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Smoke free in Maryland

After MGM Resorts CEO Jim Murren promised—four days before the election—to build a new casino in Maryland if Maryland voters approved expanded legal gambling, and after his company spent $90 million on a campaign to win that approval, he got his way.

Maryland Ballot Question Seven was approved by 52-48 percent statewide and 59-41 percent in Prince Georges County, where the structure will be built. Both state and local voter approvals were needed.

The corporation promised the casino will not look like a casino, that it will fit into the environment and won’t be a big box. “There would be zero neon, and no marquee sign. … not something that is garish or flamboyant,” Murren said.

The Nevada office of Smoke Free Gaming of America quickly issued a statement pointing out that MGM apparently believes it can thrive in Maryland even though smoking is banned from gambling establishments there.

“This MGM Resorts property will be smoke free!” said a statement from the group. “All gaming in Maryland and any expansion of gaming must be smoke free.”

The group has long argued that the gambling industry’s claims that smoking bans hurt their businesses are inflated.

Ghost voting claim repeated

On Nov. 1 a lawyer for the Republican National Committee sent a letter to Nevada Secretary of State Ross Miller and the secretaries of state of five other states asking that voting machines be recalibrated because in early voting they were registering votes cast for Mitt Romney as votes for Barack Obama.

The lawyer, John Phillippe Jr., gave no substantiation for the charge. This is the same attorney who earlier this year threatened to overturn the delegate results of Nevada’s Republican state convention.

Phillippe wrote that there were “media and citizen reports of voting machine errors taking place in your states,” but did not provide them. One such incident in Washoe County was reported by voting officials and was solved by recalibrating the machine.

A similar claim was made about the 2010 Nevada U.S. Senate election but went similarly unsourced and unsubstantiated, and a joint state/FBI probe turned up nothing.

Late game hit

Two years ago, Las Vegas real estate man Danny Tarkanian entered the race against U.S. Sen. Harry Reid, but lost the Republican primary to Sharron Angle. Tarkanian came in third.

Tarkanian’s mother Lois had supported her son in the primary but then switched to Reid. At one news conference she criticized Angle for her views on stay-at-home parents. “I was not a better mother when I stayed home full time,” Tarkanian said.

So she was taken aback at the end of the campaing when Reid tore into her son Danny, then running for the U.S. House.

The Federal Deposit Insurance Corp. is trying to seize assets from the Tarkanian family against a $17 million judgment in a failed land deal of Danny Tarkanian, who led in polls for the House seat against Democrat Steven Horsford at the end of the campaign.

Reid called a news teleconference to tell reporters, “The question is how can voters trust him to tackle major issues in Congress—our nation’s debt is an example—if he can’t handle his own finances?” Lois Tarkanian decided to respond herself, saying that she had once urged her son to seek counsel from Reid on the case. “He [Danny] felt that Harry would try and hurt us,” she said. “And I was the one who said Harry wouldn’t do that.”

Lois Tarkanian, sometimes considered the “real” Tarkanian, has an education doctorate and has been a teacher and speech pathologist. She was elected to three terms on the Clark County School Board and now serves on the Las Vegas City Council. —Dennis Myers

Golden loophole

Amendment to level tax playing field could die

Whether the mining industry’s tax loopholecan be pried out of the Nevada by Constitution now that its principal Dennis Myers advocate, Sheila Leslie, has been defeated in her state senate race is very much on the minds of mining lobbyists. The industry poured money into the campaign of her opponent, Greg Brower, and other legislators of both parties. Among the contributors to Brower were Coeur d’Alene Mines, Barrick Goldstrike Mines Inc., Kinross Gold U.S.A., Inc., Newmont Mining Corporation, Nevada Mineral Exploration Coalition, the Nevada Mining Association Inc. Political Action Committee, Nevada Mineral Exploration Coalition. Newmont is the only U.S.-based mining corporation on the list. Other funds also flowed indirectly from the mining corporations, such as $50,000 two of them gave to Gov. Brian Sandoval, who then contributed

Information on to legislative candidates from his own

S.J.R. 15 can be campaign fund. Brower received atfound at http://tinyurl.com/ b7y3yvn least two $5,000 payments from Sandoval. And there are a number of contributions from anti-environmental groups like the Conservancy Trust. Leslie worries her defeat will serve as “a warning to other legislators that if you take on the mining industry you are courting defeat.” Whether the effort for repeal of the loophole will have the same momentum without Leslie to push it is causing concern for its supporters. She said, “That’s a good question. Without Steven Horsford or me there, I’m not sure, frankly.”

Horsford, the Senate Democratic floor leader, was elected to the U.S. House.

Mining is the only industry with a tax loophole written into the state constitution. Laundries, restaurants, and auto repair shops all do without such protection.

This tax break is a product of Nevada’s second constitutional convention, which met in 1864 and included language that prohibited taxation of the gross proceeds of mines, limiting such taxation to net. The section reads in part, “The legislature shall provide by law for a tax upon the net proceeds of all minerals, including oil, gas and other hydrocarbons, extracted in this state, at a rate not to exceed 5 percent of the net proceeds. No other tax may be imposed upon a mineral or its proceeds…” Only one other state—Alaska—shields mining corporations from taxes that way.

