Legislators look at mining for potential revenue
Nevada Mining Association President Tim Crowley says it’s ironic that some state legislators are looking to a “boom-and-bust” industry like mining to try to plug holes in the state budget.
With the gold market surging amid Wall Street’s recent struggles, some state lawmakers see the mining industry as a potential source of untapped revenue to fill gaping budget holes.
“Mining will be taxed, but so will a lot of other businesses, and individuals, too,” said Senate Taxation Chairman Bob Coffin, D-Las Vegas.
Gold prices have climbed steadily since 2007 as investors, wary of the world’s volatile stock markets, have looked for an economic safe haven. Gold sold for $940 an ounce Friday, up about $300 from two years ago.
Nevada produces 80 percent of the gold in the United States and mines more of the precious metal than all but three countries.
The state’s mining industry made $5.4 billion in revenue in 2007, with about 78 percent coming from gold sales. That year, the industry paid $34.7 million in state mineral taxes, a little more than 1 percent of the state government’s total tax haul.
Despite rising gold prices, that number is expected to fall to $33.6 million this fiscal year, followed by years of $28 million and $26.5 million, according to state Economic Forum estimates.
Crowley said the mining industry isn’t opposed to fair tax increases that affect all businesses, but doesn’t want to be singled out for a major tax increase that could hurt profitability. If that happens, he predicted companies would reduce efforts to find new ore deposits.