Las Vegas Sun

October 23, 2019

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Democrats quash mining tax to bolster Reid’s reelection hopes

Harry Reid

Harry Reid

Beyond the Sun

State advocates of mining reform have long held that there is one path to accomplish their task given the industry’s clout and the Legislature’s often limp will: Take the issue to voters and change the Nevada Constitution.

Blocking that path is the single-largest concern for Democrats and their allies this political season — Harry Reid.

In a sign of just how all-consuming Reid’s reelection has become for Democratic-leaning organizations, the liberal Progressive Leadership Alliance of Nevada has altered its mining strategy, choosing to pass on a constitutional amendment to pursue changes in state law to limit the deductions gold miners can make before paying a 5 percent tax on net proceeds.

Having a potential tax hike on the ballot, which would presumably energize anti-tax conservatives, would have a potentially negative effect on Democrats on the ticket. And during the last legislative session the state teachers’ union proved an initiative petition can be an effective tool to get legislation passed, when it used the process as leverage to raise the room tax.

But it has become clear that nearly every decision made by Democrats this cycle is being carefully weighed for its potential effect on the Senate majority leader. That consideration has colored decisions big and small — from who should run in races down ticket to state Democratic Party messaging, including its recent glossy mailer touting Reid to voters.

Those calculations on mining reform — which has been a passionate cause of some party members and their allies who think the industry pays too little in exchange for the state’s natural resources that it profits from — led to a shift in strategy to do what’s best for “Uncle Harry,” as Democrats sometimes sardonically refer to Reid.

To understand why they think the shift is necessary, imagine if the more passionate advocates of mining reform went full tilt after an amendment to change mining law. The mining tax rate is written into the Nevada Constitution.

A question would be placed before voters in November, when Reid is expected to face a tough reelection battle. Mining would roll out a big campaign to defeat the initiative, driving up turnout among anti-tax voters.

Reid — the son of a hard-rock miner in Searchlight and a longtime friend of the industry — would be forced to take a side. Does he back the miners and anger the Democratic base, or back the base and infuriate rural voters?

Either way, the conservative pro-mining vote would be motivated to head to the polls in droves.

Bob Fulkerson, executive director of the Progressive Leadership Alliance of Nevada, wouldn’t mention Reid by name when asked last week why the group isn’t pursuing a constitutional amendment. But “there were objections from our member groups about doing that,” he said. “The objection was: ‘Does having a tax question on a ballot in which races are going to be close negatively impact our friends who also might be on the ballot?’ 

“The concern was, a) In a recession, with record unemployment in Nevada, would a tax question pass? And b) Could it be a drawdown on the ticket, up and down the ballot?”

That Reid’s reelection is priority No. 1 is not exactly a secret.

“We have the most important elected official in the history of ... Nevada,” said Billy Vassiliadis, the Democratic power broker. “Of course he’s the most important consideration this year.”

PLAN will attempt to collect the necessary 97,000 signatures by November to send the proposal to the Legislature in 2011, when lawmakers convene for their next regular session.

Lawmakers will have 40 days to act on the proposed law. If legislators don’t pass the initiative, or if it is vetoed, it will go in front of voters in November 2012.

Even if it becomes law, the Legislature has been an amenable place for mining lobbyists. The fear among mining reform advocates has been that, slowly or quickly, but most assuredly, any mining reforms made to state law will be whittled away by legislators. If it was in the constitution, that’s something lawmakers could never touch.

Progressives might have to live with that and take comfort in having given Reid his best shot at reelection.

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