Roberson’s mining tax proposal opens rift among Republicans

By Anjeanette Damon, Andrew Doughman

Wednesday, March 6, 2013 | 2 a.m.

In a single move fraught with exquisite political irony, Senate Minority Leader Michael Roberson, R-Henderson, both usurped from Democrats a favorite populist issue Tuesday and launched an effort that could kill a broad-based business tax favored by one of the Democrats’ most loyal constituencies.

Surprising lawmakers of both parties, as well as Gov. Brian Sandoval, Roberson announced that the majority of his caucus would back pulling the mining industry’s unique tax protections from the state constitution and support a ballot measure that would raise Nevada’s mining tax.

The catch: the measure to raise mining’s tax would be an alternative to a ballot measure backed by the teachers union to create a margins tax on business revenue.

Raising taxes on mining is a popular concept with the state’s urban voters, who largely believe the industry isn’t paying enough for the finite resource it is extracting from the state.

If both a margins tax — which would hit businesses large and small across the state — and a mining tax were on the ballot, odds are the mining tax would come out on top, ensuring the defeat of the general business tax.

Roberson’s political calculation in that regard seemed almost “genius,” as one Republican lawmaker put it.

But while the move may be designed to halt what Roberson calls the “devastating” margins tax, it also has opened up a rift among legislative Republicans and threatens to undermine the budget proposed by the Republican governor.

In a boisterous press conference Tuesday morning, six of the 10 Senate Republicans stood before reporters and confessed their support for asking voters if they want the mining industry to pay more. They included Roberson, Ben Kieckhefer, R-Reno; Joe Hardy, R-Boulder City; Scott Hammond, R-Las Vegas; Mark Hutchison, R-Las Vegas; and Greg Brower, R-Reno.

“Yes, we want to kill the margins tax,” Roberson said. “We also want to fix this anomaly in this state, where one industry is treated different than any other industry.”

Roberson was referring to the fact the mining tax is enshrined in the constitution, preventing lawmakers from adjusting the rate.

The reaction from the four Senate Republicans not at the press conference was swift and unkind.

“I'm not happy," said Sen. Pete Goicoechea, R-Eureka, whose rural Nevada district includes most of the state's largest mining projects.

“I don’t know if we’re sending the message right now to the mining industry that we’re going to throw you under the bus,” he added.

Sen. Barbara Cegavske, R-Las Vegas, opposed the move outright.

“I don’t support singling out one industry,” she said. “It wasn’t a good idea in ’03, and it’s not a good idea today.”

The reaction from many Assembly Republicans, who were not told ahead of time what the Senate Republicans were planning, was nothing short of anger.

“For those of us in the rurals, getting stabbed in the back by the Republicans — the party that supposedly opposes tax increases — is disgraceful,” Assemblyman Ira Hansen, R-Sparks, said.

Assemblyman John Ellison, R-Elko, echoed the sentiment.

“A bunch of us think the six individual senators should have come to see us before making a decision,” he said. “They should’ve come talked to us.”

Roberson and his allies expected the opposition.

“Obviously this is a plan that will need to be fully vetted and we are not committing anyone to this plan should they have any concerns or worries,” Hardy said. “We need to resolve those concerns, need to hear those concerns and we need to work with our friends the mining industry.”

But one Republican the proposal antagonizes could be the linchpin to defeating it altogether.

In the press conference, several of the Republican senators argued mining needs to pay more so the state can better fund education—a tacit implication, often made explicitly by Democrats, that Sandoval’s budget does not fund education enough.

Those same senators took care to laud Sandoval’s budget, noting he’s increasing education funding by $135 million without raising taxes that could burden businesses as the state’s economy recovers.

“I also think we need to fund education properly and this will be a great step toward that,” Hammond said of the mining tax proposal.

Hardy also linked his support of the mining tax to better funding education.

Kieckhefer tried to parse the issue.

“I don’t think this is in any way a reflection on the executive budget we received,” Kieckhefer said. “What we are talking about is figuring out a way to fund the accelerated implementation of the very programs the governor supports.”

When pressed, Kieckhefer acknowledged the state needs more money than Sandoval has recommended.

“We are talking about generating more money to put into education,” he said. “That is what we are talking about.”

Sandoval’s press secretary put out a measured statement that didn’t directly oppose Roberson’s effort.

“The governor’s budget included increased spending for education without increased taxes,” Mary-Sarah Kinner said in a statement. “The governor will not support a tax increase.”

Roberson’s proposal wouldn’t raise taxes. It would give that decision to the voters.

But getting the question before voters would likely require Sandoval’s OK. The constitution gives the governor the power to approve any alternative question put on the ballot to compete with an initiative petition.

Roberson says the Legislature’s lawyers can make the case that lawmakers can simply override a veto of the measure. But Sandoval likely wouldn’t accept that lightly.

“A simple reading of the constitution provides the plain meaning of the constitution requires the approval of the governor,” Kinner said in a written statement.