Our state director Bob Fulkerson on how SJR15 came to be.
We at PLAN have been asked several times about what changed between 2010 and now that turned the tide against mining’s stranglehold on Nevada. Here’s some thoughts:
In 2009, PLAN tried to get some measly deductions removed from the industry but we were shut down handily. In 2010, we launched the Nevada Fair Mining Tax initiative that would have changed the constitutional cap from 5% net to 5% gross. But mining mounted a vigorous legal challenge, and ran out the clock before we could get enough signatures.
Meanwhile, the state is in the midst of a devastating recession, cutting $1 billion from education alone over a 5-year period. People saw mining and the rurals doing incredibly well. They wondered why the Legislature wouldn’t enact a tax higher than the 1 percent mining tax it paid to the general fund. And the answer was because mining was protected in the Nevada constitution. This concerned people in Clark County, who knew that whether the Strip boomed or lost money, schools in Elko and other mining towns would be funded by their dollars. Yet when mining did well (this year, mineral production exceeded $10 billion in Nevada), Clark County didn’t see many mining dollars at all.
In the 2011 session, Senate Revenue Chair Sheila Leslie and Majority Leader Steven Horsford held hearings on mining taxation. What came to light was the laundry list of deductions, coupled with the fact that the mining companies had rarely, if ever, been audited by the state. The fall guy was the head of Nevada’s Department of Taxation, who had to resign. The mining lobbyists had gamed the Tax Commission (the lobbyist for Newmont was a former member) by writing in deductions on everything from the dues to the World Gold Council to double dipping health care costs. It took the press and other legislators aback, and mining’s been on its heels ever since.
Finally, mining’s reaction to heightened scrutiny has been arrogant and ill conceived-which never makes you any friends. In 2011, they were neutral on SJR 15. In hearings on the Senate side this year, they were still testifying as neutral. (Although everyone knew this was BS.) But at the hearings in the Assembly, they came with both barrels blazing, threatening lawsuits and reduced funding for the budget. Hubris once again.
People began seeing that mining had run Nevada like a colony since statehood, and became outraged. To show how far the tide had turned, even conservative Republicans who voted against SJR 15 in 2011 launched their own effort in 2013 to tax mining by another $600 million-contingent on passage of SJR 15.
It’s no wonder mining offered a $50 million bribe to the Nevada Legislature to kill SJR 15, in the most outrageous and under-reported story of the session.
We’re encouraged by the strength Legislative leaders have demonstrated under such immense pressure from mining. Next step is to pass this on the November 2014 ballot, then to enact a reasonable severance tax on mineral production to build infrastructure that will last long after the mines are gone.