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Mining industry the good kids on the budget-balancing block

CARSON CITY

Mining was the first to succumb and agree to reduce the budget deficit by $100 million, making the industry’s cooperation official during a Senate hearing Friday.

But gaming and business said they weren’t volunteering to pay anything. Now mining is looking like the well-behaved kid and gaming and business are the recalcitrant brats, just asking to be spanked.

Mining agreed to a combination of payments to raise $100 million for the state’s general fund.

First, the industry agreed to pre-pay taxes to the tune of about $20 million. That’s poor public policy because it just postpones the problem, but legislators here are scrambling for dollars rather than designing thoughtful policy on Day Four of the special legislative session to balance the state’s budget.

Mining also agreed to pay increased filing claim fees, raising roughly $20 million. Plus the industry expects to submit net proceeds taxes of about $58 million on Monday (money that would have gone to the general fund anyway).

Yet mining looks generous in that the number the news media will use is $100 million, even though only about $20 million is new money . The exact numbers are still fluid.

The Nevada Resort Association publicly rejected a legislative proposal to increase investigation fees, raising $32.5 million a year. (The equivalent of 800 teachers, noted Senate Majority Leader Steven Horsford.)

Now gaming and business have bull’s-eyes on their backs and the mining industry is looking angelic. What a difference a day makes. Of course, an initiative by the Progressive Leadership Alliance of Nevada to force mining to pay more in taxes may have been just the poke the mining industry needed.

Gaming will end up paying what legislators demand, just not by choice. Yet the industry didn’t generate any goodwill and probably inflamed the public, which believes gaming should pay more, even if it pays for 47 percent of the state’s general fund in gaming, sales and property taxes.

However, gaming and business have one thing going for them. Gov. Jim Gibbons said he won’t approve any increases unless the targeted industries support them. Gaming couldn’t make its opposition any clearer. "We just can’t help," said gaming lobbyist Billy Vassiliadis.

Gaming’s support for Assembly Speaker Barbara Buckley’s fee increase idea was squishy at best. She wanted to, at the minimum, find money to prevent personnel cuts in the Gaming Control Board so regulators don’t have to eliminate 31 jobs.

Then she proposed charging higher fees for gaming investigations so regulators would be funded more by fees and less by the general fund.

Right now the control board charges $80 an hour for suitability investigations. One idea is to charge as much as $400 an hour as the top fee but have lower, graduated fees for smaller operations.

Rural casinos objected, saying they’re already struggling to survive.

There’s a precedent to requiring the gaming industry to pay for regulation costs. The insurance industry and mortgage lending industry already pay for their regulation. New Jersey, Pennsylvania and Colorado are all entirely fee-based gaming regulators, Board Chairman Dennis Neilander said.

New Jersey has 10 casinos to regulate with a staff of 800 people; while Nevada has 2,700 gaming licensees of all sizes to regulate with a staff of 400.

Calling Nevada’s gaming regulation system "the gold standard," Buckley said, "We can’t allow the Gaming Control Board to be decimated."

Throughout this special session, Horsford has repeated that mining, gaming and "other interests" must come to the table to balance the state’s budget.

On Day Four , only mining stayed at that table. However, it’s uncertain if Gibbons will approve that negotiated plan, so maybe $100 million worth of good will come to nothing in the end.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call (702) 383-0275. She also blogs at lvrj.com/blogs/morrison.

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