Gov. Jim Gibbons’s spokesman, Daniel Burns, today said the governor is open to repealing some of the generous tax deductions that the mining industry in Nevada enjoys, potentially opening a new source of revenue for the state in one of its most dire economic hours.

The news won’t be embraced by the mining industry, which is allowed under state law to write off much of the cost of digging precious metals from the earth, processing them and even marketing them to buyers. (Nevada Mining Association President Tim Crowley couldn’t immediately be reached for comment.)

But Burns noted the rate of taxation — 5 percent of the industry’s net proceeds — will remain unchanged in the state constitution, and only the amount the industry is allowed to deduct will change.

“It’s not a tax increase if you eliminate deductions,” Burns said.”He’s [Gibbons] not raising the tax rate. The tax rate remains the same.”

“You’re bringing mining into a situation where it’s more fair,” he added. “Mining gets special treatment in this state.”

Burns said Gibbons tried to stress in his State of the State speech delivered Feb. 8 that circumstances in Nevada had changed, and so must its government. That also applies to mining tax policy, Burns said. “Things are different now,” he said. “These laws might have had a time. But the time has passed.”

The mining industry is also being targeted with an initiative to amend the constitution that would lead to increased mining taxes. The measure, filed by the Progressive Leadership Alliance of Nevada, would change “net” to “gross” in the constitution and specify the tax rate be “not less than 5 percent” instead of its current language, “not more than 5 percent.” The mining association has sued to prevent organizers from circulating that measure.

Burns said negotiations over how to eliminate an $871 million budget gap continue, and in at least one plan, the deficit is completely covered. Gibbons intends to sign a proclamation outlining the agenda for the Feb. 23 special session on Tuesday.

In talks between legislative leaders, senior Gibbons staff members and fiscal planners from the Legislative Counsel Bureau, tax increases have not been discussed, Burns said. “We don’t even discuss raising taxes because we’re not,” Burns said. He noted that even liberal Assemblywoman Sheila Leslie, D-Reno, said recently that there aren’t enough votes to pass a tax increase.

“When the governor and Sheila Leslie agree that now is not the time to raise taxes” it’s a fairly settled matter, Burns said.

In fact, at least two lawmakers — Assemblywoman Peggy Pierce and state Sen. Bob Coffin, both D-Las Vegas — have suggested raising taxes to cover at least part of the deficit, but their ideas have not been embraced by fellow lawmakers. In Nevada — thanks to an initiative championed in the 1990s by Gibbons — the Legislature must get two-thirds votes in both houses to raise taxes or create new ones.

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