Will Brothels Help Nevada Weather the Econopocalypse?

Like every state in the union, Nevada faces a financial crunch, but that state has a unique revenue stream: Brothels. In-house prostitution is legal in counties with fewer than 400,000 residents. Currently 11 counties allow licensed brothels.

 While the $50-million-a-year industry--which has an economic impact of about $400 million on the state--pays hefty taxes to the rural counties in which they operate, individual bordellos only pay $100 a year to the state for their business licenses.

Las Vegas' mayor, the outspoken Oscar B. Goldman supports legalizing prostitution in Sin City, pointing out that many travelers believe sex-for-sale is legal throughout the state anyway:

They tell me we're missing tens of million of dollars that could be used for the school system, to keep jail guards employed, to provide mental health services.

Currently Nevada faces a $1.8 billion shortfall caused by flaccid tourist trade and a limp housing market. This month Republican Governor Jim Gibbons submitted a budget that included 6 percent pay cuts for teachers and a 36 percent reduction in all higher-education financing. The budget was rejected by the Democratic-dominated House and Senate.

Sen. Bob Coffin, chairman of the Senate Taxation Committee, is willing to hold a hearing on a proposal to legalize and tax prostitution in Las Vegas and other urban areas of the state. Coffin, a  Las Vegas insurance broker and book dealer, is also open to taxing strip clubs and escort services. And he has harsh words for critics of the proposal: