Question 2: Golden tool for Nevada legislators

CARSON CITY — Nevada voters will decide next month whether to give lawmakers the power to raise mining taxes — a revenue source long decried by critics as an under-tapped funding spigot shielded by the state constitution.

Whether or not passage of Question 2 will lead to more taxes on gold, silver and other minerals remains to be seen. But if history is any indication, lawmakers will seek to capitalize on the new tool in the budget box, should the measure pass, and again turn their eye toward all that glitters to boost state coffers.

State Sen. Tick Segerblom concedes that raising mining levies is the ultimate goal.

“It’s the first time in 150 years that the Legislature will actually have a chance to raise taxes on mining,” said the Las Vegas Democrat. “That is, in my perspective, incredibly significant.

“We’ve finally gotten rid of that stone around our neck.”

Question 2 is the last step in a process that began three years ago to purge a cap on net mining proceeds from the constitution.

Backers argue the industry has enjoyed special tax treatment since Nevada’s admittance to statehood in 1864. Mines pay a net proceeds tax, a figure calculated after costs of extraction and other expenses are deducted. A constitutional amendment approved in 1989 capped the tax on minerals at 5 percent.

Approval of Question 2 would allow legislators who meet every two years to adjust mining levies as an excise tax.

“After 150 years of mining running the store, their time is up,” said Bob Fulkerson, executive director of Progressive Leadership Alliance of Nevada, a liberal advocacy group that has led the charge to change the constitution.

“Voters are ready to tell mining it’s time to step up.”

The mining industry counters that it pays the same taxes as other businesses as well as the industry-specific net proceeds tax, and to suggest it is somehow shielded from taxes is a fallacy.

It also argues that altering the constitution should not be taken lightly and that lawmakers have the ability to raise taxes on the industry without tinkering with the constitution.

“If the Legislature wants to increase taxes on mining, they can currently,” said James Wadhams, a lawyer and lobbyist for the industry.

A FREQUENT TARGET

Nevada is the largest gold producer in the United States, and while the net proceeds tax is levied on all mining — from clay and lithium to oil and gas — it’s the big gold producers such as Newmont Mining and Barrick Gold Corp. that are frequent targets when Nevada lawmakers go panning for dollars.

As Nevada’s economy crumbled during the Great Recession, lawmakers meeting in a 2010 special legislative session enacted a tiered tax on mining claims, based on the number of claims held, that was designed to help plug an $800 million budget hole.

But a state judge in 2011 ruled that the fees amounted to an unconstitutional tax and the state refunded more than $8 million. That same year, mining companies were forced to give up some tax deductions.

While Nevada’s economy has been improving since then, the budget outlook is far from sunny.

State agencies have submitted general funding spending requests to Gov. Brian Sandoval totaling $7.7 billion for the upcoming two-year budget cycle, about $1 billion more than current spending levels approved by the 2013 Legislature.

Additionally, the Republican governor expected to easily win re-election has said increased funding for public schools will be a priority. Nevada also faces about $500 million in higher costs for growing Medicaid caseloads that are expected to approach a half-million people by the end of the 2017 budget year, officials have projected.

Mining, though the dominant industry in northern rural counties, accounts for only a small portion of state general fund revenues — between 3 percent and 4 percent. In contrast, sales taxes make up 31 percent of state revenues, followed by casino taxes at 23 percent.

According to the Nevada Department of Taxation, 34 gold and silver operators in Nevada had gross proceeds of $8.1 billion last year. After deductions, the net proceeds were calculated at $3.2 billion on which $74 million was paid to the state general fund; another $83.5 million went to counties where the mines are located.

When deductions exceed gross proceeds, no taxes are collected, a fact that irks former state Sen. Sheila Leslie, a primary backer of the move to remove mining taxation from the constitution during the 2011 legislative session.

“First and foremost, I think they should pay something. The general public needs to understand that many mines don’t pay anything,” Leslie said. “For me, it’s not so much the amount, it’s the type of tax and to ensure that there’s no way that they can deduct their cost of business so they pay nothing.”

MINING TAX HIKE NOT A GIVEN

Even if Question 2 is approved at the ballot box, raising mining taxes is not a given.

