Mining ready to do its (small) part

At Thursday’s Interim Finance Committee meeting, legislators listened as mining lobbyists Pete Ernaut and Jim Wadhams said their industry was willing to step up and help Nevada in its time of budget crisis. Trouble is, when compelled to say what mining had in mind, neither Ernaut nor Wadhams made it sound as if the industry plans to part with much of its record-priced gold.

The lobbyists offered that the industry would be willing to further prepay its net proceeds tax, kick in some cash in the form of higher fees, but wouldn’t accept any loss of its healthy tax deductions. Critics believe those deductions pretty much allow mining to dictate how much it hands over to the state.

Not even legislators accustomed to stepping like ballerinas around Big Mining for fear of getting their toes crushed could sit silent for that. Legislative lion Bill Raggio echoed the sentiments of more liberal legislators such as Assembly Speaker Barbara Buckley and Senate Majority Leader Steven Horsford when he said the time for small gestures was over.

Buckley reminded all present that Gov. Jim Gibbons’ announced 10-percent cut to public education would likely mean the loss of 2,322 teachers. Similar cuts to social services would translate into the loss of adult daycare and everything from dentures to nursing home stipends for the elderly poor.

“We need mining to pay and to help us in this crisis,” Buckley said to Ernaut. “And I appreciate you indicating that you’re wiling to do it.”

She sounded anything but convincing.

Frankly, neither did Ernaut.

The industry’s plan, such as it is, is not to pay higher taxes or see its deductions shrink. He said it “does not include any deviation from the current proceeds of minerals tax, but it does look at increasing the existing fees. And it does look at further prepayment of our net proceeds tax, and it also looks at some surplus monies that we believe that net proceeds tax will create that have not been accounted for currently. I don’t know where that’s going to go, but certainly we understand the number that you all are shooting for and we’re doing our darned best to get there.”

Their darned best?

That traditionally has meant the darned minimum for an industry that today enjoys near-record gold prices.

But not even Big Mining’s longtime ally Raggio could resist the opportunity to jab the governor and put the crisis in perspective: “I have some reluctance as one member of the Legislature to agree to these further prepayments of taxes. It’s not just mining, it’s others.

You know, we have an immediate problem. In the back of our minds we’re dealing certainly with this immediate shortfall. But lurking in the backs of our minds for those of us who are committed to participating in the next regular session, we’re looking at a problem four times as big if not larger than what we’re trying to deal with at the moment.

We understand right now that through a careful analysis, that we’re probably going to be $3 billion short of the funding in the existing budget that we are now looking at. And let me just say parenthetically to all the critics out there, we get criticized because last session we raised some taxes temporarily in the amount of $780 million – I’m not counting the one the Governor proposed, the room tax – I would take very careful note here, that if we hadn’t raised those temporary taxes that will sunset, we’d be looking at cutting another $900 million off of this. I think the verification of that is, that the Governor didn’t put that on his proclamation here that we repeal that .…”

For more on this subject, including the intriguing and obvious connections between the mining industry and legislative leaders, read my Sunday column in the Review-Journal.