Liberal group begins push to tax mining in Nevada

CARSON CITY, Nev. (AP) - A Nevada liberal advocacy group is mounting a drive to get voters to back a ballot measure to collect more taxes from gold mining.

Progressive Leadership Alliance of Nevada officials say the state could reap more than $200 million a year in taxes if voters approve cutting deductions paid by mining companies.

"All the state's other industries - tourism, gaming - are on the ropes," alliance director Bob Fulkerson said. "We have an enormous need in our budget. One industry is recording all-time profits, and that's the mining industry. Yet they're paying next to nothing."

Nevada Mining Association chief Tim Crowley said it would be a mistake to try to tax one type of business to fill state budget needs. He cited tax studies and said all businesses need to pay a fair share.

PLAN board members voted last month to begin an initiative drive to eliminate most of the deductions that reduce the taxes paid by gold mining companies.

Fulkerson said the group hopes to raise $250,000 to cover legal costs and signature-gathering.

Liberals have argued for years that mining does not pay enough in taxes. Calls have gotten louder as gold prices have soared to record levels while the state's general fund has faced massive budget shortfalls.

Crowley said that although gold prices are at record $1,200-an-ounce levels, the industry is prone to booms and busts.

"We all know the price of gold is going to drop," Crowley said. "It would be hitching your wagon to a buggy that's going to crash."

PLAN would need to collect 97,000 signatures by November and obtain certification by the Nevada secretary of state to put the measure before the Legislature in 2011.

Lawmakers would have 40 days from the start of the session to enact the measure, or the initiative would be placed on the 2012 ballot.

Nevada produces about 8 percent of the world's gold, according to the state Division of Minerals, behind only China, South Africa and Australia.

In 2008, mining paid $49 million in minerals tax to the Nevada general fund, and another $42 million to counties. That represented an increase from 2005, when mining paid $19 million to the state and $22 million to counties.

By comparison, the state's liquor tax brought in $41 million and its cigarette tax generated in $110 million in 2008.

Besides payroll, sales and other taxes that other businesses pay, mines pay a "net proceeds of minerals" tax based on the value of the ore, after costs such as extraction, transportation and marketing are deducted.