Republicans to propose mining tax initiative as alternative to margins tax

 

UPDATE2 -- GOVERNOR OPPOSES -- Here is his statement, via his spox:

In his balanced budget, the Governor's commitment to K-12 education has increased spending for our schools, including an additional $135 million general fund investment.  What's more, because the economy is growing and local revenues are up, overall spending on K-12 education is up over $400 million from last biennium.

 

The Governor's budget included increased spending for education without increased taxes.  The Governor will not support a tax increase.

 

UPDATED WITH GOP RELEASE ATTACHED

 

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State Senate Republicans -- or at least a majority of them -- will today propose to scuttle the teachers' margins tax by proposing to tax mining instead.

The idea for an alternative on the 2014 ballot, which will be announced this morning in Carson City by Minority Leader Michael Roberson a few hours before the big margins tax hearing, would bank on two things:

1. Getting Democratic support.

2. Passage of SJR 15, which would give lawmakers more flexibility to tax mining.

The move could be a political masterstroke, putting the mining industry on the defensive and boxing the Democrats. But if the desire is to kill the hated margins tax (and Republcians and more than one Democrat (Speaker Marilyn Kirkp[atrick) hate the margins tax), appear reasonable on tax policy and get frustrated Progressive Alliance of Nevada members to switch parties, this may do it.

It's an unexpected gambit but one that could look brilliant in the end as the Republicans are willing to do something that the Democrats, some of whom have whispered the mining line that SJR 15 could cost the state money by inadvertently lowering the net proceeds tax (because it is a property tax of sorts), have been unwilling to do for decades.

(I expect the mining folks to deploy a divide and conquer strategy to kill this. And that just may work, if past is prologue.)

(Don't forget that state Senate Minority Leader Michael Roberson previously has tangled with mining lobbyists. So I'm sure this is no stretch for him, and he has majority support in his caucus, I'm told.)

The Democrats surely will argue taxing mining will not broaden the tax base, but I understand the Republicans will emphasize that taxing mining is separate from a systemic reform discussion. The mining initiative will emphasize the money will go to education, although the exact vehicle has yet to be determined.

The possibilities: taxing gross proceeds, increase net proceeds, apply a severance tax or another tax entirely. Once SJR15 is passed, removing consitutional protections embedded when the industry wrote the state's founding document  in 1864, the possibilities are endless.

Expect the Republicans to compare mining's tax burden to gaming's and to show how raising the net proceeds or levying a gross proceeds tax (gaming is taxed on gross) could raise a fortune.

Roberson will take the lead, but I understand he has support from Ben Kieckhefer, Joe Hardy, Mark Hutchison and Greg Brower. But my guess is a few members of his caucus will not be at the news conference today.

Now about Gov. Brian Sandoval....

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