Columnist Jon Ralston: Mining history to find gaming parallel

Wednesday, March 29, 2000 | 9:26 a.m.

One hundred and thirty-six years ago the masters of the state-to-be were not pleased.

The issue was taxation, and the moneyed powers wanted none of it. In pursuing an exemption from taxation, as Michael Bowers noted in "The Sagebrush State," they were "clearly exhibiting one of history's oldest political axioms: additional costs are fine ... as long as someone else picks up the check."

One elected shill for the shadow government presented the argument, Bowers writes, that if it were not for the state's main industry, "all your stores would be removed, your farms would dry up, and be abandoned ..." In the end, a constitutional prophylactic was applied, and the industry was protected.

Does this sound at all familiar? An unelected oligarchy that pulls the strings for elected marionettes? A tax threat headed off by arguments about how the main economic interest drives the state's financial engine?

The only difference between mining in 1864 and gaming in 2000 is that the former is protected in the state constitution while the latter wasn't even represented until casinos were legalized in 1931. Oh, how the gamers have always been envious of the miners' seat at that table when Honest Abe admitted Nevada into the Union. Sure, the gamers have had seats at the Legislature -- figuratively in terms of their influence and occasionally literally, such as in 1991 when one of their lobbyists presented a tax on business to a legislative committee that morphed into the administration's plan.

But in 1989 Gov. Bob Miller, with a little help from the gamers, had to move heaven and earth to extract a relative pittance from the miners through a constitutional amendment. And now, as the gamers embark on their attempt to quash state Sen. Joe Neal's tax initiative while trying to rope other businesses into the tax corral, the constant undercurrent of casino-mining tensions is sure to rumble.

Although some gamers already are whispering about mining's profitability vis-a-vis their companies, others don't believe that mining will have to take a seat at the tax table when Gov. Kenny Guinn decides who will participate. As one mining representative put it: "Gaming's problem is not with mining. Their problem is with companies that don't pay anything." That is, gaming probably will leave mining alone because it prefers to concentrate on retailers and banks.

But many gamers are still galled by all that history and all that golden lucre. They know that it would be difficult to tax mining these days, not just became of the constitutional difficulties, but also because the price of gold has plummeted during the last decade.

I hope, though, that none of those gamers venture into cyberspace and check out Barrick Gold's Web page. They might see the proud declaration in a company news release: "Barrick achieves record year -- earnings rise by 10 percent, cash flow by 30 percent." Oh, the pain.

The miners, who have just about as much clout in Carson City as the gamers and more in Washington, should always be vigilant. There is no built-in loyalty to mining in Southern Nevada. And unlike the gamers, who can find other jurisdictions in which to build their projects, the miners are truly captive to where the gold is.

In 1864 the territory's miners feared what was happening in California, with wealthy parent companies siphoning off needed revenue. A depression in the industry also came along conveniently to help them make their argument.

Revenues declining because of money going to California? As they consider their taxing future and fret about the impact of Indian gaming (those who aren't investing in it, that is), the gamers should realize that while the names of industries may change, history does tend to repeat itself.