If not for Republican state Sen. Michael Roberson shaming Democrats into action, it is by no means clear that the amendment to take mining’s tax protections out of the state constitution would have passed the Legislature for the second time this year.
But it did pass, which means that in the 2014 election, voters will decide whether mining should continue to earn billions in Nevada and then pour it down ratholes the world over, distribute it to shareholders and pad corporate cash reserves, or whether more of that wealth should stay in Nevada, where it came from.
Then if — when — voters remove mining’s unwarranted enshrinement in the constitution, a reformed mining tax will have to pass the 2015 Legislature by a two-thirds majority. If mining apologist Brian Sandoval’s gets reelected, presumably the same legislative majority would be needed to override a gubernatorial veto.
Meantime, if — when — voters pass the amendment, mining lobbyists have suggested the industry will file a lawsuit claiming that the elimination of their protected tax status in the constitution means they don’t have to pay any mining taxes at all — at least from the moment the constitutional amendment takes effect until the Legislature establishes a new mining tax.
Since what mining pays now is so negligible, the industry’s victory in such a suit would be no great loss. Mining taxes account for about 3 percent of state general fund revenues. As regular readers of this space know, mining needs Nevada a lot more than Nevada needs mining.
At least one legislative Republican who, like Sandoval (but unlike Roberson), thinks mining should continue to be coddled, recently all but dismissed the importance of taking mining out of the constitution. Assuming voters approve the amendment, Assemblyman Pat Hickey suggested recently, any new mining tax established by the Legislature would likely not bring in much more money than mining currently pays.
Lawmakers following up a landmark amendment to the constitution with an offensively small measure that continues to treat mining with kid gloves? Hmm. Given the palsied nothingness masquerading as a budget debate in the 2013 session, replacing current mining tax policy with equally wimpy policy sounds like exactly the sort of thing Nevada lawmakers would do.
But if mining responds to passage of the constitutional amendment by going to court and arguing that the largest gold mining corporations in the world should not pay any mining taxes at all in the one place that is most responsible for the profits of those corporations, might legislators exhibit a normal human reaction and, you know, take offense?
Would Democratic legislative leaders react to such a brazen “Fuck you, Nevada” from the mining industry by just squirreling their mugs into vacant expressions and muttering “we need to have that discussion,” i.e., the pathetic tactic Democratic leaders deployed to evade “having that discussion” over the budget this year?
Would Republicans from the sticks, where local government often relies on mining taxes, stay true to form and rally to mining’s defense after mining went to court to effectively bankrupt rural counties?
Sadly, it is easy — too easy — to imagine Democrats stumbling about saying “maybe we shouldn’t have voted to take mining out of the constitution after all sniffle whimper sniffle” (accompanied again of course by the Official Slogan of Nevada Democratic legislators: “We need to have that discussion”).
And it’s all too possible that backwoods Republicans would rush to blame voters, especially those icky voters in the icky city, for just cold forcing mining corporations to stop paying the teachers who educate the children of mining employees.
But while the industry hates to pay taxes, it likes to spend money on public relations campaigns telling everyone how much mining loves Nevada communities.
Well, nothing says “I love you” like going to court to stop paying taxes. Even intimidated, frightened legislators might fight back against that sort of abuse.
And so there’s an argument to be made that an in-your-face lawsuit from mining is just the thing to prompt legislators to finally, at long last, treat mining the way Nevada should have been treating it decades ago.
Here’s the easy way this should work. Arrogant mining industry leaders who have merely had to whisper some sweet-if-slightly-too-complicated-to-understand nothings into the ears of legislative dullards — and funnel money into legislative campaign accounts — should realize that their sweetheart deal couldn’t last forever, and now they’re finally going to have to start paying taxes on a par with those paid by other extractive industries around the country and the world. They should admit their well-deserved defeat, and accept a higher tax burden in the 2015 legislative session. And they should tell their pet governor to shut his piehole and get on board, too.
Here’s the depressing way this could play out. Voters strip mining from the constitution, mining sues to say ha ha it doesn’t have to pay anything, and legislators and the governor, too feeble to stand up to an industry even though that industry depends on Nevada like no other place in the world, make a mockery of the electorate’s intent by passing a mining tax that doesn’t raise any more money than the crumbs the industry pays now.
And here might be the best way this plays out: Mining sues and wins, pissing off lawmaker so much in the process that when the legislature meets in 2015, it looks at the plan Roberson floated this year to double the industry’s post-amendment tax, and says, OK, not bad, but let’s triple it on the bastards instead.
HUGH JACKSON co-hosts The Agenda on KSNV Channel 3.