Tesla tax incentives raise concerns

LAS VEGAS -- There has been a lot of fanfare surrounding the official announcement that the electric car company Tesla picked Nevada for its $5 billion battery manufacturing plant.

The deal is sparking debate about the use of public money.

Nevada is giving the electric car company big subsidies and tax abatements totaling up to $1.3 billion over two decades. With millions of Nevada taxpayer dollars at stake, groups from the right to the left are examining Tesla's power play.

Supporters contend it is the plant that could re-charge Nevada's economy.

"I don't need to say that this is a significant and historic day for all of us," Gov. Brian Sandoval said during a news conference announcing the deal Thursday.

Senate Majority Leader Harry Reid, D-Nev., commented on the deal during the Clean Energy Summit in Las Vegas.

"This is a perfect example of the partnerships between private industry and government," Reid said.

Leaders from both political parties believe Tesla could drive Nevada forward, but others are not so sure.

"It will start this big avalanche for people who want to get on the Nevada dole." Bob Fulkerson the director of the Progressive Leadership Alliance of Nevada said.

It all has to do with tax incentives for Tesla.

Very seldom do you find the left-leaning Progressive Leadership Alliance of Nevada on the same page as the free-market conservative Nevada Policy Research Institute.

"The government should not be in the business of picking the winners and losers in the economy," President of NPRI Andy Matthews said.

The two groups both welcome Tesla with open arms, but don't want the company to get special tax breaks.

NPRI said that would be unconstitutional.

"We'd love for them to be here. We think it'd be a really good thing for the state, but frankly whether it's a subsidy of half a billion dollars or a subsidy of one dollar, it goes against the constitution," Matthews said.

PLAN has its own big question.

"Why our state finds it so easy to go into special session to subsidize multi-billion dollar corporations but can't find a way to fund education in our state," Fulkerson said.

As for southern Nevada seeing any benefits from a plant that is a seven hour-drive away, UNLV professor Stephen Brown says the southern part of the state will reap the rewards.

"We account for almost 75 percent of the Nevada economy, some of that spending is going to come down here to southern Nevada pretty quickly." Brown said.

Gov. Sandoval said he can answer the question ‘is this good for Nevada' with an empathic ‘yes.'

He said with $100 billion in economic impact over 20 years, it is an 80-to1 return on the investment. The plant is also expected to create 6,500 jobs.  

To approve the deal, a special legislative session will be called for next week and that alone will cost tens of thousands of dollars.


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