Nevada lawmakers introduced a proposal late Saturday to impose additional taxes on mining, opening the door for consensus between an industry that has long sought to protect its unique tax structure and reformers who want to increase state spending on education.
Under a deal brokered by lawmakers from both parties, mining lobbyists and the state's largest teacher's union, the state will funnel more dollars from its Net Proceeds on Minerals tax to education and add a tax on gross revenue that is tiered and will only apply to mines that gross more than $20 million annually.
Mines that report gross revenue of $20 million to $150 million will be charged 0.75% excise tax, while a 1.1% tax will be charged on mines that report any higher. The tax on gross revenue will only apply to silver and gold mines, excluding other minerals like gypsum, lithium or copper and earmark much of the funding for education.
Tyre Gray, the president of the Nevada Mining Association, said he could not explicitly support a tax hike. But the measure introduced Saturday, which has no sunset clause, "is really meant to be a definitive answer to whether or not mining pays its fair share," he said.
"There are those who will say that mining has not paid its fair share. This bill will guarantee that that argument is no longer viable," he said.
He said the industry preferred the current proposal on the table to the three tax proposals introduced last summer, which would have raised $147 million to $607 million in annual revenue. Assembly Speaker Jason Frierson said Saturday's proposal would generate an estimated $170 million every two years.
Battles over how to tax mining in the state have raged since prospectors struck silver in the 19th century. The state Constitution has since required mining businesses be taxed at less than 5% of what are called net proceeds — profit minus deductions for certain costs.
Mines in the state produced a $8.2 billion-worth of silver, copper and other minerals in 2019 — more in non-fossil fuel minerals than any state. They collectively paid $61 million in taxes to the state that year.
Because neither Republicans nor Democrats command the two-thirds supermajority required in Nevada to raise taxes, its passage will require support from both parties. In an impromptu Ways & Means Committee meeting held on the Assembly floor, lawmakers from both parties backed the introduction of the bill. But it still must clear both chambers with two-thirds majorities.
Senate Majority Leader Nicole Cannizzaro said there were still "ongoing negotiations" and didn't close the door on the resolutions passed last summer, should discussions deteriorate. She said she was optimistic about the prospect of providing schools additional funding.
"Asking for some additional revenue from mining — I think — represents an investment in our kids," she said.
In the past, Republicans have argued the mining industry is a key part of rural economies and too much taxation could jeopardize thousands of jobs in both mines and the businesses that cater to employees and their families.
Progressive activists point to how Nevada ranks compared with other states for per-pupil K-12 education spending ( 44th ) and healthcare spending per capita ( 48th ) and say mines can afford to pay more. They celebrated the introduction of the bill on Saturday evening as a step forward.
"While we will continue to push for what Nevadans truly deserve, this proposal will address the needs of the people in a meaningful way and allow our state the funding needed to maintain and build on critical public services immediately," said Laura Martin, the executive director of the Progressive Leadership Alliance of Nevada.
Mining tax reform fell one vote short of two-thirds approval needed to pass through the statehouse last summer. But as a consolation, with simple majorities, Democratic lawmakers decided to take the first step toward advancing mining tax proposals to the 2022 ballot.
Throughout the latter half of the legislative session, mining industry representatives and Democratic Party operatives have both said they prefer reaching a the compromise deal in Carson City rather than risking the uncertainty of a ballot measure — the presence of which could reverberate to other races up and down the ticket.
Though Republicans are in the minority in both the state Senate and Assembly, they are hoping the two-thirds requirement for tax proposals will provide them power them to extract concessions from Democrats.
In exchange for their support, Republican asks have included returning funding to education initiatives like Opportunity Scholarships, which the then-Republican majority created in 2015 to enable low- and middle-income families to pay private school tuition. Democrats elected to shrink the program in 2019 and the proposal reverses that decision.
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.