Thanks again, Harry

It's exactly because nobody cares that the Gleaner's column in CityLife this week is about Harry Reid's strong and unwavering commitment to protecting corporate welfare for the mining industry at the expense of his constituents:

... If more Nevadans knew about it, they'd be demanding Reid explain why he's using his lofty perch in Congress to deprive his state of tens of millions of dollars each year.

The column takes a looky-see at gold production levels, the impressively bloated earnings statements of a couple of the biggest mining giants and the provisions in the reform bill passed by the House earlier this month and that Reid is dead-set against. If the House bill was already law, mining royalty revenues returned to Nevada in 2006 to (as the legislation puts it) "provide assistance for the planning, construction, and maintenance of public facilities and the provision of public services" would have totaled a conservatively estimated $44 million:

For those keeping score at home, yes, that is in the neighborhood of the amount that the nation's worst governor wants to cut from the budgets of child welfare, juvenile justice, health care for the poor, mental health programs and other health and social services each year for the next couple years.

Also under the House bill, at least another $44 million, and probably much more, would be returned to Nevada to clean up old abandoned mine sites.

After the column was sent to the paper a few days ago (print deadlines; how quaint), it became clear that Reid is not content with merely making sure that the House bill is DOA in the Senate. He's also getting Democratic presidential candidates to promise that if elected, they, like Reid, will assure that the American public continues to give corporations billions of dollars worth of gold for free.

Or close to free — the industry/Gibbons/Reid-supported idea of mining "reform" has traditionally favored a royalty modeled after Nevada's "net proceeds" tax.

Nevada's net proceeds tax rate is 5 percent, and the companies have gotten very, very good over the years at creatively inflating their costs so as to whittle down their tax burden even under that teensy, modest rate (Nevada consumers pay a higher tax rate when they buy clothes for their kids). For instance, in 2006, Nevada gold, silver, copper and other mineral production was valued at more than $5 billion. The state collected $61 million on that production, a little more than 1 percent of the value of the minerals.

By the time mining companies get done puffing up all their expenses and manipulating their balance sheets and whining to government officials about how tough it is being a giant transnational conglomerate, the royalty revenues under the Reid/mining industry approach would be just as negligible and insignificant to the public as they will be to the companies.

Since the start of 2006 and through June 30 of 2007, mining giants Barrick and Newmont have spent $1.24 million and $1.43 million, respectively, convincing Congress to let the companies continue to have as much of the public's gold as they can possibly mine without paying for it, according to lobbyist disclosure reports. This year, Denver-based Newmont even put a Nevada-headquartered firm, R&R Partners, on the payroll. R&R mastermind Billy Vassiliadis is a Nevada consultant for Obama, which must have been very convenient earlier this week when the candidate was preparing his apologia for giving away the public's gold to corporations.

Spending money on lobbyists is an awfully smart investment by the companies. Assuming that some "compromise" is forged between the Reid/mining interests and the hapless American public, the companies are going to get a watered-down "reform" bill that may not merit much more than footnote in their financial reports to shareholders.

And Nevada will continue to be deprived of the substantial revenue streams enjoyed by states where coal, oil and natural gas producers pay not 5 percent on net (Nevada's state rate) or even 4 percent on gross (the rate in the House bill that Reid hates) in federal mineral royalties, but well-head and mine-mouth rates approaching 12 and even 16 percent. Nevada may someday begin to collect, at best, a comparative pittance.

Which, apparently, is exactly how Reid wants it.

Again, and as always, Harry, thank you so very, very much.

Comments

[MikeZahara]

Yet another terrific picture! Everyone will be using these next year and beyond!

I supposed we should thank him for the 'kill bill' for Yucca now too and delivering the worst congressional approval rating in US history.

What a year!

[medeak]

pray tell...rural NV tries to make a living and survive while Vegas is stealing our water
You are so fortunate to have gaming...do you realize how hard it is for our small towns to survive on mining? And how fragile our economies are?

[MikeZahara]

That's why I support the new power plants and I do support mining jobs too, but why shouldn't we also get a royalty for our mineral wealth here?

The global demand for gold and other minerals is evident in their trading prices and someone is getting rich and its not you or the state of NV.

[medeak]

Where was everyone when gold was under $200 an ounce and we were all starving? We finally get to diversify with planned moly mine (used to coat stainless steel) but the proposed rate will stop construction as they only have an 8% profit. It's a complex issue and all mines should not be lumped together in one firm tax. Granted we all agree that mining reform needs to be done...as usual most are uninformed. Am Vegas native and can see how radically different we all are across the state. Unfortunately Vegas thinks (sometimes imo) that they are the only ones coffering to state funds.

[medeak]

forgot to say...this is an enormous planned mine with life to 2040..the gold mines only have a short life span left. So I suppose it's just one more thing we should be buying from China..and that helps us how? Have you driven through Ely the last 15 yrs seeing it boarded up? They are finally coming alive again. None of our children stay as no jobs here...all we're asking is to keep our jobs.

[medeak]

My Mom taught at Basic High School in Henderson when Harry Reid was attending taking the bus from Searchlight. Everyone knows the story how his dad commited suicide when the mine closed. My Mom still can't get over him taking that long bus ride each day and becoming student body president not telling anyone of the tragedy his family went through. He understands the fragility of the mining community.

[Isn't it Ironic?]

Isn't it ironic that gold mine town loving Reid lead the charge to reform bankruptcy. When mining finally dwindles out, how many lives will go downhill in Rural Mining Nevada once the corporate greed and its executives leave town and Nevada? How many suicides? Ironic.

[MikeZahara]

Ironic indeed. I don't think his staff tracts the inanity coming our of his mouth and positions and actions. The GOP is just going to kill us with the garbage out of his mouth.

..umm...it's China and the under-valued Quan that is driving the prices.

We're China's bitch...they own us, the world's largest debtor nation.

medeak,

"Where was everyone when gold was under $200 an ounce and we were all starving?" Not born yet, I quess!

Cripes, gold around $200 an ounce back in 1974. What was the population of Nevada in 1974? Less Clark County, it was 261,774 with 3,500 employed in all of mining.

$200 an ounce was a fistful of money in 1974! "What cost $200 in 1974 would cost $876.70 in 2006.

"Also, if you were to buy exactly the same products in 2006 and 1974,
they would cost you $200 and $45.63 respectively."
[westegg.com]

[medeak]

gold was cheap just a few short years ago. We have a reverse economy in rurals re gold and thanks to the present administration destroying the value of the dollar overseas gold has soared unbelievably. Believe me..I know...my son studied in England last year. $16 for a Burger King hamburger. It will be short lived as always..gold is an unbelievably volatile market and I won't even invest in it. We're hoping for some diversification and stability re new mine for molybdium. Am just trying to inform that the present bill that was passed in the house doesn't account for all mines and how different they all are and price fluctuations. Reid and Obama know it's a complex issue and not black and white...just like everything else. for example your water issue... peace

[medeak]

forgot to add...isn't it ironic I believe to be a dear friend of mine who's spouse has done very well investing in gold mine stocks the last two years.... now THAT'S ironic! ;-)

[KICKBOXERMOMMA]

MZ are you referring to the coal based power plants?