By most accounts, this Tesla deal is almost too good to be true.
If all goes as choreographed, the special session of the Legislature to approve the multi-billion dollar Tesla deal that legislators still haven’t even seen yet will be wrapped up by bedtime Thursday, Sept. 11, 2014 (more likely, Friday).
And again, I think it’s great that Tesla chose Nevada for its new battery manufacturing plant and won’t have to pay any taxes for at least the next ten years — including the sales taxes that you and I pay every single day.
The same sales taxes that were hiked “temporarily” in 2009 and were supposed to sunset and come back down in 2011, but were instead extended by Gov. Brian Sandoval.
The same sales taxes that were hiked “temporarily” and then were supposed to come back down in 2013, but were again extended by Gov. Sandoval.
Gee, I wonder what he’s going to do with those sunsets in next year’s session?
But back to the Tesla deal… As Las Vegas Review-Journal columnist Steve Sebelius wrote, “It’s not that the state is doing this for Tesla that’s really the issue. It’s that the state can do this at all that’s the issue.”
Indeed, where does the government derive the power to exempt some businesses but not others? What about “equal protection” under law?
For example, according to the Nevada Manufacturing Association there are “roughly 3,000 small, medium, and large manufacturing and warehousing businesses around the state.” Those are manufacturers who are already in Nevada; many of which have been here for a long, long time. Why tax relief of the new kid on the block but no tax relief for them?
Ditto non-manufacturing businesses in Nevada, many of which have been operating here for decades and helped build this state, which will still be stuck paying all the taxes that Tesla, a new-comer, won’t have to pay for the next ten years. Why no tax relief for those businesses who invested in Nevada LONG ago?
And what about the estimated $25 million worth of tax breaks being given to Tesla that are being given to Tesla by taking them away from other companies who already have home offices here in Nevada and have been here for a long, long time. How is “robbing Peter to pay Paul” right?
In addition, in the last legislative session the Legislature set aside some $80 million worth of tax credits to lure movie productions to Nevada, the Entertainment Capital of the World. While that decision was still questionable, at least those tax breaks were extended to an entire industry, not just one company.
Alas, the remaining $70 million of tax incentives set aside just last year for the film industry will now be shifted over to Tesla instead.
Again, how is “robbing Peter to pay Paul” right? And since the ink on the Tesla deal isn’t even dry yet, and no one but Tesla and the governor’s office has seen it, why the rush to call the special session today? Why not release the deal, including all the fine print, and allow elected legislators and the public to review and scrutinize it for at least a few days first before being summoned to Carson City to rubber stamp it?
Is there something in the deal that we don’t know about that Gov. Brian Sandoval wants to rush through before it’s discovered and opposition rises up?
Indeed, I was reliably told yesterday that the Governor was quite irritated when state Controller Kim Wallin told the Las Vegas Review-Journal that “We have to make sure there’s true accountability in this deal. Oftentimes we give out money, and we don’t get reports back.”
Why would requiring regular performance reports and assuring accountability upset the governor?
Citizens of Nevada… beware.
Chuck Muth is president of Citizen Outreach, a non-profit public policy grassroots advocacy organization. He may be reached at firstname.lastname@example.org.