Grover Norquist, the powerful Washington, D.C., conservative and anti-tax crusader who has gained national fame by recruiting politicians to sign his no-tax increase pledge, has weighed in on the heated debate over proposed changes to Wisconsin's mining laws.
Norquist, president of the group Americans for Tax Reform, sent a letter to Wisconsin legislators Wednesday warning that they would be breaking their pledge not to raise taxes if they support a Democratic proposal to replace a tax on mining company earnings with a tax on iron production, called a tonnage tax.
A total of 21 state legislators have signed the pledge, according to Joshua Culling, ATR's Wisconsin manager.
Legislators received the letter Wednesday after State Sen. Scott Fitzgerald, R-Juneau, told a Wisconsin business group that Republicans oppose a tonnage tax that has been proposed in an alternative mining bill introduced by State Sen. Tim Cullen, D-Janesville.
Fitzgerald, Senate majority leader, told members of the National Federation of Independent Businesses that such a tax would constitute a new tax and "go completely against everything we have worked for over the last two years to state that Wisconsin is open for business."
The GOP mining bill instead includes a net proceeds tax, which would tax a mining company's earnings rather than the amount of iron being mined. Current mining law also includes a net proceeds tax, though the GOP bill would change current law so that 60 percent rather than 100 percent of those tax dollars go back to local communities affected by mining.
An alternative bill, introduced by State Sen. Tim Cullen, D-Janesville, includes a gross tonnage tax, similar to the tax on Minnesota mining companies and would make 100 percent of the tax dollars available to local communities. Cullen and other Democrats argue that the tonnage tax is more fair to local communities because it provides money during the early stages of a mining operation for such local needs as roads, school improvements, housing and law enforcement. Cullen also added that when combined with changes to the corporate income tax passed under Walker, the use of the net proceeds tax would result in a mining company paying dramatically less in taxes.
Officials with Gogebic Taconite, the company that wants to build a $1.5 billion open pit iron mine in the Penokee Range in northern Wisconsin, have indicated that they do not support a change to a tonnage tax.
Fitzgerald said instituting the tonnage tax "sends the wrong message" to the company. He also said any rewrite of mining laws that includes a tonnage tax would likely be vetoed by Gov. Scott Walker.