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Thanks, Tesla? Nevada praised for transparency of economic development programs

Smiles all around after the Legislature approved Tesla’s subsidy in 2014. (Photo by Max Whittaker/Getty Images)

Policy, politics and progressive commentary

A nonpartisan watchdog group is praising Nevada in a new report for increasing transparency around its economic development programs but notes that “there is still a lot of room to grow.”

Good Jobs First on Tuesday released a ‘report card’ grading how transparent states’ public subsidy programs are. They considered variables such as whether economic development agencies disclose the names of subsidy recipients, the projected and actual wages of jobs created, and whether the public has an opportunity to weigh in on subsidies before they are approved.

Nevada ranked first in the nation for transparency.

However, the Silver State’s score of 63.6 out of 100 points, while highest in the nation, is still “a near failing grade,” notes a press release accompanying the report.

Nevada and Connecticut were the only two states to secure more than 50% of available points. The national average score was a mere 22 out of 100 points. Two states — Alabama and Georgia — received a score of zero.

Eight years ago, when Good Jobs First did a similar analysis, Nevada ranked second-to-last for transparency of its economic development programs.

Good Jobs First credited the turnaround to a 2015 law passed by the Nevada State Legislature that requires the Governor’s Office of Economic Development to disclose recipient-level data for various tax abatements. The report characterized the new disclosure requirements as a response to public blowback over the $1.3 billion in state and local subsidies awarded the year prior to Tesla for its electric car battery factory.

“The public’s discomfort with the massive deal pushed the state to improve its subsidy transparency,” reads the report. “It’s not perfect, but Nevada’s post-Tesla reform flipped the state from one of the worst to one of the best in the country.”

The report notes that measuring transparency is not the same thing as measuring effectiveness or accountability but is a necessary baseline because “without company-specific, deal-specific disclosures, it’s difficult for the public to get at even the most basic return on investment, accountability or equity questions.”

“Secrecy in economic development ultimately only benefits companies trying to leverage even sweeter deals for themselves at the expense of everyone else,” reads the report’s forward. “This doesn’t just result in wasteful spending. It siphons money away from important public needs, like affordable housing, healthcare, transit and schools.”

The report notes that Nevada’s disclosures laws helped the Reno Gazette-Journal report in 2019 that many  companies subsidized by Nevada fell short on their wage promises.

Notably, Nevada’s other major subsidy — the $750 million for Allegiant Stadium, which was approved by the Legislature in 2016 — also fell short on its projected construction jobs.

According to its most recent annual report, GOED in 2021 assisted 84 companies, resulting in $1.2 billion in capital investments and 5,695 new jobs with an average hourly wage of $27.29.

But details on specific tax abatements deals can still be murky. Companies can request that certain information, such as a breakdown of the jobs they are projecting, be redacted from the application materials that are made available to the public.

For example, autonomous vehicle company Nuro, which last year announced plans to build a manufacturing facility and closed-course testing facility in North Las Vegas, applied for nearly $500,000 in tax abatements by claiming it would create 250 new jobs with an average hourly wage of $27.50. However, the detailed list breaking down exactly how the company reached that average wage was not made public and company officials declined to provide any details when asked.

Nevada law allows companies to request data be kept confidential by declaring it “proprietary information.”

An earlier, separate application requesting $170,000 in tax abatements for Nuro did include a breakdown of the projected jobs. That breakdown included 50 projected jobs, 30 of which were general or operations managers. Both applications were approved by GOED and the Silicon Valley company was praised by elected officials during press conferences.

Of the six tax abatement applications approved by GOED last month, four had the breakdown of their projected jobs kept confidential. Those companies were Haas Automation, ENTEK Manufacturing, Stellar Snacks and Western Ceramics.

The post Thanks, Tesla? Nevada praised for transparency of economic development programs appeared first on Nevada Current.

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Michael McGreer Mesquite, Nevada
Dr. Michael Manford McGreer is managing editor of Nevada-today.com and writes on issues that impact public policy.

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