(Updated at 3:43 p.m. on Jan. 19, 2010)

RENO – A coalition of Nevada labor and social groups said today it will ask voters to raise the mining tax to help fund a state budget gap that continues to widen during the current economic slowdown.

PLAN, the Progressive Leadership Alliance of Nevada,  filed a petition with the Nevada Secretary of State’s office  to amend the state constitution to require taxes to be paid on the gross, not the net, of the value of the minerals extracted by the mining industry.

If approved by voters in 2010 and again in 2012, the effect of the change would be to more than triple the amount paid by the industry to  state and local governments, said PLAN Executive Director Bob Fulkerson.

The proposal would also allow the Legislature to increase the rate paid by the industry above the current limit of 5 percent, he said. The group has until June 15 to collect the 97,002 signatures needed to qualify the measure for the ballot.

A mining industry representative said looking to one industry to solve the state’s budget problems has not worked with the gaming industry and won’t work with mining either.

Fulkerson said mining is singled out for protections in the state constitution limiting the amount the industry must pay to the state, so it is fair game for being singled out for a tax increase.

“No other industry has a constitutional protection but mining,” he said. “It is unlike other industries. You can play another hand of cards, or sell another car or build another house. With gold, when you take it out of the ground it is gone for good. We’re just asking the mining industry to pay its fair share.”

The alternatives of increasing class sizes and ending all-day kindergarten, as proposed by Gov. Jim Gibbons as ways to balance the budget, are not acceptable, Fulkerson said.

Tim Crowley, president of the Nevada Mining Association, said the industry already pays its fair share. The industry in 2008 paid $130 million in conventional taxes, such as sales and payroll taxes, which was a record, he said.

The industry also pays the special mining tax of 5 percent on the value of the minerals, which also generated a record amount in 2008 of $92 million, he said.

“We haven’t seen the initiative, and we will have to take a hard look at how it would apply to our industry,” Crowley said.

Some less profitable non-gold producing mining companies could be hit harder with the proposed tax increase, he said.

Singling out one industry for a tax increase has been shown to be a bad idea in the past, Crowley said. Mining is also a bright spot in the state economy in this period of recession, he said.

“We’re providing high paying jobs to 14,000 Nevadans,” Crowley said. “To pick any industry, especially one that is already paying an industry specific tax, is not wise tax policy.”

State Sen. Randolph Townsend, R-Reno, said he is always reluctant to see changes proposed to the state consitution.

“As hard as it is to get something into the constitution, it is twice as hard to get it out,” he said. “What is popular now may not be popular a few years from now.”

Townsend said the state needs to examine how it spends its existing revenues before seeking a tax increase.

“The question is, do we need the revenue,” he said. “Before we ask someone to pay more, we have to ask ourselves if we are spending our current revenues effectively. The answer to that is: not completely.”