Sam Morris / Las Vegas Sun
Monday, April 9, 2012 | 2 a.m.
Steven Horsford quickly put the mining industry in his sights last legislative session. As a Democratic state senator from Las Vegas adamant about finding more money for education and realistic about the chances a tax increase would make it through the Legislature, the state’s prosperous mines provided a way to pay for it.
So for four months, he worked to close tax loopholes exploited by the mining industry, argued for regulators to change the way they allow tax deductions for the industry, eliminated some deductions from state law and started the ball rolling on an initiative to eliminate the industry’s tax protections enshrined in the state constitution.
The effort netted more money for the state budget, but won him few friends in the industry.
At the time, Horsford couldn’t have known he’d find himself campaigning for Congress in a district that includes half the state’s rural counties. But that’s how the court drew Nevada’s newest congressional district, which stretches from Horsford’s neighborhood in Las Vegas to the south end of Lyon County.
In Las Vegas, Horsford is a hero among progressives who have long thought the mining industry doesn’t pay its fair share.
As he begins campaigning for Congress, Horsford is having to work to convince rural voters and the big mining companies that help fund congressional campaigns that he would be an advocate for the industry in Washington.
In Lyon, Nye and White Pine counties — where the economy is heavily dependent on mining — Horsford’s crusade last session seemed aimed at the heart of their livelihood.
“As more people become aware of his legislative history, he is going to be taken to task,” said Lyon County Commissioner Virgil Arellano, whose district includes Nevada Copper’s pending Pumpkin Hollow project, a mine slated to bring 2,500 jobs to the Yerington area.
“I would say there is a lot of concern for Sen. Horsford’s positions,” Arellano said.
Pumpkin Hollow is heavily dependent on a federal land transfer that must be approved by Congress. Its financial viability is based on existing Nevada tax rates, Arellano said.
Removing the net proceeds tax from the state constitution so lawmakers could adjust it, as Horsford wants, would threaten the project, he said.
“Nevada Copper has invested so much time and energy and money into this. And to be held hostage on something like that… That’s the way I look at it. It’s extortion,” Arellano said.
“Compare mining to any other business and they pay their fair share and then some,” said Nye County Commissioner Lorinda Wichman. “This is our golden goose. When you have problems with the budget, you don’t whip the golden goose.”
In the Legislature, the mining industry and its battalion of lobbyists for Barrick and Newmont fought Horsford at nearly every turn, arguing lawmakers should keep their hands off the industry’s deductions on the net proceeds tax. It earned him a reputation as an opponent of the industry.
But Horsford is challenging that premise. “I am a proponent of the mining industry who believes in fairness, equitability and transparency on that industry just like any other industry, like big banks or big oil,” he said.
Horsford has campaigned in Ely and was at the ribbon cutting for Pumpkin Hollow. He said he supports the land transfer legislation now making its way through Congress.
But he hasn’t had much success convincing Barrick or Newmont to back his campaign.
“He’s trying to talk to them and they’ve been very reluctant to have any discussions about material support,” said one mining lobbyist.
Another lobbyist, however, said the companies likely will be pragmatic with their donations.
The new district has a strong Democratic voter registration advantage, meaning it will be difficult for the eventual Republican nominee to prevail. State Sen. Barbara Cegavske, businessman Danny Tarkanian and businessman Dan Schwartz are vying in the Republican primary.
“Horsford is probably going to win that race,” said another mining lobbyist. “I would think the mining companies would take that into account. And corporations don’t tend to hold grudges.”
Cegavske, however, has already collected checks from Barrick’s political action committee. She also has Arellano’s endorsement.
But Horsford does have fans in the industry.
Last session, he helped repeal a mining claim tax that lawmakers had passed in the 2010 special session with the support of big mining companies. The mining claim fee, however, was opposed by mining exploration companies, who hold a high number of claims that aren’t yet productive mines.
Midway Gold, which led the fight to repeal the claims fee and has operations in White Pine County, is now one of Horsford’s biggest financial backers. The company’s executives and lobbyists have contributed $8,500 to Horsford’s campaign, finance reports show. Ken Brunk, Midway Gold’s president, held a fundraiser for Horsford last year.
Horsford said it’s ironic that the work he did during the session helped the smaller mining operators and exploration companies that are active in the district he now seeks to represent.
“We had no idea in the end how those congressional lines were going to be drawn,” Horsford said. “I had no idea that … the district I live in would include White Pine County and southern Lyon County and everything in between.”
Horsford said the mining issues at the federal level are different than those at the state level. In Congress, he won’t be responsible for funding a state budget or ensuring that the state’s industries pay their share of it.
“A lot of federal agencies have interaction with the mining industry,” Horsford said. “I will be a strong advocate to make sure the mining industry and their interests are protected and that we have a fair and equitable regulatory system in place.”
But some rural voters have their doubts based on Horsford’s performance last session.
“I don’t think leopards change their spots,” Arellano said.