Sunday, Jan. 22, 2012 | 2 a.m.
In Nevada’s shifting political alliances, nothing is more intriguing than those along the axis of the tax debate.
For a decade, the mining industry has aligned itself with interests that have backed a broad-based business tax, betting it would be a strong position from which to withstand the more politically popular alternative — to increase taxes solely on mining companies.
The strategy put the mining industry in some uneasy partnerships with the gaming industry — which shares its worry of industry-specific taxes — and with some progressive groups that want to see the tax base broadened but have concerns about the environmental impact of mining.
But after the industry became the sole target of a multi-front legislative attack last year, some companies appear to be rethinking their alliances.
Shortly after the legislative session ended,Barrick Gold Corp., the state’s largest mining company, opted to join the Keystone Corporation, a political organization opposed to raising taxes. Any taxes. Period.
Barrick not only joined the organization; it contributed $30,000 last year, according to Keystone’s recently filed 2011 campaign finance report. A glance through the past three years of contribution reports shows no single business had matched that sum.
Barrick officials did not return calls seeking comment. But sources close to Barrick say the decision to join wasn’t solely political. Rather, it’s part of a business decision to become more integrated in the Las Vegas business community.
Barrick has joined the Latin Chamber of Commerce and other organizations. Joining Keystone is no different, they said. (It has not yet joined the Las Vegas Chamber of Commerce, perhaps conspicuously given its effort to integrate into the Southern Nevada community.)
“Barrick has some pretty strong corporate citizenship rules that they take seriously,” one source said. “And that is a pretty important relationship to have. Conversations happen at that organization that are better to be part of than not.”
Corporate citizenship aside, the decision also signals Barrick may see declining value in aligning itself with forces that support a broad-based business tax.
First, the company and others in the industry are still smarting over what they perceived as an all-out assault by their former partners during the legislative session. Driven by progressive organizations, lawmakers eliminated the industry’s eminent domain powers, created a new industry oversight commission, killed some of its tax deductions and started the process to remove the industry’s constitutional tax protections.
“Progressives took a natural friend and beat him up,” one industry source said.
Ironically, Monte Miller, one of Keystone’s longtime leaders, recently said he would pursue a ballot measure to raise the mining tax — an effort that the Keystone board voted to oppose.
Second, last session proved to many that a broad-based tax will be impossible to get through the Legislature.
As a result, if the state continues to operate in the red, calls for raising industry-specific taxes — taxes that the proverbial “other guy” pays — will become more insistent.
Still, some in the industry question Barrick’s decision to join an organization that is seen by centrist organizations as obstructionist for its refusal to participate in negotiations over how to change the state’s tax structure.
One industry source cautioned that Barrick shouldn’t be compared to organizations who resolutely say “no” whenever any question of taxes comes up. “We’re still a moderate industry,” the source said.
Indeed, Barrick officials haven’t publicly separated themselves from the push for a broad-based tax.
Michael Brown, the company’s chief corporate lobbyist, penned a newsletter just last week that emphasized the company’s desire to strengthen the tax base to support higher education.
“As the Legislature struggles to keep funds flowing to higher education, Barrick has stepped forward and supported a broad range of revenue-generating options,” Brown wrote. “We have supported increases in the modified business tax and other proposed broad-based revenue measures.”
Yet, as forces continue to align and then realign as the tax battle potentially heads to the ballot this year, it will be interesting to see where the mining industry lands.