LAS VEGAS -- Across the Las Vegas valley, billboards read: "We're mining for Nevada's future."
The billboards are one way the mining industry is counterattacking claims the companies are taking Nevada's natural resources for next to nothing.
But for those pushing for higher taxes on the mining industry, hundreds of millions of dollars are at stake – money that could fix Nevada's future budget deficits.
Goldstrike
Not just the name of one of the world's largest mines in Nevada, Goldstrike also describes the record profits mining companies rake in.
Mines employ thousands in northern Nevada, but a report released this week states that southern Nevada gets little benefit from the tax payments mines are supposed to pay.
Progressive Leadership Alliance of Nevada hired a tax analyst to see whether the mine was paying its fair share.
"They paid $23 million of taxes on $1.3 billion in production," said David Kersten, the tax analyst hired by the group.
That amounts to a tax rate of about 1 percent -- far below the 5 percent written in Nevada's constitution.
Read the Study Here
The mining industry takes advantage of tax deductions for equipment and employee housing, he said.
"They aggressively claim these deductions." Kersten said. "When you actually go in and audit them, you find that they over claim these deductions."
The study, titled "Fools Gold: Why Nevada's Net Proceeds of Minerals Tax Is Not A Real Tax," reported that mining companies only paid taxes on 42 percent of the $6.6 billion of gold pulled from Nevada.
The report also showed a quarter of Nevada's 24 mines reported paying no proceeds of minerals tax, despite reporting $88 million in gold production.
The president of the Nevada Mining Association said mining companies are paying the same taxes every other company pays and are also expected to hire hundreds of Nevadans this year.
"We're growing our operations," said Tim Crowley, the mining association's president. "We're growing our supply chain and the businesses that feed the mining industry."
The mining industry's payment to Nevada's tax rolls increased 54 percent, from $203 million to $314 million, Crowley said. That includes the proceeds tax on minerals, sales tax and payroll taxes, he said.
Nevada voters may get a chance to lift the cap on mining's taxes in 2014.
Alaska
In Alaska, taxes from oil not only balance that state's budget, it also gives every resident a royalty check averaging $1,000 a year.
Crowley said that while the financials sound good, states shouldn't interfere that much in private business.
"The difference between Nevada and Alaska is that they have a lot of oil production on state lands," Crowley said. "They did leverage a royalty on that and it's had a chilling effect on the oil industry."
The new Nevada Mining Oversight Commission met last week to hear the latest tax numbers.
Mining companies are trying to convince the commission the issue isn't taxes, rather it is red tape.
"Getting through the permitting process is long," Crowley said. "It can be as long as 10 years from the point you find a mineral to bringing it on market."
But Nevada Secretary of State Ross Miller said mining companies can do a lot more to invest in the state's economy and education.
Striking Gold
The biggest mining companies operating in Nevada are Barrick Gold Corp. and Newmont Mining Corp.
Barrick bills itself as the world's largest gold miner and is posting higher profits over last year.
Like Barrick, Newmont announced record revenues this year in the billions of dollars.
Miller said that although the mining industry creates jobs in northern Nevada, the companies should move their corporate headquarters to the Silver State.
"We've clearly got to make it a focus and a priority to try to get those companies to locate many of their (headquarters) here in the state so we can take advantage of the broader economic impact that those jobs bring," he said.
