Some questions before lawmakers vote on Tesla deal
What is state government for?
Why does it exist? And how far can it go — how far should it go — in trying to induce private companies to bring jobs for its citizens?
Those are some of the philosophical questions underlying the special session that’s scheduled to get underway in Carson City today. And the answers may not be entirely comfortable for the advocates of a gigantic incentive package aimed at luring Tesla Motors to the Reno-Tahoe Industrial Center, where it plans to build a $5 billion factory to produce batteries for its electric cars.
This has happened before: Back in 1981, then-Gov. Richard Bryan called the Legislature into special session to repeal the state’s anti-usury law, in order to land a Citigroup Inc. credit-card payment processing center in the fictional town of “The Lakes,” Nevada. (Citigroup in January announced it had laid off the last of its employees who had worked at the facility, by the way.)
During last year’s legislative session, Nevada saw how swiftly the Legislature could act when an online poker bill was introduced, debated, voted upon, passed by both houses and signed by the governor in a single day!
Meanwhile, a sensible tax plan that enables Nevada to respond to modern challenges has never been found, despite decades of study and debate.
And now, it looks like Nevada lawmakers will take a day or so to approve a plan worked out in secret by the governor’s economic development team and Tesla over a period of months, a plan that will relieve the company of the obligation of paying some taxes for as long as 20 years.
Oh, but jobs! And performance-based incentives! And ROI! You will hear those words shouted repeatedly in the next two days. If the state needs to waive taxes, build roads, forgo future income and call its pliant Legislature into a very special session to vote on the plan, so be it.
Can you imagine lawmakers rushing north to pass a billion-dollar plan to improve Nevada’s schools? (This, by the way, would do as much if not more to attract big, high-tech businesses to the Silver State in the long run.) Of course not! They’ve tinkered with education for years without success, and the powers that be are currently engaged in fighting the effort to impose a 2 percent tax on business revenue that will appear on the November ballot as Question 3.
But if a big bank, a big car company or big casinos need something, we can get it done in a day! Come to Nevada: Your dry cleaning and your legislation is in by 8, out by 5, or your money back! Nice to know that 150 years of history hasn’t erased the fact that we were, are, and, if current conditions hold, will always be, the great rotten borough.
But the jobs! Isn’t the state supposed to work to help its citizens get jobs?
Sure. But those jobs will go to people who will need things like roads, police and fire departments, health care and schools. And you know what pays for those things? Taxes. And you know who’s not going to be paying those taxes? Tesla Motors.
Who will, then? Well, suppose you’re one of the Nevadans (median income, $54,000) who can afford to buy an electric car that costs $35,000. You’ll pay sales tax on your new ride. When you drive over to the DMV to register it, you’ll pay a bevy of taxes, including registration fees that won’t depreciate as quickly because of the repeated extension of a package of supposedly temporary taxes. You’ll pay property taxes on the garage you park it in, and get a bill for the electricity it requires to charge.
You know who won’t pay sales, property or payroll taxes, for between 10 and 20 years? You know who will get eight years worth of discounted electricity rates that you will pay for in your bills? You know who gets a free road built right to their front door? Tesla Motors.
What is state government for? Why does it exist? Is it this?
Steve Sebelius is a Las Vegas Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or ssebelius@reviewjournal.com.