Tuesday, September 9, 2014

"Ratification Is Different from Rubber-stamping."

No, we don't always agree with him. Yes, this only touches the surface of what's increasingly looking like an incredibly thorny issue. But yes, Jon Ralston's advice to state legislators on Tesla is very sound advice that they should pay attention to.

"Ratification is different from rubber-stamping." Just since the deal was announced last Thursday, the price tag has swollen from $400 million to $1.25 billion. Why? This gigafactory isn't cheap.

Ironically, Tahoe-Reno Industrial Center (& Mustang Ranch brothel) owner Lance Gilman claimed "no public money" has been used to develop Tahoe-Reno Industrial Center. Even if that statement was completely true last week, it certainly will not be going forward. If the Nevada Legislature approves the deal US Senator Harry Reid (D) encouraged and Governor Brian Sandoval's (R) economic advisers negotiated, Tesla will be exempt from paying sales taxes on construction materials and factory equipment for 20 years. That alone essentially serves as an estimated $725 million state subsidy for Tesla and Tahoe-Reno Industrial Center.

In addition, Tesla will receive $195 million worth of transferable tax credits along with $332 million worth of exemptions from property taxes. And on top of that, the State of Nevada will pay Lance Gilman $43 million for right-of-way so it can invest at least another $60 million to build a highway through Tahoe-Reno Industrial Center in order to connect the Tesla Gigafactory to US Highway 50 and Interstate 80 Freeway.

Oh, and this may not even be the end of it. Take a look at the growing list of registered lobbyists for the 28th Special Session of the Nevada Legislature. We can only wonder what may come next.

At least some legislators are demanding certain conditions for all these giveaways, such as guarantees for prevailing wage and Nevada workers being considered first for the new Tesla jobs. And quite a few legislators are insisting the tax credits will be tied to Tesla's progress in building the gigafactory (perhaps because they want to avoid another Apple boondoggle?).

Let's be upfront here. The reward will be quite high if this Tesla project succeeds. Nevada will have cemented our reputation as the hub of the 21st century clean energy revolution. And the Reno/Sparks/Tahoe region may finally have secured economic growth and diversification...

But at what cost? The Atlantic Senior Editor Richard Florida has already decried the $56,000-$300,000+ the State of Nevada may pay for each Tesla job that may or may not last into the distant future. Already, critics are accusing the state of overpaying for a "trophy". And opposition to the Tesla deal is already creating some very strange bedfellows, from the "TEA" powered NPRI and AFP to progressive stalwart PLAN.

"Ratification is different from rubber-stamping." At least one legislator seems to fully understand this. Pretty soon, we'll find out how many more also do... And/or how many simply don't.

1 comment:

  1. Elon Musk for Nobel!!!


    Please sign it and spread the petition.