Nevada mining lobby talks with Gibbons about budget problems

CARSON CITY -- The Nevada Mining Association is in talks with Gov. Jim Gibbons on helping to plug the state's $880 million budget shortfall, administration officials said Thursday.

Gibbons met with association leaders, and "they're working on what they can do," Deputy Chief of Staff Lynn Hettrick said.

Hettrick said no firm numbers were discussed, but it could mean "millions and millions" for the state.

"We don't know how it would be structured," Hettrick said. "We're working on that. Every day there's a little more light."

Gibbons this week released a list of proposed budget cuts that would save about $418 million over the biennium that ends June 30, 2011. But that's less than half of the projected revenue shortfall, meaning deeper cuts or more revenues are needed. By law, the budget must be balanced.

The Republican governor, who has taken a hard stance on new taxes and fees, acknowledged talks with mining interests have been ongoing.

"I think they realize the severity of the situation," Gibbons said. "The mining industry has stepped up to the plate."

Gibbons said some suggestions include prepaying sales taxes for a temporary but quick infusion of money and adjusting royalty calculations.

Tim Crowley, president of the Nevada Mining Association, did not immediately respond to telephone or e-mail messages seeking comment.

Nevada's mining industry has been targeted by a coalition of conservationists, labor leaders and others who claim it doesn't pay its fair share despite being the nation's largest gold producer.

They launched a petition initiative last month seeking to require mining companies to pay taxes on a minimum 5 percent of their gross proceeds. The current tax is limited to a maximum of 5 percent on net proceeds before most expenses are deducted.

Backers of the proposal claim if the measure had been in place in 2008, the industry would have paid an estimated $284 million in taxes on $5.7 billion worth of mineral production to state and county governments, more than triple the amount paid.

Nevada is the fourth largest gold producer in the world, behind South Africa, Australia and China.