Lawmakers not buying mining lobbyists’ defense of tax shield

By Andrew Doughman

Tuesday, March 26, 2013 | 5:20 p.m.

Nevada’s mining industry got blasted this afternoon during a testy hearing at the Nevada Legislature.

Mining lobbyists presented to seven state senators their reasons that it’s a “mistake” to pass Senate Joint Resolution 15, which would remove the industry’s constitutional tax rate and allow legislators to potentially raise mining taxes to pay for education and other state needs.

Several Republican senators who support a mining tax disputed the industry’s claims that removing the constitutional provisions could result in less, not more, money coming to the state.

“I have a lot of respect for your intelligence; I’m just not sure you have a lot of respect for our intelligence,” said Senate Minority Leader Michael Roberson, R-Henderson. “I think you have misled the committee ... We’re just not convinced by your arguments.”

Roberson pressed Nevada Mining Association President Tim Crowley to tell the public if the industry is neutral or in opposition to the resolution. He asked four times for a declaration of either opposition or neutrality about the resolution.

“We think it’s a mistake,” Crowley said in his fourth reply to Roberson.

Many people spoke in favor of removing the mining tax provision in the constitution; only Assemblyman Ira Hansen, R-Sparks, spoke against.

Saying his colleagues expressed “such shabby disrespect” for an industry that brings jobs and tax revenue to the state, Hansen said Nevada needs to be careful not to drive the industry out of the state with a high minerals tax.

But the resolution does not directly involve a tax increase.

The seven-member Senate Revenue Committee voted unanimously to pass the resolution, meaning the full Senate can now consider it for a vote.

If the resolution gets favorable votes in the Senate and the Assembly, Nevada voters will get a chance to vote for or against the removal of the industry’s constitutional tax rate on the 2014 ballot.

The industry is one of several specifically mentioned under a special provision in the constitution.

Removing the constitutional tax rate gives the Legislature the authority to tax mining in a manner it sees fit.

“At this point, I just think it’s a no-brainer to bring control of taxation back to the Legislature,” said Sen. Greg Brower, R-Reno, who voted against the resolution in 2011 but now supports its passage this year.

Many people who support the resolution’s passage also say they support a subsequent increase in the taxes that the mining industry pays.

That would either happen via a mining tax measure some Senate Republicans hope will qualify for the 2014 ballot or through tax legislation during the 2015 legislative session.

“SJR15 is not about taxes, not yet anyway,” said Michael Ginsburg of the Progressive Leadership Alliance of Southern Nevada. “I do hope to be sitting before you in two years for additional taxes on the mining industry.”

Mining lobbyists argued that removing the industry’s constitutional cap, which was amended in 1989, could actually give the industry a tax cut.

Regardless of that possibility, contemplating the removal of the current tax structure creates an uncertain business climate, said Jim Wadhams, lobbyist for Newmont Mining Corp.

Finding little to no popular, public support, Wadhams presented several legal and constitutional scenarios that would complicate the removal of the industry’s constitutional tax rate.

At one point presenting Brower with a six-pound rock containing approximately “26 cents of gold,” Wadhams explained the expenses incurred in extracting a valuable mineral from rock and said the industry pays its fair share.

He encouraged legislators to look at legal and constitutional arguments as hundreds of people in support of a higher mining tax watched the legislative hearing.

For one, states and counties currently share mining tax collections in a split defined under the state’s constitution. Removing that split could hurt state or local property tax collections in a way that the resolution’s supporters have not fully considered, Wadhams said.

“Things that people say do not become true merely because they are repeated loudly and frequently,” he said.

The frequency of such arguments has indeed been on the uptick.

Former Senate Majority Leader and current Rep. Steven Horsford, D-Nev., and former state Sen. Sheila Leslie, D-Reno, led the charge for passing the mining resolution during the 2011 legislative session.

It squeaked through during the last few days of the legislative session after Horsford pushed for its passage in the state Assembly.

Now Republicans, like Brower, Roberson and Sen. Ben Kieckhefer, R-Reno, are the ones aggressively pushing for the resolution’s passage.

Senate Democrats also released a statement Tuesday supporting the resolution and the removal of the mining industry’s constitutional tax rate.