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Know the West

Buy buy ballot

Nevada mines squash tax hike


This spring, it looked as though a ballot initiative to raise taxes on Nevada's hardrock mining industry might actually succeed: With the state sliding toward bankruptcy and gold mines booming -- Nevada produces three-fourths of this country's supply -- the measure to impose a 5 percent severance on the industry's gross earnings had the support of close to half the state in last-minute polls. Nevadans were even buttonholing legislators in grocery stores to ask whether they'd make the state's multinational gold-mining companies pay up. And most people thought they should.

None of them, however, will get a chance to express that opinion in November's general election. On June 14, members of the Progressive Leadership Alliance of Nevada (PLAN), which sponsored the initiative, announced that they had secured only 66,000 of the 97,002 signatures they needed to get the measure on the ballot. Says PLAN executive director Bob Fulkerson (an HCN board member), "We just didn't have the money to pay people" to get more.

That's right, circulating petitions costs money: Signature-gathering is a full-time job that in the run-up to an election season commands premium rates. Firms such as the Denver, Colo.-based Lamm Consulting and Kimball Petitions in Westlake Village, Calif., typically charge a dollar or two per signature, but when time is running short, the price can climb as high as $10. The signatures of 97,002 people -- 10 percent of the voters who showed up for Nevada's last general election -- were always going to cost PLAN at least $100,000.  And that's just if everything went smoothly.

Which, of course, it didn't. Last winter, the Nevada Mining Association challenged the legality of the initiative, which would have nullified the Net Proceeds of Minerals Tax enshrined in Nevada's Constitution since 1865 -- a law that allows mining corporations to deduct operating expenses from their earnings before calculating their state tax debt. The mining lobbyists lost, but the judge still forced PLAN to rewrite the measure and throw out its first 12,000 costly names.

By then, PLAN's signature-collecting time was almost up. And the nonprofit, which promotes economic justice in its obstinately tax-averse state, was too broke to afford the last-minute push by professional petition-circulators necessary to finish the task.  "They were going to need to put 300 people on buses and fan them out across the state," Fulkerson says. "That drove the price up to a half-million dollars."

If that sounds to you like a perversion of democracy, you're not alone: Ever since lawmaking by statewide initiative debuted on the Oregon ballot in 1904, partisans have hotly debated the merits of paying for signatures. One side argues that the First Amendment guarantees one's right to buy names; the other insists that the practice gives the well-heeled and funded an edge in controlling politics in those 24 states -- all but seven of them west of the 100th meridian -- where ballot initiatives make law.

Would that the issue broke down so simply. Several states prohibit pay-per-signature contracts, but by law they can't ban professional petition-circulating altogether -- the U.S. Supreme Court declared such bans unconstitutional in 1988. So while Oregon's Measure 26, passed in 2002 and upheld by the 9th Circuit Court in 2006, forbids paying workers by the signature, it can't prohibit hiring professionals by the hour, day or month, whether they collect names or not. Its effect has been to more than double the cost of qualifying a ballot initiative in the state, killing grassroots efforts altogether.

Mason Tvert, co-founder of the pro-marijuana nonprofit Safer Alternative for Enjoyable Recreation (SAFER), joined libertarian activists in challenging a law passed in Colorado last year, which limited per-signature payments to 20 percent of signatures gathered. The law not only increased the cost of professional services, Tvert says, but made it impossible to incentivize volunteers at a few cents per name.

A federal judge put a hold on the Colorado law last month, "but it came a little too late for us," says Tvert, who has deferred until 2012 his plan to get a measure on the Colorado ballot legalizing marijuana. "We only had 35 days left before the deadline. It was too much of a risk and too costly."

PLAN has given up on its ballot initiative effort for now, and has vowed instead to take the fight for a higher mining tax to the 2011 Legislature. Lawmakers in the past have resisted such a move, but that was before the gambling and sales tax revenues that pay the state's bills crashed, and before the state's budget director, Andrew Clinger, forecast a $3 billion hole in the state's next biennial budget. And with gold prices shooting past $1,000 an ounce -- meaning a 5 percent gross tax could yield $300 million a year -- the state may begin looking at its mining industry less as a sacred cow and more as a golden calf -- one that lawmakers might have to slaughter to survive.