Mining’s heritage of help

If, as a state, we can't agree on the solutions to solving Nevada's budget crisis, perhaps we can at least agree our guide to finding them must be based in facts, not hyperbole, not conjecture.

So here are the facts on mining in Nevada:

Nevada's mining industry is not protected from paying taxes by the Nevada Constitution.

In addition to paying every tax all other state businesses pay, mining companies pay a 5 percent Net Proceeds on Minerals Tax (NPOMT), as mandated by the Constitution. Simply put, this is a property tax on the assessed value of the metals or minerals the mines extract.

Today's mining is a high-tech, labor- and machinery-intensive industry. Long gone are the days of grizzled miners with picks scraping gold nuggets from the hillside. Today's mines extract microscopic flakes of metal (gold, silver) and mineral (lime, lithium), as well as geothermal, and process them into a commodity that is ultimately sold on the open market.

But until mining companies invest significant resources to identify and extract those metals and minerals, that microscopic flake in the ground is only slightly more valuable as the dirt in which it is embedded.

In addition to the NPOMT, mining companies pay conventional businesses taxes, such as sales and use, property and payroll, as do all Nevada businesses. In 2009, mining paid $200 million in taxes -- $100 million came from the minerals tax, the other $100 million came from business taxes. In fact, mining pays more taxes per employee than any other industry in the state.

This year, the NPOMT exceeded $140 million -- and all of it was prepaid to the state on March 1 per an agreement the industry reached with lawmakers during the 2008 special legislative session -- all from an industry that is just 3 percent of Nevada's gross domestic product.

If your home property tax was the same rate as mining's, you'd be paying four times as much as you are right now.

It is important to remember, when you talk about mining in Nevada, that this isn't about a handful of faceless corporations. The thousands of men and women who work in our industry are proud Nevadans. They pay the same taxes all of us pay, send their children to Nevada schools and want the same quality of life. Like you, they are concerned about the fiscal health of the state in which they live.

But singling out mining, or any particular industry, to pay more taxes is not a comprehensive solution to a problem in need of long-term vision.

In complicated fiscal times like these, mining is an easy target. The price of gold is high and most mines are located in remote locations, out of sight of most Nevadans. But remember, ours is an extremely cyclical industry, with historic peaks and valleys. Anyone who owns a home or real estate in Nevada needs no further reminder that markets don't rise forever.

That mining's heritage literally founded Nevada is not lost on the people and companies that work here today. Mining is proud to be a good corporate citizen of Nevada. The industry has raised generations of Nevadans, and is putting tens of thousands of Nevadans to work at the mines and in businesses that provide services to the industry. Mining pays more than $18,000 per employee in taxes compared to the Nevada average of $5,500 per employee. Mining gave more than $4 million in charitable contributions in 2009 throughout the state, including donations to such organizations as Three Square and the Cleveland Clinic Lou Ruvo Center for Brain Health.

Despite much that has been written, mining is not hiding during these times of state budget uncertainty. Nevada mining prides itself on a track record of active participation in helping solve the state's fiscal issues. Our involvement includes the one-time $25 million contribution of mine claim fees enacted at the 2010 special session; supporting the temporary sales and payroll tax increases enacted in 2009; agreeing to pre-pay our minerals taxes as requested during the 2008 special session; and supporting the tax increases enacted in 2003.

We continue to be committed to finding long-term funding solutions, not engaging in reactionary finger-pointing when it comes to our state's challenging fiscal questions. Should the governor and Legislature determine increased taxes are required this session, mining will work with them to implement broad-based taxes that do not single out any industry and thereby place a disproportionate reliance on any particular segment of the economy to pull Nevada out of its economic woes.

Tim Crowley is president of the Nevada Mining Association.