If voters approve Question 2 on this fall’s ballot, they will not increase taxes on Nevada’s mining industry. Passage of Question 2 would remove the Nevada Constitution’s caps on mining taxes and allow the Legislature, or voters through the initiative process, to change the industry’s tax rates.
The state’s net proceeds of minerals tax is locked into the constitution at 5 percent, but companies are allowed to deduct the cost of extracting and processing minerals. This results in relatively low tax bills for an industry that removes billions of dollars worth of minerals from the state. In fiscal year 2012-13, for example, the state collected $236 million off more than $9 billion in gold.
Yes, the mining industry pays thousands of workers an average annual salary of about $88,000. And, yes, the industry’s overall tax bill is also high on a per-employee basis — about $33,000. But the value of the state’s mineral reserves should be better reflected in the state’s general fund, and the inability of lawmakers to change the mining industry’s tax rate has, over the years, forced them to unfairly burden residents and other businesses with more and higher taxes.
If lawmakers can change the gaming tax rate, which affects Nevada’s No. 1 industry, they should be able to change the net proceeds of minerals tax rate as well.
If Question 2 passes, raising the mining tax would require two-thirds support in both houses of the Legislature, the same threshold needed to create or increase any other tax. That, by itself, is a reasonable check against punitive taxation that could put mining operations and jobs at risk.
The Review-Journal endorses a yes vote on Question 2.
▶ ON THE WEB: For a complete list of the Review-Journal editorial board’s 2014 election endorsements, go to www.reviewjournal.com/endorsements. A complete list of candidate endorsements will be published Friday and Nov. 2.