The Nevada Senate halted progress on a revenue-raising measure aimed at long-criticized mining tax deductions, dealing a sudden setback to Democrats after a late Thursday whirlwind of intense politicking in Carson City.
Assembly Bill 4 — born and killed over a frenetic seven-hour stretch that ended early Friday morning — would have slashed 40 percent off the value of tax breaks long enjoyed by the mining industry, including write-offs for extracting, refining, transporting, delivering and maintaining minerals dug up in the Silver State.
The measure passed the Legislature’s lower chamber on a strict party-line vote after undergoing a late amendment to avoid cannibalizing a different bill that will require mining companies to prepay this year’s taxes. AB 4 was expected to generate roughly $55 million in cash to put toward the state’s $1.2 billion budget deficit.
Progressive policy advocates offered lukewarm praise for the move as a “good first step” toward adding to the mining industry’s tax burden.
It fared much worse with Republicans “appalled” by the bill’s blitz through the statehouse, which marked the longest sustained period of lawmaking seen since the start of Nevada’s 31st special session.
That aroused suspicions among some GOP caucus members who dismissed the measure as little more than a Democrat-orchestrated political stunt. Others, including Assemblyman John Ellison, R-Elko, said it was simply a “stab in the back” to the mining industry.
Such protests didn’t delay the bill’s sprint out of the Democrat-dominated Assembly, though the measure was always expected to lose some momentum in the Senate, where Democrats remain one vote shy of a supermajority needed to raise revenue under the state constitution.
The Legislature’s top Democrats were still working to secure that vote late Thursday evening, issuing a joint statement that called on GOP lawmakers to “name a number” they’d be comfortable levying on mining corporations.
Gov. Steve Sisolak also rallied around the measure, one he said would help blunt COVID’s economic impact on residents “without adding an additional financial burden on small businesses and families.”
Tired-looking Republicans did not play along.
“I’m bothered by this bill,” said Senate Minority Leader James Settelmeyer, R-Minden. “It’s an industry-specific tax. Who’s next? … It’s not fair and it’s not right. Especially in the middle of this pandemic.”
Progressive pundits and lawmakers have long pointed to mining as a largely untapped source of revenue that could help the state weather chronic budget shortfalls.
The industry is the state’s fifth-largest source of economic activity, but accounts for just 7 percent of general fund revenues thanks in large part to a century-old 5 percent cap on mining tax proceeds.
That tax ceiling, unlike the deductions being reconsidered in Carson City, is written into the state’s constitution, and can only be changed through an arduous amendment process that would take years to complete.
Lawmakers adjourned on Friday without taking up a half-billion dollar package of state worker furloughs and budget cuts that sit at the core of Sisolak’s deficit reduction plan. They are expected to revisit those measures on Saturday.
James DeHaven is the politics reporter for the Reno Gazette Journal. He covers campaigns, the Nevada Legislature and everything in between. Support his work by subscribing to RGJ.com right here.