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MARESA wants status quo on severance tax issue

April 13, 2012
By JACKIE STARK - Journal Staff Writer ( , The Mining Journal

MARQUETTE - With so many questions and concerns surrounding the controversial proposed mining severance tax, a Marquette Alger Regional Educational Services Agency official is hoping things stay just as they are.

Bob Nardi, superintendent of Finance, Information Systems and Quality Assurance Services for MARESA, was among a group of local officials - including representatives from the Marquette County Board, Humboldt and Michigamme townships - who traveled to Lansing in late March to meet with a representative from the governor's office. Nardi was the only school representative present at the meeting.

The group discussed the possibility of switching to a mining severance tax as opposed to an ad valorum tax, which is the current tax levied on mining companies in Michigan. The severance tax was first proposed by state Rep. Matt Huuki, R-Atlantic Mine.

Although the idea has not been introduced as legislation, local officials fear the proposed severance tax could significantly impact the amount of money local government and schools would receive from the Kennecott Eagle Minerals Co. mine in Michigamme Township.

"Our whole group advocated for the ad valorum tax," Nardi said during the MARESA board meeting Monday night. "We said that's what the mine has been built on. The people that were at the meeting from the county and the schools and the townships are the groups that have stood by the development of the mine for the last nine years. It felt a little bit uneasy that we were here at the eleventh hour and now the state wants to change the rules on how taxes would be collected and distributed."

Nardi also expressed concern about the $191 million mine valuation offered by the state geologist last month on the Kennecott mine, saying that he worried the mine might try to cap the value of the ore body at that amount.

Other concerns he raised included a fear that with a

severance tax, instead of going straight to local governments and school districts the tax money would first go to Lansing and then be redistributed back to the Upper Peninsula.

"We said we would like the funds to come to the locals," Nardi said. "We're fearful that if they go to Lansing, somehow, they'll get commingled there and lost in the equation."

Nardi said the mine is already realizing a "significant windfall" from the elimination of the Michigan business tax and that if the governor's office is looking for added revenue, it should look to Kennecott and not the local government or school districts.

Most of all, Nardi said he simply wanted to make sure local organizations received their fair share of taxes from the mine.

"They (Kennecott) can go to different places and get different ore bodies. Marquette County is never going to move," Nardi said after the meeting. "Once this ore body is gone, it's gone forever. The people involved are trying to say, 'we need to get some benefits for our locals' ... The people of Marquette County are the ones who will have to live with the current and future liabilities of the mine."

Jackie Stark can be reached at 906-228-2500, ext. 242.



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