MGM Mirage Chief Executive Terry Lanni has proposed increasing Nevada’s business payroll tax as a way to raise revenues for the state’s depleted coffers.

Lanni’s proposal, announced Tuesday, calls for upping the payroll tax from 0.062 percent to 0.123 percent – a move that could generate $246 million a year for the state.

He proposed the payroll tax increase instead of a proposal from  the state teachers association and several gaming industry leaders to raise the room tax be increased by 3 percentage points to help pay for teacher salaries and other education costs.

Lanni has opposed that idea, saying it’s not sound tax policy to earmark revenue for specific needs,  according to a report in the Las Vegas Review-Journal.

He also has indicated he prefers the room tax be increased by 2 percentage points with the money going to the state’s general fund and legislators deciding how to allocate it.

Lanni also wants to divert a portion of the room tax that goes to the Las Vegas Convention and Visitors Authority to the state’s general fund.

The three moves, combined, could generate nearly $800 million for the general fund over two years, closing about two-thirds of the state’s deficit, the newspaper said.

 The teachers’ plan to raise room taxes by 3 percentage points would raise an estimated $162 million based on last year's hotel rates and occupancy levels. But Lanni indicated those assumptions are optimistic because they don't factor in the decline in room rates and occupancy that has already occurred as a result of the economic downturn.

The governor has cut the budget by $914 million, a figure that could increase to nearly $1 billion after next week’s special session. Gibbons called the session to address the latest budget problems.