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October 10, 2015

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Tax initiative could unite liberal activists, mining industry

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For liberal activists who have been fighting the mining industry for years, it seemed the forces had finally aligned.

Thanks to record gold prices and a shift in public opinion, it appeared they would be able to close some of the industry’s generous tax loopholes, increase regulatory oversight of mining and eliminate its power of eminent domain.

The activists went head-to-head with an army of mining lobbyists who spend heavily grooming legislators to vote their way. And on several key battles — much to their surprise in some cases — the liberal activists won.

But now, as they plot how to carry on the fight, some are considering an alliance with their enemy. They are weighing joining forces with mining and other industries to sell voters on a broad-based business tax, instead of a ballot initiative targeted solely at the mining industry.

Mining’s opponents frequently threatened lawmakers that they would simply go to the ballot if the Legislature didn’t raise the industry’s taxes. They envisioned it would be simple to gather support from the public, which is largely convinced that the booming industry isn’t sharing in the economic hardship, to back such a ballot question.

But these activists also believe that Nevada’s wobbly tax structure — which, ironically, is wobbly because it relies too heavily on taxes from a single industry — needs permanent help in the form of a broad-based business tax.

Some in their ranks believe putting both on the ballot at the same time would kill both efforts.

So which do they want more?

“If (a mining tax increase) were on the ballot it would pass, hands down,” said Bob Fulkerson, executive director of the Progressive Leadership Alliance of Nevada, which has been at the forefront of the fight.

“But if it were on the ballot with another tax initiative, the advertising blitz that would be done against it could doom both to failure. I don’t think anybody wants that on their conscience when Nevada is hurting so bad.”

Perhaps more important, Fulkerson reasoned, they are going to need mining’s help to get a broad-based tax increase passed. “We are going to need all hands on deck to get a broad-based initiative through,” he said.

The mining industry has long supported a broad-based tax increase. To help stave off industry-specific attacks, its lobbyists worked to win the support of key Republicans for the Democrats’ tax increase last session.

They failed, with many industry insiders believing the ballot is the only place such an increase will be successful. And some say liberal activists will need to be part of the coalition pushing the tax increase.

It would be an uneasy alliance for both sides and would fall far short of a truce.

“You have to understand that the motivation for most of these liberal advocacy groups is not to tax mining to fund government; their mission is to tax mining out of existence,” said Pete Ernaut, a lobbyist that used to represent mining and who is expected to be instrumental in building a coalition of business industries to back a broad-based business tax ballot initiative. “They won’t stop until they stop mining in Nevada.”

Fulkerson also made it clear that any cooperation wouldn’t mean he and his allies would back off the industry the next time the Legislature convenes. They want to continue tightening the industry’s tax deductions and working to eliminate the mining tax’s constitutional protection.

“We are still going to be out there with both barrels loaded in 2013,” Fulkerson said. “Our enthusiasm is not waning at all on that. But a ballot proposal in 2012, we’re probably much more pragmatic.”

Not all liberal activists are convinced that having both questions on the ballot would “doom them both to failure.” And the thought of joining a coalition with the mining industry has caused some conflict among liberal groups.

“There’s a disconnect still on the left side of the aisle with respect to mining,” said Erin Neff, executive director of ProgressNow. “Progressives are like, ‘Tax the hell out of them, they deserve it.’ Labor, not so much. They see the potential for jobs.

“I don’t really know at the end of the day if we are going to get there on mining.”

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