Group circulates new petition on mining tax


CARSON CITY -- Nevada voters are being asked anew if they want taxes paid by mining companies to be tripled.

Members of the Progressive Leadership Alliance of Nevada began collecting signatures this week on a new petition after the liberal advocacy group's earlier petition was modified by a judge.

"We really don't come across folks who don't think mining should pay more in taxes," said Michael Ginsburg, an organizer who circulated petitions Tuesday in Southern Nevada.

Ginsburg said a Carson City judge's decision Friday to rewrite the description of the petition helped the organization because it tells people that the tax increase would be about 300 percent -- boosting the taxes paid annually by mining to $284.4 million from $91.8 million if the higher rate had been in effect in 2008.

He said people always were telling him the tax should be doubled or tripled, but that information was not on the original petition.

In response to a legal challenge by the Nevada Mining Association, Carson City District Judge James Wilson rewrote the measure's description.

Wilson's changes forced PLAN to throw out 12,000 signatures it already had collected.

The organization on Monday filed the new petition with the secretary of state's office and began collecting signatures again.

PLAN has until June 15 to collect 97,002 valid signatures to place the petition on the November ballot. It must be approved this year and again in 2012 for the higher taxes to go into effect.

Nevada Mining Association President Tim Crowley said residents should think twice about signing the petition, contending that it represents "extinction through taxation" for miners.

He noted that the mining industry pays all taxes that other companies pay, such as sales and property taxes, and that the mining tax is an industry-specific tax that no other companies pay.

"Shutting down mining is not the way to improve the economy," said Crowley, who acknowledged he is talking with lawyers about pursuing additional legal action against the petition.

The petition proposes to tax mining companies on the gross revenue they receive from the sale of gold, silver, copper, molybdenum, other minerals and steam from geothermal wells.

Under the current law -- in effect since Nevada became a state -- mining has been taxed on its net receipts. That means costs for extracting minerals are subtracted before calculating mining's 5 percent tax.

Jan Gilbert, PLAN's legislative lobbyist, does not expect any problem in securing enough signatures to put the matter on the ballot, although her organization now is using only volunteer petition circulators.

"Most people get it," said Gilbert, who tried without success to persuade the Legislature last year to raise mining taxes. "Mining has made a big error in underestimating the public's understanding of the issue. Mining used to be a sacred cow. That is no longer true."

Half of the additional money secured by the tax would go to local governments in counties where most gold and other minerals are found. The remainder would go to the state general fund.

Gilbert is not impressed by Crowley's predictions that mining companies would leave Nevada and move to other states if the mining tax is too high.

"The gold is here," Gilbert said. "Mining will stay here as long as the gold is here."

About 80 percent of all gold produced in the United States comes from Nevada.

Both Gilbert and Ginsburg contend there is overwhelming support for the mining tax increase.

But a poll taken for the Review-Journal in May showed that more respondents opposed a higher mining tax than favored it. Just 41 percent of respondents supported a higher tax, compared with 46 percent who opposed it. The rest were undecided.

Brad Coker, managing partner of Mason-Dixon Polling & Research Inc., the company that conducted the poll, said the recession has made people rethink business taxes.

"People are worried about their jobs and don't want to hurt business more since they might lay off people," he said.

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.

 

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