Thursday, February 14, 2013

A Valentine's Day Message for Nevada Mining Lobbyists

Ah, Valentine's Day. For many, it's a day of love. But for Nevada, it's a day of heartburn.

But today, politicians in Carson City will be feeling the heartburn for a change. Why? Read this and cringe.

• Trans-national mining conglomerates took $8.76 billion in gold from Nevada in 2011, and paid a total of $104 million to the state general fund under the mining tax, an effective tax rate of 1.187%. In 2010, they mined $6.64 billion in gold, and paid $71.7 million in taxes, an effective tax rate of 1.079%. (Nevada Department of Taxation)

• Mining does pay sales tax and they pay certain property taxes—but not on the value of the mine or their mining claims. Renters, the unemployed, and minimum wage workers also pay sales and property taxes. But gold mining is different, so it should be taxed differently. Once that gold is gone, it’s gone forever. The money will be in Canada and other foreign countries, leaving Nevada with clean up costs and massive pits.

• Three of the five largest mines in Nevada are foreign-owned. The second largest mine in the world, and the most profitable mine in the world, is owned by Barrick corporation, based in Canada. This single mine will exceed $1 billion in profits in 2012, having reaped $500 million in the second quarter and $313 million in the third quarter of 2012 alone.

• Barrick pays next to nothing in taxes on the huge windfall profits from the world’s most profitable gold mine—paying a mere 1% on gross production value in taxes to Nevada’s General Fund in 2010, according to the state’s 2010-11 net proceeds of minerals tax (NPOM) bulletin.

No really, it's that bad. But really, we shouldn't be surprised. After all, we've been following the sordid, sick love affair between this state and the mining industry for some time. It's perhaps the worst kept secret that multinational mining corporations have constantly taken advantage of this state. Yet because they're part of "The Gaming-Mining-Lobbying Industrial Complex" that all too often calls the shots in Carson City, they've been allowed to get away with this legalized robbery.

Yet they're afraid now... And so are their political bed-mates in Carson City. Why? Oh, because a growing number of Nevadans are calling foul on this revolting love affair.

In this week's Reno News & Review, Sheila Leslie calls out the mining industry's greatest fear.

There is no hope of renegotiating how mining is taxed in Nevada unless the special provision protecting the industry is removed from the state’s constitution. While the industry insists the NPOM tax is a property tax, it acts like an income tax, allowing deductions for all sorts of things with the net effect of some mines actually paying zero in NPOM taxes. Zero. Until a few loopholes were closed last session, the mines could even deduct the cost of their dues to the World Gold Council, an industry marketing organization.

Other states tax mining differently, through severance taxes, excise taxes and the like. Mining companies also have to pay a corporate profits tax in every state but South Dakota, Wyoming, and, naturally, Nevada. In other countries, the industry often pays a royalty tax when they mine public lands as a method of compensating the real owners of the gold.

In the 2011 session, the Legislature started the process of removing the sweetheart tax deal from the state constitution by passing Senate Joint Resolution 15. To continue the five-year process of amending the state constitution, SJR 15 must pass again in 2013 and then go to a vote of the people.

It is clear the industry has literally billions of dollars at risk should this resolution pass and has been sparing no expense in campaign contributions, charitable donations, public relations campaigns, and lobbyists gearing up for the battle this session. They know they need to kill it now before the public votes.

A quick review of the lobbyist list last week revealed 24 registered lobbyists for mining, exceeding the number of state senators by three. And the president of the Nevada Mining Association and three other prominent mining lobbyists hadn’t even registered yet. As one seasoned observer noted, “Mining is prepared to spend millions to save billions in taxes.”

In a rare moment of political courage and policy sanity, the Nevada Legislature passed the first round of SJR 15 in 2011. But remember, a constitutional amendment that originates in the Legislature must pass in two consecutive sessions before going to a vote of the people in the next general election. That's why mining industry lobbyists are now fighting furiously to protect their corrupt sweetheart deal in Carson City. They're whispering sweet nothings in legislators' ears and vowing to "make it rain" (in campaign contributions) on legislators who return into the arms (and the tight grip) of the mining industry.

And this is why PLAN will be making a special visit to the Legislature today. They'll be asking for Nevada to finally seek a divorce from the political control of the mining industry. After all, what good has this marriage of political convenience been for the people of this state?

Much is being said about tax reform this session. But yet again, legislative leaders, corporate lobbyists, and high perched media pundits have arbitrarily declared that the only "reform" that's allowed is "reform" that's "revenue-neutral" and incredibly unfair to Nevada's working families. But unfortunately for this sorry bunch, Nevada's working families have had enough of this nonsense. They're ready to stand up and fight back.

It's time for Nevada's legislators to get serious on real tax reform. They already passed SJR 15 in 2011. It's time for them to pass it again so that we the people can have a say on this next year. Their love affair with mining industry lobbyists just isn't working for our state. It's time for them to divorce so we can begin fixing this state.

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