MARQUETTE — The Marquette County Board and local education and government leaders voiced their concerns Tuesday over a proposed bill crafted by Republican 110th District State Representative Matt Huuki.
They fear a severance tax bill on non-ferrous mining operations, like Rio Tinto’s Kennecott’s Eagle nickel and copper mine, could take tens of millions of dollars of tax revenue away from local government.
Representative Huuki says that’s not the case with his proposed plan. Huuki says he crafted this bill to encourage smaller mining companies to come to the U.P. He says he’s solely in support of a revenue neutral bill, one that doesn’t take any money from local governments or make any changes to the amount of revenue coming in when all is said and done. But his assurances aren’t comforting everyone.
“Throw out the bill.” A message, loud and clear, from some local government officials Tuesday, even bringing a paper shredder in tow to Tuesday’s meeting.
Huuki’s been crafting the bill for almost a year and says in its intended state, it will do great things for local communities.
“I want to make it as easy as possible, as investor-friendly as possible, to come and invest in our commodities to create the jobs that we so badly need here in the U.P.,” said Huuki.
He says the current tax system on mining operations is front-heavy, and that’s too much of a financial burden for smaller mining companies to handle in their start-up period. Huuki says he’d like to keep the amount they’re taxed the same, but spread it out over time. At the end of the life of a mine, the revenue collected by local government would be the same as it would be with the current law.
But, according to the county, they’ve done the numbers and it doesn’t add up. They passed a resolution against the bill last week. They say the townships and school districts would lose $10.2 million a year; that money would go to the state instead.
“It’s absolutely not revenue neutral. Humboldt Township has a great concern that this is a huge amount of money for our school districts, and they’re currently suffering,” says Township Supervisor Joe Derocha.
Huuki says that won’t happen; he won’t support a bill that takes revenue away from local government or the mining companies, that the discrepancy in the numbers comes from a difference in the calculations of Kennecott’s projected revenue.
“I’ve made a commitment to make this bill revenue neutral,” Huuki said. “I have to have a good feeling of confidence that my bill, by the time I’m done with it, by the end of a life of the mine, the same amount of revenue will come to the local government and our schools.”
But board members voiced concerns that the state may see a new system that is not revenue neutral as a cost saving and draft another form of the bill under a different representative that is not revenue neutral.
Some also say giving smaller mining companies the ability to pay smaller amounts in the beginning creates a greater risk of environmental damage if that same company goes broke in the process of mining the land.
The two entities have agreed to meet and discuss the matter further before Huuki officially introduces the bill in Lansing.