Las Vegas Sun

May 20, 2019

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Mining industry pays its share of taxes

In a recent

Las Vegas Sun column, J. Patrick Coolican used a recent decline in gold prices as an excuse to dismiss tax contributions by the mining industry.

The facts prove otherwise as mining’s tax contributions have increased significantly in recent years. From 2009 to 2010, taxes paid by the industry increased 55 percent from $203 million to $314 million. Our 2011 tax numbers have yet to be aggregated but are expected to increase by the same rate — if not more. And 2012 tax contributions will continue to increase because of high mineral values and the adjustment made to the net proceeds of minerals tax during the 2011 legislative session. This adjustment creates an additional $24 million in tax revenues paid by the mining industry each year.

Mr. Coolican is also dismissive of the mining industry’s overall approach to tax policy. Once again, the facts prove otherwise. Ten years ago, my predecessor at the Nevada Mining Association, along with the Las Vegas Sun’s publisher, participated with several members of Gov. Kenny Guinn’s Task Force on Tax Policy. Following the advice of a PricewaterhouseCoopers study from the 1980s, this group advised that a wide-ranging tax policy involving all business sectors should be enacted if Nevada policymakers were to determine increased revenues were necessary. Even in 2002, this group knew that relying on one or two industries was unwise.

The 2002 Tax Task Force recognized that all business sectors experience highs and lows and taxing these sectors individually would not provide a sound foundation to support Nevada’s schools and social services. As we slowly emerge from the recession, it’s hard to believe that anyone would argue for a greater and more disproportionate reliance on the largest contributors to Nevada’s economy. Those sectors include, according to the Commerce Department, accommodations and hospitality (gaming) at 15 percent of Nevada’s economy, real estate at 14 percent, banking and insurance at 12 percent, retail at 7 percent and construction at 6 percent.

And where’s mining on this list? Ninth — representing 5 percent of the state’s gross domestic product.

Yet, gaming and mining still remain targets. The current high prices for gold have benefited that segment of the mining industry, as Mr. Coolican points out. However, there are dozens of minerals producers throughout the state putting tens of thousands of Nevadans to work in sectors such as geothermal heat, lithium, copper, diatomite, barite, silver and many others. Not all aspects of the mining industry are booming, and an industry-specific tax on mining affects all of these companies – not just gold.

Despite the relative size of mining’s share of the economy and the industry’s volatility, Mr. Coolican still ignores the advice of PricewaterhouseCoopers study and the Tax Task Force and suggests that Nevada rely more heavily on commodities to fund essential state services such as education and Medicaid.

Beyond the tax revenue, the benefits Nevadans enjoy due to the tax and employment contributions provided by the mining industry can’t be underestimated during times of economic hardship. Unemployment in mining counties is around 7 percent – well below the state average of 12.7 percent – and the mines are continuing to hire.

Our industry’s position on taxes has been consistent since 2002: If Nevada policymakers determine revenue increases are necessary, the mining industry will participate along with the rest of Nevada’s business community, including the newspaper business, in the creation of a reliable tax structure. However, should policymakers instead decide to place our state’s financial security on the backs of a select few industries, those in mining won’t be the only people crying foul should gold prices fall.

Tim Crowley is the president of the Nevada Mining Association.

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