It’s no secret Republicans were gearing up to oppose the 2 percent margins tax proposed by the Nevada State Education Association’s initiative. But instead of simply voting no, some members of the Senate Republican caucus are preparing to do something remarkable: support an increase in the state’s mining taxes instead.
“We believe the current discussion relating to broadening the tax base and finding more money for education is important,” said state Senate Minority Leader Michael Roberson in a statement released this morning. “We are proposing that we can give voters a choice about how we generate more revenue to fund education in our state.”
The caucus is calling on Democrats to support Senate Joint Resolution 15, a proposed constitutional amendment that would remove language capping the net proceeds of mining taxes at 5 percent. Instead, mining could be taxed on its gross proceeds, with a severance tax or in other ways, state Sen. Ben Kieckhefer, R-Reno, said in the statement.
The Republican release sounds at times almost like a statement from the Progressive Leadership Alliance of Nevada, detailing mining’s $8.8 billion in gross revenue in 2011, and $203 million in state and local taxes paid (that’s 2.3 percent of gross revenues). By contrast, the gambling industry paid 6.6 percent, or $694 million on $10.8 billion in gross revenues.
According to the Republicans, if the net proceeds tax was doubled to 10 percent, Nevada would get $630 million more over the biennium (assuming gold prices stay current and production continues apace; they’ve been falling slowly as the overall economy improves). By the way, that’s more than twice what Democrats last week said needed to be spent on education.
If gold mines were subjected to the 6.75 percent tax on gross receipts, the same tax as casinos, the state would get $780 million over the biennium, again, assuming prices and production remain high.
“We value the industry’s positive impact on Nevada’s economy and our communities, and we want the mining industry to be productive and profitable,” Roberson said in the statement. “However, mining is different from every other industry in this state. Billions of dollars of nonrenewable natural resources are extracted from our state and shipped out of state every year. These resources cannot be replenished. At some point, the gold will be gone. And, when the gold is gone, mining will be gone. It is imperative that we ensure that Nevadans get the best deal we can, while we can.”
That quote is truly amazing, not just because it comes from the Republican minority leader, but because it could also have come from PLAN’s Bob Fulkerson, one of mining’s biggest critics in the state. And some Democrats have whispered about flagging support for SJR 15 — Roberson is actually staking out territory to their left!
The Republican statement also acknowledges the intense job mining lobbyists have done to try to persuade lawmakers to kill SRJ 15 during the 18 months the Legislature has been out of session. That includes the ridiculous argument that removing the tax cap will actually lower mining taxes. (And the industry would be against that because…?)
“We are persuaded by an opinion from the legal division of the Legislative Counsel Bureau, which provides that passage of SRJ 15 will maintain the current tax structure with regard to the mining industry,” said state Sen. Dr. Joe Hardy, R-Boulder City. “Moreover, the Legislature and the people will be empowered to adjust the manner and level at which mining is taxed. We urge our Democratic colleagues to allow SRJ 15 to be voted upon and sent to the people for their consideration, along with an alternative to the margins tax that specifically addresses the taxation of mining.”
Please, Democrats, let us vote on some taxes! If I’d told you last week that Republicans would be asking that question, you’d have probably thought I had accidentally posted a script for the comedy show Third House on the blog instead of actual news!
Since the teachers margins tax initiative will likely be rejected by the Legislature, it will appear on the November 2014 ballot. Republicans want SJR 15 and a mining tax measure to appear there as well, as an alternative to the business levy, which they hate. (Roberson in the statement called it “…a fatally flawed, job-killing taxes on businesses large and small that will stall economic development, put employers out of business and lead to even higher numbers of unemployed Nevadans.”)
Democrats, of course, have an incredible opportunity here: Mining tax reform has long been part of their agenda, so embracing the Republican push for raising the mining tax is a natural for them. But the 2014 campaign will also present them a chance to campaign on the margins tax, too. A reasonable question for them — and for the voters — is this:
Hey, why can’t we tax both mining and business?
UPDATE: Sadly, the Sebelius have-your-cake-and-eat-it-too plan isn’t possible, as Republicans intend their alternative tax plan to be placed on the ballot as a competing measure to the teachers union business tax. As a result, whichever ballot question gets the most votes (assuming they both get a majority) wins. So it’s either a business tax or a mining tax, unless voters were to approve the business tax, reject the mining tax alternative but support SRJ 15, thus repealing the mining industry’s tax cap. That would enable the Legislature in 2015 to impose a higher mining tax, and have a business tax, too.