NV coalition wants tax hike on mining industry

By SCOTT SONNER, Associated Press Writer

RENO, 19 January 2010 (AP) – Conservationists, labor leaders and others launched a petition drive Tuesday to raise taxes on Nevada’s mining industry, claiming it doesn’t pay its fair share as the state faces a budget crisis despite being the nation’s biggest gold producer.

Backers of the proposal say it if had been in place in 2008, the mining industry would have paid an estimated $284 million in taxes on $5.7 billion worth of mineral production to state and county governments — more than triple what they paid.
They said that money would go a long way toward addressing a looming budget shortfall that Republican Gov. Jim Gibbons says could approach $400 million over the next two years without additional cuts in state health and human services, schools and universities.

“We are not opposed to mining. We just know they are making a heck of a lot of money right now,” said Jan Gilbert, a lobbyist and co-founder of the Nevada Progressive Leadership Alliance (PLAN) that also is made up of educators and social activists.

“They need to contribute and they haven’t for a long time,” she said.
The proposal needs more than 97,000 signatures to make the fall ballot. It would amend the state constitution to require mining companies to pay taxes on a minimum 5 percent of their gross proceeds. The current tax is limited to a maximum of 5 percent on net proceeds before most expenses are deducted.

Bob Fulkerson, PLAN’s executive director, said mines actually end up paying taxes on less than 1 percent of the value of the minerals mined in Nevada. In 2008, he said they paid $79 million — about $40 million each to the state and counties.

Nevada’s two-largest gold mines — Barrick Goldstrike Mine and Newmont’s Carlin Trend project — have reported zero taxable values during some years when they have produced gold worth $500 million or more, Fulkerson said.

“We are literally sitting on a gold mine here in Nevada. It is mostly foreign owned and it is clearly under-taxed,” he said Tuesday. “This great wealth is being exploited while so many other needs are ignored.”

Only South Africa, Australia and China produce more gold than Nevada.

Industry officials say that while gold prices are in a boom — above $1,000 an ounce since September — they could bust again. The price hit a low of $255 in April 2001.

Nevada Mining Association President Tim Crowley said the current tax structure is fair for an industry that provides the state 14,000 direct, high-paying jobs and another 51,000 indirect jobs. He said while Nevada’s unemployment rate is about 12 percent, it is closer to 6 percent in counties where mining is prevalent.

“I think study after study has shown industry-specific taxes aren’t wise,” he told the Elko Daily Free Press.

“The best thing is to broaden the tax base, not narrow it,” he said adding that his industry pays nearly $130 million annually in conventional taxes, such as property and sales taxes.

Gilbert said that while the mining industry has to pay sales and property taxes, “so does every other business in the state.”

“They take a nonrenewable resource out of our state forever and it is gone. And they pay in some years next to nothing. It is a fairness issue,” she said.

Voters would have to approve the initiative in 2012 in addition to 2010 in order for the change to take effect in 2013.

While the petition must be signed by 97,002 registered voters by mid-June, Fulkerson said they would try to obtain 125,000 to guard against any names that are found to be ineligible.