take more than 1,100 housekeepers to equal one Gary Loveman.

Other working jobs pay somewhat less dismally. A substitute teacher makes $22,000. A full-time “tutor teacher” at the top of the scale can take home $47,000 a year. A taxi driver can bring home $35,000 to $40,000, with the average closer to the bottom of that scale.

A select few are making much, much more. Las Vegas has no lack of other multi-million-dollar salaries. Michael Yackira of NV Energy, again in 2011 numbers from Forbes, made $7.7 million.

That’s small change compared to Spectrum Pharmaceuticals Chief Executive Rajesh Shrotriya, who, the Review-Journal reported last year, made $25.5 million in salary and benefits, including about $14 million in company stock.

Still not enough? Michael Leven, president of the Las Vegas Sands Corp., made $84.9 million in 2011, according to the RJ, including more than $71 million he made by cashing in stock options. Steve Wynn made $16.5 million; Sheldon Adelson, $13.8 million; Jim Murren of MGM, $9.9 million.

2.

While the rich are getting richer both in real terms and particularly in comparison to the wages of most workers, they can thank, in part, the state’s tax structure. Nevada consistently has one of the most regressive tax structures in the country, with those making the smallest incomes paying the highest taxes in percentage terms.

In large part, that is because of the reliance on sales taxes to fund local and state governments. In 2009, Nevada ranked eighth nationally for most regressive tax structures, with the poorest families paying on average 9 percent of their incomes to taxes. The wealthiest — the Lovemans, Wynns and Levens, for example — paid on average about 2.4 percent.

Four years later, Nevada is no longer among the worst 10 states in the nation for regressive policies, but that’s not much of an improvement, says Matt Gardner of the Institute on Taxation and Economic Policy.

“The difference between the 10th worst and the 15th worst is not that great,” he says. “The Nevada tax system remains one of the more out-of-balance and unfair tax systems in the nation. It will remain that way until Nevada enacts a state income tax.”

Gardner, however, doesn’t think it is likely that Nevada will soon throw out the constitutional prohibition against a progressive income tax, so in the meantime, stopgap measures like the payroll tax will make incremental improvements in the overall fairness of the tax system.

“A lot of people think of the sales tax as a small tax, something that hits you with drips and drabs,” he says. “But when you’re on the fringe of poverty, at the edge of the poverty line or below it, you know something as simple as needing $300 for a car repair can be the difference between having a job and not having a job.

“What appear to be small amounts in the eyes of policy-makers are very large amounts to low-income families. It’s a tax system that is irreversibly pushing poor people into poverty.”

3.

Some of that unfairness is going to get worse in the coming months. Nevada Legislators could not get a tax package past their session or Gov. Brian Sandoval, but they were able to give local jurisdictions the option to raise taxes.

The basic sales tax in Clark County could go up, with County Commission approval, by .15 percent to pay for more staff for police departments. The Legislature passed a law allowing the Clark County Commission to raise gas taxes in line with inflation, which could increase gas prices by 3 percent or year (or more, depending on the inflation rate).

4.

It’s not just your taxes. Your utility bills increasingly are hitting low- to moderate-income wage-earners in the wallet. Utilities like NV Energy, which plans to retire old coal plants and build new, cleaner, gas-fired plants, have a profit rate that’s guaranteed by law and protected by the Public Utilities Commission. So cut back all you want - the result will be higher rates. You will, in essence, have to pay more for the energy you use if you conserve too much. (You will save overall on your bill, but the cost per watt is going to go up.)

The utility made $322 million in profits last year, or an 8.71 percent rate of return, about half a point over what the Public Utilities Commission has set as the appropriate rate of return. That includes $10 million that consumers paid because they cut back their electricity use. The Nevada Consumer Protection Bureau is arguing that the utility should give some or all of that extra profit back.

NV Energy is a private company with a government-protected monopoly, but in practice that’s not so different from your local water provider. The Southern Nevada Water Authority and its regional distributors, including the Las Vegas Valley Water District, aka the Clark County Commission, increased prices last year in part to pay for a new “third straw” to Lake Mead, beset by cost and time overruns. Casinos and golf courses — industrial users that go through enormous amounts of water — saw increases of a few percent.

Small businesses and nonprofit groups saw water bills go up by 100 percent or more. And although residents who used relatively large volumes of water came out well in the increase, with a $5 across-the-board tax on all users, regardless of how much water they used, users who formerly had bills of $15 to $20 saw their bills jump by 25 to 30 percent.

But those increases, which hit the least affluent the hardest, pale in comparison to some other government revenue programs. As Review-Journal reporter Ben Spillman recently noted, a $20 parking ticket downtown might not seem like a big deal — unless you don’t have $20. After 30 days, the fee increases to $45, and after 60 days, to $60. That’s a higher interest rate than the high-interest payday loan shops that can ruin a family’s finances.

5.

The end result for many of these policies, says Shannon Monnat, a UNLV assistant professor of sociology, can be calamity. The lack of a social safety net and a regressive tax structure means that people can be pushed into extreme poverty and into homelessness.

Traditionally, we think of the homeless as men, but “homelessness among women and children is increasing,” she says.

A recent Las Vegas Sun report suggested that the homeless are disappearing downtown, thanks in part to interaction with the Downtown Project’s new private security force the Rangers and the Rangers cooperation with Metro. However, Father John McShane, who works with the homeless on the streets of Las Vegas, says he sees the numbers increasing outside downtown.

Gail Sacco, a homeless advocate who has worked for more than a decade on the streets of Las Vegas, gets a list of those who die homeless twice a year from the county coroner.

It’s a compendium of horror and tragedy. Many die from multiple causes, including organ failure, chronic alcohol and drug abuse. Others are beaten to death, or die from apparent suicide, or are gunshot victims. Of the 75 homeless who died on the street last year, the average age was just short of 54 years. The youngest was 29.