By Lucia Starbuck and Jeri Davis
Nevada lawmakers have spent the last few days of special session looking for ways to collect additional revenue to offset the $1.15 billion deficit in the state’s general fund before making a final decision on Assembly Bill 3, which cuts hundreds of millions of dollars from health services and education.
On the ninth day of special session, the Senate and Assembly were scheduled to gavel in at 9 and 10 a.m., respectively. Instead, lawmakers met behind closed doors for a majority of the day, until 7 p.m. when the Assembly introduced, added an amendment and voted within three hours on a new bill, Assembly Bill 4, to reduce deductions from mining companies.
Traditionally, mining companies are able to take deductions from the amount of taxes they must pay. With AB4, mines were proposed to cap their deductions including write-offs for extracting, refining, transporting and delivering minerals at 60 percent, which was expected to bring an additional $54.7 million into the state’s General Fund.
Democrats in the Assembly supported the bill, but Republicans in the Senate voted against it, successfully killing the measure.
Legislators were provided with informational handouts from Legislative Counsel Bureau staff detailing the mining industry’s tax history. Assembly member Teresa Benitez-Thompson (D-Washoe County) used the information contained therein to question some of her colleagues’ references to mining as a highly speculative industry.
“We’ve heard some mention on the record talking about the kind of speculative nature of this industry, the fragile nature of this industry,” Benitez-Thompson said. “But as I look back on page seven of the annual net proceeds of tax and revenue—if we look at the annual net proceeds, but then we also look at gross, except for a handful of exceptions, year over year the gross that the industry pulls in increases…And we see that in graphs. And we see that in charts. We see that in 48 years of history that I can see in just this one document…Is ‘fragile’ or ‘speculative’ the correct adjective to describe that kind of industry? Or, I should say, I would not use the words fragile or speculative to imply that kind of industry.”
Additionally, Republicans in the Assembly criticized how quickly the bill went through. Democratic Speaker Jason Frierson said mining businesses were notified earlier in the day.
The measure was overwhelmingly supported by those who provided public comment, with a majority of them identifying themselves as Nevada teachers and education and health care advocates. Over the past week, these groups have been demanding that revenue be taken from mines rather than cut from education and health care services. Many of them repeated the refrain “Be bold, Nevada” in summing up their comments to legislators.
Alexander Marks, a member of the Nevada State Education Association, said, “I’ll keep it simple. It’s a good bill, and you should pass it. Thank you.”
Christine Saunders, who called on behalf of the Progressive Leadership Alliance of Nevada noted that her organization had been pressuring Nevada legislators to take action on reforming mining taxes for two decades.
“Under these unprecedented circumstances caused by a global pandemic, it is clear that we must call on those who profit off their land to step up and pay their fair share,” Saunders said. “For the past week, we have heard testimony after testimony against the disastrous cuts [proposed in AB3] that would hurt children, working families and the most vulnerable of Nevadans. You’ve also heard over and over that the state needs to take real action on revenue reform. I want to thank the Assembly for listening to the concerns of your constituents to take bold action and reform mining deductions instead of simply balancing the budget on the backs of our communities.”
AB4 passed in the Assembly and then was kicked to the Senate, but did not receive a two-thirds vote in its favor. The bill failed at about 3 a.m.
However, it should be noted some money will be taken from mining through a different bill that has already passed both houses of the legislature.
Senate Bill 3 temporarily requires mining companies to pay half of their taxes up front, based on five percent of their estimated revenue for the upcoming year, until 2023. That half of the revenue will be swept into Nevada’s General Fund, whereas the other half of the taxing revenue will still be collected at the end of the year, and go to local governments. This revenue will bring more than $58 million into the state’s General Fund.
The measure also sweeps the state’s entire Governmental Services Tax, which is collected from car registration fees, into the state General Fund, for a total of about $71 million. SB3 originally proposed to put half of the revenue into the General Fund, and the other half into the Nevada Department of Transportation’s (NDOT) Highway Fund, which is used for construction, maintenance and repair for public highways.
SB3 also re-introduces a tax amnesty program, which hasn’t been done in 10 years, and about $21 million is expected to be generated from the initiative.
Citizens protest higher taxes outside
Early in the day on Thursday members of the group Americans for Prosperity, Nevada showed up for a demonstration outside of the legislative chambers. The public has not been allowed inside the building as a precaution against the spread of COVID-19, so the group instead planted American flags and signs bearing the names of those who’d signed a petition to protest the raising of taxes.
Marcos Lopez, the group’s community engagement director, said the signs represented some 1,500 signatures.
“There’s a lot of calls right now for new revenue and revenue increases, which is just a fancy way to say more taxes,” he said. “And we feel that [it] is not the right time to raise taxes at this moment, especially with so many Nevadans struggling across the entire state. And really the whole country right now is really facing a major downturn. And this is a serious virus and a serious concern. And we need to make sure that we don’t put more barriers on people.”
As an alternative to new taxes, Lopez said his group hoped legislators would find places to cut “unnecessary spending.”
Had he been able to go into the building to speak with legislators, Lopez said his request would have been simple: “Don’t raise our taxes.”
“I mean, it’s quite a simple message,” he said. “This is the wrong time. Too many people are struggling. We have record high unemployment, and the economy is regressing in their terms of opening…Make sure we have the ability for all of us to achieve prosperity.”