State Sen. Scott Fitzgerald, R-Juneau, told a Wisconsin business group Wednesday that Republicans will refuse to consider any change in proposed mining legislation that would put in place a tax on the amount of iron produced by a mining company.
Fitzgerald, Senate majority leader, told members of the National Federation of Independent Businesses that such a tax, known as a tonnage 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. Cullen and other Democrats argue that the tonnage tax is more fair to local communities because it provides more money during the early stages of a mining operation for such local needs as roads, school improvements, housing and law enforcement.
Officials with Gogebic Taconite, the company that wants to spend $1.5 billion to build an 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.