Nev. Senate GOP targets mining as tax alternative
CARSON CITY, Nev. (AP) — Nevada Senate Republicans opposing a plan to tax businesses in an effort to raise hundreds of millions of dollars a year for education pitched a new strategy Tuesday, saying that if mining companies paid more it could avert the proposal they consider a job killer.
The surprise announcement came the same day Assembly and Senate taxation committees held a joint hearing on IP1, the initiative backed by the Nevada State Education Association and other labor groups. Supporters say it would raise $800 million a year for K-12 education.
Gary Peck, executive director of the NSEA, told lawmakers the petition was signed by more than 150,000 people and urged lawmakers to support it.
"We hope that there will not be a caucus of no," said Peck, urging legislators not to get mired in the "same old arguments that have led this state into a ditch and our K-12 education system into a ditch."
But Republicans say the plan to impose a 2 percent tax on businesses taking in more than $1 million a year would harm Nevada's economy. The plan will go before voters for approval or rejection next year.
Some Democrats chastised business groups who spoke against the initiative during the joint hearing for seemingly opposing taxes at every turn over the years.
"When you come to the table, don't come with just, 'no, no, no,'" said Majority Leader William Horne, D-Las Vegas. "I want to hear some options."
Assemblywoman Peggy Pierce, D-Las Vegas, was more direct.
"You guys haven't liked anything in the quarter of a century I've lived in this state," she said, adding that should the margins tax become law in January 2015, "you'll have nobody to blame but yourselves because all you ever say is no."
Mining was not mentioned during the hearing on the teachers' tax initiative.
While announcing the Senate Republicans tactic to seek more money from mining, Senate Minority Leader Michael Roberson, R-Henderson, acknowledged the industry has a "positive impact on Nevada's economy and our communities.
"However, mining is different from every other industry in this state," he said.
Roberson said billions of dollars of nonrenewable resources are extracted from Nevada every year, and "at some point the gold will be gone."
"It is imperative that we ensure that Nevadans get the best deal we can, while we can," Roberson said.
Tim Crowley, president of the Nevada Mining Association, said the plan was imprudent and didn't address the state's real problems.
He said the industry has always partnered with Nevada "to help craft fair tax policy that reflects the needs of the state."
"We remain committed to participate in a discussion leading to long-term solutions to the state's revenues shortfall," Crowley said in an email to The Associated Press. "The focus on any single industry is short-sighed and misses the larger need to broaden Nevada's tax base."
Bob Fulkerson, executive director of Progressive Leadership Alliance of Nevada that has spearheaded efforts to change the state's mining tax laws called the Senate Republicans' position a "game changer."
"I think it's fantastic," he said.
Legislators can offer an alternative measure to appear on the same ballot as the business tax plan, and a proposal to tax mining appears to be the GOP's solution, at least in the Senate. "We are proposing that we give voters a choice about how we generate more revenue to fund education in our state," Roberson said.
Some rural GOP lawmakers, however, were angered by the boldness of their Senate counterparts.
"The Senate Republicans shouldn't be stabbing the rurals in the back," said an irate Assemblyman Ira Hansen, whose sprawling district includes five rural counties and parts of two others. "It's a classic example of taxing something that's not in your area, you don't pay the tax, but you get to spend it all."
Nevada is the largest gold producer in the U.S. In 2011, according to Senate Republicans, the industry produced about $8.8 billion in gross revenue. Of that, $97 million was paid to the state's general fund in net proceeds, and $106 million went to local governments in net proceeds. Combined, the amounts totaled about 2.3 percent of gross revenues.
In contrast, the state's other leading industry — casinos — had $10.8 billion in revenues and paid $694 million in taxes, for a statewide average of 6.6 percent.
Nevada's largest casinos pay a tax rate of 6.75 percent. If the same rate was applied to gross receipts on mining, Senate Republicans said the state could expect an additional $780 million per biennium.
Associated Press writer Matt Woolbright contributed to this report.