On Nov. 4, Nevada voters will decide whether to remove mining’s unique, 150-year-old tax protections from the state constitution and allow the Legislature to update the mining tax system to reflect modern times. Passage of Question 2 won’t raise or lower the taxes that mining pays. But it will remove the special protection that no other industry in our state enjoys.
Nevada’s mining taxes are nearly nonexistent compared with the rest of the world, and we are one of three states with no corporate profits tax to help pay for the services that benefit those corporations. Billions of dollars of mineral wealth has been extracted here; the vast majority has been exported. It’s been that way since statehood, when gold and silver from the Comstock built San Francisco and the Pacific Stock Exchange.
Nevada is the No. 1 gold producer in the United States and one of the top five gold producers in the world. Mining corporations account for 98 percent of toxic chemicals released in Nevada, according to the Environmental Protection Agency, and a single gold ring leaves in its wake, on average, 20 tons of mine waste. The average gold mine uses enough water to provide the basic water needs for a population equivalent to that of a large American city for a year.
In 2011, the laundry list of deductions, coupled with the fact that the mining companies had rarely, if ever, been audited by the state, came to light during hearings. Legislators discovered that mining lobbyists had gamed the Tax Commission and Nevada taxpayers by writing in deductions on everything from the dues to the World Gold Council to double-dipping on health care deductions. Even the president of the Nevada Mining Association admitted some of the deductions were questionable. The Legislature passed Senate Joint Resolution 15, which is the first step to removing mining’s loopholes from the state constitution.
The following session, in 2013, big mining had one lobbyist for every two legislators. They arrived with guns blazing and threatened lawsuits, reduced funding and even offered a $50 million bribe to the Nevada Legislature to kill SJR 15. Legislative leaders demonstrated commendable resolve under such immense pressure from big mining.
Clark County residents know that whether the Strip booms or loses money, schools in Elko and other mining towns are still funded by dollars from Clark County. Yet when mining does well, Clark County sees no increase in its revenues. Nevada’s world-class gold industry brought in $8.1 billion in 2013, and paid to the state general fund $74 million in mining taxes, for a tax rate of less than 1 percent.
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