Signatures lacking on mining tax effort

Nevada voters won't get the chance to decide whether the state's booming mining industry should pay higher taxes.

On Monday, the Progressive Leadership Alliance of Nevada, or PLAN, said it wouldn't meet today's deadline to provide the 97,002 signatures from registered voters needed to place the mining tax initiative on the November ballot.

The announcement means that despite poll results showing voters are open to the idea of increasing mining taxes, they won't get a chance to prove it at the ballot box.

"We were fighting perhaps the most formidable foe in Nevada: multinational mining corporations worth tens of billions of dollars," PLAN executive director Bob Fulkerson wrote in an e-mail to supporters.

Tim Crowley, president of the Nevada Mining Association, hailed the news that PLAN wouldn't get the signatures needed to qualify an initiative.

"While we are pleased that Nevadans have chosen not to support this highly-flawed initiative, we will continue to work with our leaders and business community to find long-lasting, broad-based solutions that establish a course for future success and economic prosperity," Crowley said in a written statement.

The initiative, called the Nevada Fair Mining Tax Initiative, sought to address the state's long-term finances by changing the "net proceeds of minerals" tax, a system that has been part of the state's constitution since 1865.

If the initiative were to pass it would change the state constitution by replacing the word "net" with "gross," which would prevent mining operators from deducting expenses before calculating the tax they owe on the value of minerals they extract. The petition also seeks to change the description of the tax rate from "not to exceed" to "not less than" 5 percent.

PLAN says proceeds from gold totaled $25.5 billion from 2000 to 2007. Mining companies paid $125.3 million in taxes to the general fund, for a rate of one-half of 1 percent. In contrast, PLAN says the poorest 20 percent of Nevadans pay 8.3 percent of their income in taxes.

PLAN says such a change could generate hundreds of millions of dollars annually that could be used to support schools and other social services.

Mining industry leaders say it represents a 300 percent tax increase that unfairly targets one type of business and would put miners out of work.

According to the Nevada Mining Association, mining companies in 2007 paid $123 million in taxes on top of the industry-specific net proceeds tax.

With gold trading at more than $1,000 an ounce, Crowley has said the industry is unfairly and inaccurately seen as a potential savior for the state's budget woes.

The petition could have also raised taxes on geothermal energy producers, an outcome considered undesirable across the entire political spectrum.

Geothermal energy is covered under the same tax laws as mining.

The mining association had been fighting the initiative in court, with varying degrees of success. In March, Carson City District Judge James Wilson ruled the petition would need re-working and that the 12,000 signatures collected by PLAN were invalid.

The ruling sent PLAN back to the streets to gather more signatures but didn't kill the petition drive outright, as the mining association had hoped.

The mining tax was popular enough with voters that it had a decent chance of passing had PLAN been able to get it on the ballot. Had it gotten to the 2010 ballot and passed, voters would have needed to approve it again in 2012 to make it an amendment to the state's constitution. The measure then wouldn't have gone into effect until 2013.

An April poll by Mason-Dixon Polling & Research showed 40 percent of likely voters supported and 37 percent opposed such a change. Twenty-three percent were undecided.

But the strength of the mining association deterred donors from contributing money to the cause, which meant PLAN had to rely on volunteers to do the work on their own.

Although they managed to collect an estimated 66,000 signatures, the volunteer force simply ran out of time.

Ronni Council, a Democratic strategist who wasn't involved in the petition drive but has worked on other ballot initiatives, said PLAN had little chance to succeed without the funds to hire professional signature-gatherers.

"You have to find a way to get to voters, and it is a strenuous job," Council said. "Asking someone to walk six hours, five days a week door-to-door isn't an easy thing to do. This needed to be a full-time effort."

Fundraising was difficult, however, with the Nevada Mining Association as a powerful opponent. The association has one lobbyist for every three legislators in Carson City and an influential lobbying firm, R&R Partners.

All major candidates for governor -- Democrat Rory Reid as well as Republicans Brian Sandoval, Gov. Jim Gibbons and former North Las Vegas mayor Mike Montandon -- opposed the proposal, as did Sen. Harry Reid, D-Nev.

Michael Ginsburg, Southern Nevada coordinator for PLAN, said the opposition made it hard to raise money from traditional donors.

"Certainly we would have loved to have money pouring in," Ginsburg said. "We asked and we went to a number of donors both in the state and around the country. We were never able to pull it off."

In his e-mail to supporters, Fulkerson vowed to keep pressuring the mining industry at the 2011 Legislature, when the state could be facing a biennial budget that is $3 billion in the red. Lawmakers will be looking for solutions to balance revenue and expenses with as few cuts to programs as possible.

"Let's use the army we have trained and the public awareness and indignation we have generated to retool, rebuild and come out fighting harder than ever before," Fulkerson said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.