One more time

While we sometimes take on Reno’s daily on its news coverage, we generally skip trying to counter its editorials. They are usually fairly bland, so responses are unnecessary.

But the Reno Gazette-Journal’s Jan. 27 editorial is so poorly informed that it distorts a major proposal for solving the state’s desperate financial situation.

What’s at issue is the initiative petition being circulated by the Progressive Leadership Alliance of Nevada (PLAN). If approved by voters, it would amend the state constitution to include at least a 5 percent tax on gross proceeds of mines, instead of the current tax of no more than 5 percent of net proceeds.

The Gazette-Journal argues, “It’s wrong to target any one group of people or businesses for a tax increase while others escape scot-free.”

Nevada and the federal government have for decades targeted the mining industry for tax loopholes. The industry was built on tax breaks. The list of federal exemptions, depreciations, write-offs, and sweetheart fees from which the industry benefits is a textbook abuse of the tax code. If mining can be targeted for a free ride for more than a century, it can now be targeted for taxes.

It’s worse in Nevada, where mining lobbyists convinced the second Nevada constitutional convention to include a loophole for the industry in the Nevada Constitution. That particular ploy is the reason PLAN must try to amend the constitution instead of a statute, which would be less burdensome for its members.

Then there’s the nature of the mining industry. There is no Nevada mining industry. It’s principally a Canadian industry. Every major mining company is based either out of state or abroad. The industry is a big pipeline that ships the state’s riches elsewhere, “making others wealthy and places elsewhere great,” as former governor Richard Bryan once put it. That’s fine, as long as the industry pays its way. It does not.

Citizens and other businesses must pay higher taxes to make up for the mining industry failing to pay its share, so the Gazette-Journal’s “scot-free” argument is a gross distortion of reality.

The newspaper also argues that the Nevada Legislature should first be given a chance to reform the state tax system. PLAN has already jumped through the hoops the RG-J demands. As it did with its 2008 Washoe County water ballot measure, PLAN went to the legislature with its mining tax plan and only then went to the initiative petition.

The RG-J claims that 1981 was “the last time the Legislature made major changes.” In fact, 2003 was the last major tax overhaul. But both 1981 and 2003 saw tinkering, not systemic reform.

The legislature commissioned a sweeping study of the state tax structure in 1987-89, which was delivered by the Urban Institute and Price Waterhouse and then ignored. The state experienced recession-related budget crises in 1981-82, 1991-92, and 2001-02, each time being warned to reform its tax system and each time failing. Each of those occasions were missed opportuities. Now the RG-J wants PLAN to trust the legislature just one more time.

As those readers familiar with our past editorials know, we think initiative petitions are lousy lawmaking. But the process is there to be used, and as long as it is, its users are entitled to fair and accurate analysis of that process. The RG-J editorial is not a good sign that this election year’s public dialogue will see that.