By Ryan Ekvall | Wisconsin Reporter
Wisconsin Republicans on Monday moved closer to completing their declared No.1 job this session: Clearing the way for potential mining jobs in the Penokee Hills.
The contentious mining regulatory reform bill cleared another hurdle in the legislative process, moving past the Joint Finance Committee on another party-line vote.
The JFC was businesslike in passing the bill through in a mere two hours – relative a blink compared to the recent 12 hour-long public hearing and almost six hour-long Senate Workforce Development, Forestry, Mining, and Tourism Committee hearing a few weeks earlier.
“This mining legislation has been two years in the making. Since then, this is the 12th different hearing or public opportunity for input. I’m tallying 70 hours all told in public input on this bill,” said Rep. John Nygren, R-Marinette, the JFC Committee co-chairman.
The committee adopted amendments passed earlier by the Mining committee, and rejected new amendments offered by Democrats. Several of those amendments were similar to those proposed by Democrats last session.
Democrats still hate the bill. Republicans are generally ready to move.
“In some ways I feel like Bill Murray in the movie Groundhog’s Day, because here we are a year later talking about the same things we were talking about last February,” said Rep. Cory Mason, D-Racine.
Indeed, arguments put forth by both sides have been essentially the same over the past two years.
Democrats decry relaxation of environmental standards they say are included in the mining legislation – a so-called “giveaway to one out-of-state corporation.” Republicans say the environmental protections remain largely in-tact and champion the economic benefits a mine would bring.
Gogebic Taconite, LLC, a subsidiary of the Florida-based Cline Mining Group, has expressed interest in a $1.5 billion mining operation in the Northwoods region, if the state reforms its mining permit process. A Northstar Economics analysis projects 700 mining jobs and several thousand ancillary jobs created if a project were approved.
The non-partisan Legislative Council said a number of environmental standards are “generally unchanged” in the bill.
Those measures include air, groundwater and drinking water quality standards. The federal Army Corp of Engineers and the Environmental Protection Agency, in addition to the state Department of Natural Resources, would have to sign off on a proposal before it could move forward.
Mining and Taxes
Democrats also have asked for a gross tonnage tax to be added to the legislation. They feel the net proceeds tax under current law will not generate enough revenue for potentially impacted areas.
As part of the agricultural and manufacturing tax credits set to phase in over the next five years, any mining company would be virtually exempt from corporate income taxes – currently at 7.9 percent.
The tonnage tax, proposed by Sen. Tim Cullen, D-Janesville, would tax the ore extracted from a potential mine site. A net proceeds tax assesses the sales a mining company makes after deductions for expenses such as labor, equipment and depreciation.
That revenue would be split 60/40 between the Mining Investment and Local Impact Fund and the state’s general fund.
Grover Norquist, president of Americans for Tax Reform, the group synonymous with the Taxpayer Protection Pledge, in a recent letter gently reminded Republicans mulling over the tonnage tax idea not to break their no-tax promise. He said instituting a tonnage tax would violate that pledge.
No Republicans approved the tonnage tax offered by Democrats in the JFC meeting.
Locally impacted communities have other protections built into the mining legislation. They receive three “notice of intent” payments up to $75,000 each for legal fees to negotiate a local agreement with a mining company.
They receive hundreds of thousands more dollars in managed forest land payments, first dollar payments and up-front construction fees.
“There are really significant revenues outside of the net proceeds tax because it’s such an economic engine,” Sen. Tom Tiffany, R-Hazelhurst, author of the Republican Senate bill, told Wisconsin Reporter. He projects additional sales tax revenue and increased property values as a result of a mine operation.
For some Northwoods residents, the tax revenue is secondary.
“The primary benefit is not the net proceeds tax, it’s jobs,” said Leslie Kolesar, chairwoman of the Iron County Local Impact Committee. “We have an11.9% unemployment rate in Iron County. Jobs is the number one benefit.”
Environmentalists charge the legislation is a bad deal for the region.
“The bill passed by the Joint Finance Committee today contains dozens of environmental rollbacks that leave Wisconsin’s water resources at risk,” Amber Meyer Smith, government relations director at Clean Wisconsin said in a statement. “This bill was written by and for a single out-of-state mining company and seeks to increase company profits at the expense of the safety and welfare of Wisconsin residents.”
The Senate is expected to take up the bill Wednesday.
Sen. Dale Schultz, R -Richland Center, was the lone GOP dissenter on a similar mining bill last session, effectively killing the legislation. Schultz is not on the Joint Finance Committee.
It would appear Democrats need more help to halt legislation this session.
Republicans added two more Senate seats since last March, including Tiffany. Sen. Rich Gudex, R – Fond du Lac, another freshman GOP senator, is a co-sponsor of the bill.
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