“All this does is allows the Legislature to consider increased mining taxes. Raising them will be a much tougher fight,” said Eric Herzik, political scientist at the University of Nevada, Reno.

“There will probably be proposals for raising the mining tax. That part wouldn’t surprise me. But, depending how this election comes out … if Republicans control the Senate and if Gov. Sandoval’s not onboard, then it goes nowhere,” Herzik said.

Raising taxes during the session also would require a two-thirds supermajority vote in both the Assembly and Senate, a formidable hurdle.

Sandoval opposes Question 2 and will vote no, said his campaign spokesman, Jeremy Hughes.

Democrats hold a razor-thin 11-10 majority in the Senate, but three key races could flip control to the GOP for the first time since 2008. No matter the outcome, neither party will emerge with the 14-senator majority needed to impose taxes or override a governor’s veto.

Still, a proposal floated last year by six Republican senators to raise mining taxes to 10 percent left industry executives jittery. Republicans traditionally had been friendly to mining, and the proposal by Senate Minority Leader Michael Roberson, R-Las Vegas, caught many off guard.

Roberson and others who backed the failed move, including Republican lieutenant governor candidate Mark Hutchison, have said the mining tax proposal was conceived as an alternative to try to defeat a business margins tax that is also on this year’s ballot as the Education Initiative.

But Roberson, as a freshman lawmaker in 2011, showed he would not be a partisan guardian of the industry when he grilled mining lobbyists about profits. He recounted growing up in a small mining town in Kansas, where he witnessed the environmental aftereffects after minerals were depleted and the mining company pulled up stakes.

He said at the time that he was not anti-mining but questioned whether the industry should pay more. Two years later, he locked horns with mining officials during a legislative hearing over whether they would sue if the ballot measure passed.

Roberson voted in favor of Senate Joint Resolution 15 in the past two legislative sessions, helping to send it to this year’s ballot.

Sandoval, speaking separately with editorial boards at the Las Vegas Review-Journal and Reno Gazette-Journal earlier this month, said restructuring how Nevada funds education and state services would be a priority during his second term.

Though he provided no details, his comments suggested a possible overhaul of Nevada’s tax base that is heavily reliant on discretionary spending and prone to volatile economic swings.

Whether mining taxes will be part of that discussion remains to be seen, but Segerblom said passage of Question 2 would make the industry an equal participant.

“If everybody’s there at the table, then theoretically they can all ante up a little bit and we can come to an agreement,” he said.

