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November 28, 2015

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Democrats start to back off of mining


Steve Marcus / FILE

A cable shovel dumps gold ore into a truck in Crescent Valley in September 2001. In Nevada, mining companies get a slew of tax deductions, including for equipment depreciation.

Mining came out of the Legislature in 2011 on the ropes. Led by Senate Democrats, the Legislature limited mines’ tax deductions, instituted a new mining oversight committee and took the first step to rip the industry’s tax rate out of the state’s constitution by passing Senate Joint Resolution 15.

But now, elected Democrats and candidates are taking a softer approach to one of the state’s major industries, which also contributes heavily to both Democratic and Republican campaigns.

Click to enlarge photo

Sen. Mo Denis asks a question during a meeting of the Senate Finance Committee on the second day of the 2011 legislative session Tuesday, Feb. 8, 2011, in Carson City.

Take, for example, Sen. Mo Denis, who’s in line to be the leader of the caucus next year: “We understand they play an important role in the economy here in Nevada.”

He said the joint resolution, which passed in 2011 and has to pass again in 2013 before going to voters, is not on his radar screen.

“I don’t know where I’m at with that,” said Denis, who voted with all other Democrats and a handful of Republicans to pass the resolution in 2011. “Other issues are more pressing than that type of issue. When it comes to education, the economy, jobs — those will be more of a priority than that.”

Justin Jones, the Democrat running for a contested senate seat in Southwestern Las Vegas, said he has talked to both sides on the issue.

“My visceral reaction is, ‘Why is mining deserving protection in the constitution?’ But if we simply took the provision out of the constitution, mining companies would pay less in taxes,” he said in an interview last month. “That’s not the result that we’re looking for.”

That assertion — that SJR15 would result in them paying less taxes, without an alternative — also is one of the key talking points of the mining industry. (Advocates for the bill call it a catch-22: They can’t pass a different, higher tax on minerals because of the constitution but can’t change the constitution because there’s no alternative in place.)

The legislation on mining had been one of the few bright spots for liberals in 2011. It was a salve on an otherwise frustrating session for the left, which saw the 120 days largely dictated by Republican Gov. Brian Sandoval, despite Democrats controlling both the Assembly and Senate.

The prospect for tax increases once again is dim for the 2013 Legislative session, and it’s not clear what Democrats will have to offer to their base of supporters.

In many respects, the mining issue became front and center because of Senate Majority Leader Steven Horsford, D-North Las Vegas. He has left to seek a seat in Congress, so it’s natural that there would be less enthusiasm for the issue.

But some see the influence of campaign money also playing a role.

Click to enlarge photo

Nevada Sen. Sheila Leslie, D-Reno, and retired Nevada state archivist Guy Rocha listen to testimony on Leslie's proposal to strip the mining industry of eminent domain powers Monday, Feb. 14, 2011 at the Legislature in Carson City.

Former Sen. Sheila Leslie, who resigned her Reno seat to challenge Sen. Greg Brower, R-Reno, has been another vocal critic against mining, arguing the industry doesn’t pay its fair share. She, too, has shifted her focus away from singling out mining to a broader criticism that corporations in general don’t pay enough.

“Large campaign contributions often have the effect of creating amnesia on mining,” she said. “It’s not surprising at all to me that during campaign season, no one wants to address the core issues around mining.”

Leslie added it would once again be a tough battle in 2013.

“I’m not optimistic about winning,” she said, adding that she would bring it up again.

As it has in past years, mining has been generous in spreading around campaign money to both Democratic and Republican candidates.

While the companies have given to Brower and not to Leslie, they haven’t given the jaw-dropping sums to political action committees working to swing the Senate Republican like other companies have.

Newmont and Barrick gave a combined $50,000 to Gov. Brian Sandoval’s political action committee, the New Nevada PAC, which is spending money in the state senate races. But that figure was dwarfed by $100,000 contributions to the PAC from MGM Resorts International, Las Vegas Sands and Station Casinos.

Wynn Resorts also gave $475,000 to a national Republican group that is playing in the five competitive seats.

Barrick also gave $75,000 to the Nevada Democratic Party.

“Our campaign contributions have been modest,” said Tim Crowley, president of the Nevada Mining Association. “They have been consistent year over year. It’s a recognition legislators have expenses, they need to communicate with constituents.”

He said the industry has been and remains neutral on the resolution that could lead to the net proceeds on minerals tax rate being removed from the constitution.

The industry has been waging a public relations campaign and speaking to groups about mining. Crowley said his industry is focused on improving the workforce and changing the perception of the industry.

Crowley said the message aimed at lawmakers hasn’t really changed. But while they may have failed to get it across in the final frenzied days of the legislative session, they’ve been able to use the interim to ensure it’s been heard.

“It’s just time,” he said of getting the industry’s message across. “I think that in the last days of the session, it didn’t resonate.”

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