Since most mining companies, both then and now, are based outside Nevada—and now are mostly based outside the United States—that constitutional language sent tens of millions of dollars in capital out of the state, and continue to do so. For decades Nevadans have groused that Comstock Lode riches built San Francisco.

Even with that loophole, the mining corporations considered themselves overtaxed. In the 1870s major mining companies flatly refused to pay their state taxes. The state had to take them to court, and the scofflaw corpo-

The election defeat of Sheila Leslie has thrown into doubt the future of one of her major pieces of legislation, a measure removing privileged status from the mining industry.

rations took the case all the way to the U.S. Supreme Court (Forbes v. Gracey, Consolidated Virginia, Mackay and Fair) before finally being forced to pay. Then they refused to pay the penalties, prompting another court battle. In the end, however, they triumphed because they pushed legislation through a malleable Nevada Legislature giving them new deductions for mining expenses—the amount of which suddenly rose sharply, at least on paper. Those deductions, poorly audited, cost the state millions over the decades.

In addition, until relatively recently, mining was not held accountable for the environmental damage it caused. It was legal for corporations to walk away from exhausted mining sites. The state is pockmarked with nasty ecological hazards that became the responsibility of federal, state and local governments when the mining companies shut down and departed. In 1999, under the sponsorship of Washoe Assemblymember Vivian Freeman, the state finally enacted a law regulating mining in the environmental field.

Efforts to change the protective laws for industry always came to nothing until 2011, when Leslie won enactment of Senate Joint Resolution 15, which would repeal the loophole from the Constitution. Brower voted against repeal.

At the same time, lawmakers limited deductions and imposed greater oversight and auditing of the industry’s sometimes scandalous deductions, and revoked the power of mining corporations to condemn private property.

Repealing the constitutional loophole must go through two legislatures before the public votes on it, so it must be approved again in 2013. It would then go to voters in 2014.

After lawmakers went home in 2011, the mining lobby went to work trying to undercut A.J.R. 15 in the minds of legislators. They claimed that if the constitutional language was repealed, that would leave the state without any mining taxes coming in until the 2015 legislature met and reinstated.

That argument seemed to be having an impact. In October, for instance, Democratic senate candidate Justin Jones of Las Vegas, was quoted telling the Las Vegas Sun, “My visceral reaction is, ‘Why is mining deserving protection in the constitution?’But if we simply took the provision out of the constitution, mining companies would pay less in taxes. That’s not the result that we’re looking for.” Jones was elected.

In fact, the problem is easily remedied. The 2013 legislature can—and, if it approved S.J.R. 15, presumably

that would instantly reinstate the taxes if the loophole was repealed by voters. The power of the Legislature to enact legislation that does not take effect until a later date is well established.

Even if the lawmakers did not provide that kind of backup, repeal of the loophole would only leave the industry untaxed for a few weeks.

Perhaps more influential in affecting legislative votes has been mining money going into campaign treasuries. Democrats are no different than Republicans when it comes to political contributions making them weak in the knees, and the industry has had a year and a half since the first-round enactment of S.J.R. 15 to work on lawmakers.

If the Democrats hold firm on A.J.R 15, it will likely pass. In 2011, two Senate Republicans joined all the Democrats to provide a 13-8 vote in the 21-member house. In the Assembly every Democrat and one Republican voted for the measure, producing a 27-15 vote in the 42member house.

“I’m sure the mining lobby is determined to kill it,” Leslie said. “There is enormous pressure from the mining industry.”

Moreover, advocates of repeal have had trouble keeping the issue defined as they would like—on whether mining should have a privilege in the state constitution that other businesses do not enjoy. The industry prefers to make it a taxation issue.

Nevada Mining Association president Tim Crowley, in a letter to the editor to the Reno Gazette-Journal during the campaign, wrote, “During her recent debate with State Sen. Greg Brower, Sheila Leslie repeated her campaign cry that Nevada mines aren’t paying their fair share. … She knows that despite mining providing only 1 percent of the state’s workforce and 4.4 percent of Nevada’s economic output, the industry contributes a disproportionately large 8.3 percent of the general fund. … Yet, Leslie’s drive for office trumps the use of facts or a focus on growing the economy.”

Former state archives administrator Guy Louis Rocha responded with his own letter, arguing that the issue is not whether mining pays or how much, but whether one industry should have privilege that other industries do not: “Nevadans are hard-pressed to put the issue on the table when mining enjoys a tax policy that is outlined in the state Constitution. … Most other businesses in Nevada don’t enjoy a constitutional buffer when it comes to tax policy.”

The industry describes itself as important to the Nevada economy. Economists have said that though it is important to the economies of some small counties, it is a blip on the radar of the state economy, particularly when so much of the capital realized goes out of the country. Its importance is enhanced in hard times when the price of minerals rise, but that is not the normal situation. Ω

“Mining put huge amounts of money into campaigns on both sides of the aisle.”

Sheila Leslie Washoe County Democrat

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Dicey

During a storm last week, dozens of tractor trailers pulled to the side of Interstate 80 between Colfax and Blue Canyon on the eastern slope of the Sierra to chain up. Smaller vehicles could avoid chains if they had four-wheel drive but were limited to 30 miles per hour on the freeway.