ad-high_impact_4
News
VA Southern Nevada Healthcare System hosts Veterans Day Car Show and BBQ
The 4th Annual Veterans Day Car Show and BBQ is held in celebration of Veterans Day at the VA Southern Nevada Healthcare System Medical Center in North Las Vegas, Saturday, Nov. 10, 2018. (Caroline Brehman/Las Vegas Review-Journal)
Wildfires in Southern California
Wildfires hit Ventura County, Calif., on Nov. 9, 2018. (Richard Brian/Las Vegas Review-Journal)
Dedication of Nevada's Battle Born memorial
The state of Nevada on Friday dedicated its Battle Born memorial honoring 895 state residents who have died in America’s wars.
Las Vegas police and Sunrise Children's Hospital hope to prevent infant deaths
The Metropolitan Police Department and Sunrise Children's Hospital held a press conference to get the message out on preventable infant deaths attributed to "co-sleeping" and other unsafe sleeping habits. (K.M. Cannon/Las Vegas Review-Journal)
No serious injuries after car hits tree in south Las Vegas
One person reported minor injuries but wasn’t hospitalized after a Wednesday morning crash in the south valley.
Nellis Air Force Base keeps airmen fed
Nellis Air Force Bass airmen have delicious and healthy food items, and a variety of dining facilities to choose from. (K.M. Cannon/Las Vegas Review-Journal)
Suspicious package found at central Las Vegas post office
Las Vegas police determined that a suspicious package found Monday morning at a central valley post office was not a threat.
Suspicious package found at central Las Vegas post office
Police evacuated the area around the Garside Station post office early Monday morning near Oakey and Decatur boulevards.
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
With husband's passing, family in limbo for workers' comp claim
Meredith Tracy's husand, Russell Tracy, died more than a year ago on his first day working for a new company when he fell 22 feet into a manhole that was not properly safeguarded. His employer was fined $82,000 in penalties for unsafe practices, but the company has denied her workers' compensation claim, leaving her with no compensation since the death. Rachel Aston Las Vegas Review-Journal @rookie__rae
Las Vegas family shares flu warning
Carlo and Brenda Occhipinti lost their son, Carlo Jr., or “Junior,” to the flu last year.
Author Randall Cannon shares an anecdote about Stadust Raceway
Author Randall Cannon shares an anecdote about Dan Blocker, who played Hoss Cartwright on the TV show "Bonanza," and the actor's passion for auto racing at Stardust International Raceway in Las Vegas during the 1960s. (Ron Kantowski/Las Vegas Review-Journal.)
Project Neon 85 percent complete
On Wednesday morning Oct. 31, Interstate 15 northbound lane restrictions were removed opening up Exit 41 to Charleston Blvd. On Thursday Nov. 1, Interstate 15 southbound lane restrictions were removed. The new southbound off-ramp to Sahara Ave. and Highland Dr. also opened Thursday, November 1. With Project Neon 85% finished the flow of traffic on Interstate 15 has substantially diminished. (Michael Quine/Las Vegas Review-Journal)
Girl killed after jumping from bridge onto 215 Beltway in Henderson
Eastbound lanes of the 215 Beltway are shut down by the Nevada Highway Patrol after a female juvenile jumped from the 215 overpass at Stephanie and was struck by a FedEx tractor trailer. Michael Quine/Las Vegas Review-Journal @Vegas88s
Kristallnacht story
An interview with 94-year-old Holocaust survivor Alexander Kuechel who survived seven concentration camps and didn’t leave Germany until after World War II was over. (Mia Sims/Las Vegas Review-Journal)
1 dead in central Las Vegas crash
An early Wednesday morning crash left at least one person dead and another injured. The crash was reported just around 3 a.m. at the intersection of Flamingo Road and Swenson Street. At least two vehicles were involved in the crash, one of which caught fire. Debris was scattered across the intersection as police combed the area as they investigated the scene. Flamingo is blocked in both directions between Swenson and Cambridge Street. Northbound Swenson is blocked at the intersection.
Richard Knoeppel named the 2018 Nevada Teacher of the Year
Richard Knoeppel, an architecture design instructor at the Advanced technologies Academy, named the 2018 Nevada Teacher of the Year on Monday, Oct. 29, 2018. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Mojave Poppy Bees
(Zach Portman/University of Minnesota Department of Entomology) Male Mojave poppy bees exhibit territorial fighting behavior. The Center for Biological Diversity wants the bee, found only in Clark County, to be added to the endangered species list.
Clark County Schools announce random searches
Clark County School District middle and high school students will be subject to random searches for weapons under a new initiative to combat the wave of guns found on campus. (Amelia Pak-Harvey/Las Vegas Review-Journal)
Ron Jeremy and Heidi Fleiss React to Dennis Hof's Death
Ron Jeremy and Heidi Fleiss speak about their friend and prominent brothel owner Dennis Hof's death at Dennis Hof's Love Ranch. (Benjamin Hager/Las Vegas Review-Journal)
Nevada brothel owner Dennis Hof has died
Nevada brothel owner and Republican candidate for Nevada State Assembly District 36, Dennis Hof has died. He was 72. Nye County Sherriff's office confirmed. Hof owned Love Ranch brothel, located in Crystal, Nevada.
