Mining tax proposal falls 1 vote short in Nevada special session

After a week of mostly behind-the-scenes discussions, the Nevada Legislature's emergency special session grew contentious Thursday during middle-of-the-night sparring over a proposal to cap tax deductions for mining businesses that stalled hours after it was introduced.

The bill passed through the Assembly on a party line vote but fell one vote short of passing in the Senate, where a two-thirds majority is needed to increase taxes.

The deduction cap would have provided about $100 million to the state's general fund and was the first substantial revenue proposal put forth during the nine-day special legislative session.

It garnered enthusiasm from Democrats all the way up to Gov. Steve Sisolak, who put out a statement that he would sign the bill if it passed through the Legislature even before the Legislature published a bill draft.

The proposal to reduce mining industry tax deductions to 60% of current levels won unanimous support from Democrats, who've long argued mining businesses should pay more in taxes.

Assemblywoman Maggie Carlton, D-Las Vegas, called 2020 an unprecedented time.

"A giant loophole on an industry that is making billions of dollars needs to be closed today," she said.

Even though it didn't pass, by proposing the bill, Democrats satisfied members of their progressive base that have demanded lawmakers advance more ambitious proposals to tax mines instead of approving cuts to healthcare, education and state workers.

Without about $100 million in additional revenue that could've come from capping tax deductions for mining businesses, bills passed during the special session have added a projected $147 million to Nevada's general fund.

Lawmakers are expected to hear proposals to draw about $140 million from certain reserve funds to avoid cuts to healthcare, education and state workers in the coming days.

Around the time Democrats released the mining tax proposal, state Senate Republicans released a "budget solution" document that proposed restoring $160 million in cuts outlined by the governor's plan.

By drawing from unrestricted Medicaid reserves, employment security reserves and projecting the federal government will continue providing more Medicaid matching funds amid the pandemic, Republicans say the state can restore $115 million in cuts to healthcare and $43.2 million in cuts to education.

Sen. Ben Kieckhefer, R-Reno, said both Republican and Democratic lawmakers had found additional funding sources not identified by the Governor's Finance Office prior to the special session through collaborating together and with legislative staff who did similar work after the Great Recession.

"The governor didn't have to propose kicking poor Nevada children out of their dentist office or out of their eye doctor. But he did because these things weren't identified in advance. If he had decided to engage with the Legislature, he could have avoided that," he said.

Democrats later released a parallel proposal that outlined similar additional fund sources and similar plans to restore proposed cuts to healthcare. But where the Republican plan proposed restoring funding to education programs, including $31.4 million to the "Read by Grade 3" program, the Democratic plan proposes restoring $41.5 million in funding to minimize state worker furloughs and prevent layoffs and a salary freeze.

In response to a question about how their plan differed from the Republican plan — which restored more funding to education and less to state workers — Senate Majority Leader Nicole Cannizzaro, D-Las Vegas, and Assembly Speaker Jason Frierson, D-Las Vegas, said they would rather raise revenue than consider the cuts proposed.

"We were not adequately funding services before this pandemic and I think it's short-sighted to suggest that we don't need revenue after a $1.2 billion shortfall," Frierson said.

Sam Metz is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.