EDITORIAL: Empty promises for Nevada tax breaks
Las Vegas Review-Journal
August 17, 2019
The competition to attract high-profile business expansions has in recent years fostered an arms race among states. The frenzy reached a crescendo when Amazon executives played hundreds of U.S. jurisdictions against each other last year after announcing their intention to build a second headquarters.
Nevada leapt into the fray a decade ago with the creation of the Governor’s Office of Economic Development, charged with dangling incentives in front of corporate titans, business owners and entrepreneurs in an effort to attract investment and jobs.
The push to convince Amazon to come to Nevada failed, of course. But the office did manage to land a big fish in 2014 when Tesla’s Elon Musk agreed to build his massive battery factory near Reno in return for $1.3 billion in tax breaks over 20 years, all dutifully approved by Nevada lawmakers.
But Telsa is just one of many recipients of state tax abatements. In total, Nevada economic development officials have showered tax breaks totaling hundreds of millions of dollars on more than 275 companies since 2009. In return, the companies promise to create a certain number of jobs and meet various investment thresholds. Some of these businesses are smaller enterprises, but major conglomerates and wealthy tech outfits also sidled up to the trough. In addition to Tesla, recipients include Apple, Switch, eBay and Scientific Games.
Critics have long argued convincingly that a more effective way to promote sustained economic growth is to create an overall tax and regulatory climate conducive to entrepreneurship and business expansion rather than to single out specific enterprises for special dispensation. An analysis published last month by the Reno Gazette-Journal provides plenty of ammunition for that contention.