Las Vegas police investigate suspicious package at shopping center
Las Vegas police evacuated a southeast valley shopping center at Flamingo and Sandhill roads early Tuesday morning while they investigated reports of a suspicious package. (Max Michor/Las Vegas Review-Journal)
The Las Vegas Metro hosts the K-9 Trials
The Las Vegas Metro K-9 Trials returns to the Orleans Arena to benefit the Friends For Las Vegas Police K-9 group.
Kingman residents love their little town
Residents of Kingman, Ariz. talk about how they ended up living in the Route 66 town, and what they love about their quiet community. (K.M. Cannon/Las Vegas Review-Journal)
Service at Southern Nevada Veterans Memorial Cemetery
Twelve unclaimed veterans are honored at Southern Nevada Veterans Memorial Cemetery in Boulder City in Oct. 9, 2018. (Briana Erickson/Las Vegas Review-Journal)
Las Vegas house prices reach highest level in 11 years
Las Vegas house prices are rising But so is the amount of available homes on the market Still, properties priced below $300,000 are selling fast And September was the first time since June 2007 that the median house price reached the $300,000 mark Las Vegas home prices have been rising at one of the fastest rates in the country over the past year Recent data show the market is now less affordable than the national average
National Night Out
About 100 Summerlin residents gathered at Park Centre Dr. in Summerlin on Tuesday for National Night Out. Lt. Joshua Bitsko with Las Vegas Metro, played with 3-year-old David who was dressed as a police officer. Face painting, fire truck tours and more kept kids busy as parents roamed behind them. (Mia Sims/Las Vegas Review-Journal)
Rural homeless issue comes to a head in Pahrump
On Sept. 12, Pahrump sheriff deputies told residents of a homeless encampment on private property that they had 15 minutes to vacate and grab their belongings. That decision might face some legal consequences. (Rachel Aston/Las Vegas Review-Journal)
Remembrance blood drive on October 1
A blood drive was held at the Las Vegas Convention Center on the one year anniversary of the Oct. 1 shooting. (Mat Luschek/Las Vegas Review-Journal)
Remembrance Lights memorial unveiled at St. Rose hospital
A dedication ceremony was held at St. Rose to unveil a memorial and to read the names of those who died on October 1, a year ago. (Mat Luschek/Las Vegas Review-Journal)
Local
Poet’s Walk Henderson introduces storytelling
Residents enjoy a storytelling activity.
Downtown Summerlin hosts its annual Festival of Arts
People crowd to Downtown Summerlin for the 23rd annual Summerlin Festival of Arts in Las Vegas, Sunday, Oct. 14, 2018. (Caroline Brehman/Las Vegas Review-Journal)
Clark County educators debate alternative grading systems
Spring Valley High School principal Tam Larnerd, Spring Valley High School IB coordinator Tony Gebbia and retired high school teacher Joyce O'Day discuss alternative grading systems. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Grandparents on the fire that killed three family members
Charles and Doris Smith talk about the night an apartment fire took the lives of three of their family members. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
New York artist Bobby Jacobs donated a sculpture to the Las Vegas Healing Garden
Bobby Jacobs, an artist from upstate New York, has spent much of the past year creating a sculpture of two separate angel wings. He donated the sculpture to the Las Vegas Healing Garden. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Weather will cool slightly through the end of the week
The weather will cool slightly through the end of the week., but highs are still expected to be slightly above normal for this year. (Bizuayehu Tesfaye/Las Vegas Review-Journal) @bizutesfaye
Mayor announces new public-private partnership
Mayor Carolyn Goodman announced the creation of the Mayor’s Fund for Las Vegas LIFE, a public-private partnership that will allocate money to the city’s neediest.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Fall fairytale gets cozy at Bellagio Conservatory
Bellagio Conservatory introduces its fall-themed garden titled "Falling Asleep." (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
What the house that Ted Binion died in looks like today
Casino heir Ted Binion died in this Las Vegas home in 1998. Current home owner Jane Popple spent over $600,000 to restore and modernize the home. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Rescue Mission employees terminated
Don James, a former employee for the Las Vegas Rescue Mission, talks about the day his team was terminated. (Erik Verduzco/Las Vegas Review-Journal)
Raiders Cupcakes at Freed's Bakery
Freed's Bakery will have Raiders-themed cupcakes available in store and for order during football season. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
51s fans say goodbye to Cashman Field
Las Vegas 51s fans said goodbye to Cashman Field in Las Vegas, Monday September, 3, 2018. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
51s owner Don Logan's last weekend at Cashman Field
Don Logan, owner of the Las Vegas 51s, gives a tour of Cashman Field before the team's final weekend using the field. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like