Yep, More Technical Difficulties

We hate having to write this again. But sadly, it's come to this.

Our personal blogging assistant (aka our smartphone) started experiencing problems last weekend. At one point, it just went berserk. And then, we started experiencing dead spots on the screen.

Sadly, our personal blogging assistant is defective. So we're now waiting for a replacement.

We appreciate your patience while we're working out this latest set of technical difficulties. Jeez, is it too much to ask for a functioning smartphone and reliable internet?

Rotten Apple, Rotten Core

Did you know Apple Computer now has a corporate office in Reno? I bet you didn't. In fact, hardly anyone must have known until yesterday.

The New York Times on Sunday outlined legal methods used by Cupertino, California-based Apple to avoid paying billions of dollars in federal and state taxes.

One approach highlighted in the report: Even though the company is based in California, Apple has set up a small office in Reno, Nevada, to collect and invest its profits. The corporate tax rate in Nevada is zero. In California, it’s 8.84 percent.

While many major corporations try to reduce their tax bills, technology companies like Apple, Google Inc., Microsoft Corp. and others have more options to do so.

And what have we seen as a result of Apple using us as a lame excuse not to pay California corporate income tax opening a Nevada office? Well, there's one fewer vacant office in Washoe County. And we have another cool Reno factoid.

Otherwise, we have nothing. And that's the problem here. Big corporations come here to Nevada to avoid paying taxes, and we have nothing to gain from it.

Yet as Apple hides its corporate profits in Reno, it actually hires people in Cupertino. And there's a reason for that. It's because Silicon Valley is full of top notch schools that are full of inquisitive students, tech companies there always have a rich pool of highly skilled workers to dip into and hire.

While UNR and Washoe County are trying to create the same kind of synergy in Reno, their possibilities are more limited simply because UNR hasn't been allowed to grow into another Stanford or UC Berkley. Instead, we've had to argue over how much to cut from both K-12 and higher education.

We clearly suffer went we don't invest in the basics, like public education. And Nevada has clearly suffered as the result of underfunding our schools. There are just certain benefits that good education provides and unfair tax codes can not... You know, benefits like jobs and stable communities.

Perhaps Silicon Valley tech giants like to hide their corporate profits here in Nevada, but we're not really reaping any rewards from their tax evasion. Rather, we continue to deny ourselves a chance to create our own version of Silicon Valley by denying our state the revenue we need to properly fund public education. While it's nice to know Apple has an office in Northern Nevada, it would be nicer if we had the kinds of well paying high tech jobs that continue to go elsewhere.

DesertXpress Derailed?

This morning, Richard Velotta had an interesting column in Vegas Inc. on the current state of passenger rail in Southern Nevada. Bottom line: We still have none, and we can't wait forever for DesertXpress to start its engines.

In the past year, I’ve attended presentations by DesertXpress officials to get updates on progress.

Over the past several months, a handful of federal government agencies have approved routes and rights-of-way, but little information has emerged on the status of the project, and neither the company nor the Federal Railroad Administration returns phone calls. [...]

I also want to know, DesertXpress, if you’re still confident in the Las Vegas-Victorville transportation model after all the scorn you’ve endured in the past four years. Aren’t you tired of hearing people say, “Victorville?” in disbelief when you explain that you’re asking Southern Californians to drive there, park their cars and board a train to take them on what would be the easier leg of the journey to Las Vegas? Let’s not forget, either, that our California visitors would have no car once they arrived in Nevada and would have to rely on public transportation, taxis or a rental. Never mind that there’s virtually no upside to Las Vegans looking to go to Southern California, either.

I’d like to know if you’ve rethought the maglev technology since the commercially operating line in Shanghai is maintaining a more than 99 percent on-time efficiency rating after eight years in service. Isn’t it about time we stop calling maglev “unproven?”

I know, your suppliers are all friends and steel-wheel-on-rail guys, the same ones who dominate policy at the Federal Railroad Administration. There’s virtually no hope that this is going to change with that good ol’ boy network in place, despite President Barack Obama’s urging to get the fastest train in the world deployed in the United States. I don’t think he was talking about a 150 mph system that most don’t consider to be high-speed rail anymore.

Shortly after I started this blog in mid-2009, I wrote this piece expressing my frustration with the slow pace of progress then.

They're saying they're in talks with California High-Speed Rail about building a spur to connect Victorville to the California rail network stop in Palmdale, and maybe even allowing the DesertXpress to use the state rail to go all the way down to LA and Orange County. We'll see.

If something actually materializes out of these "talks", color me pleasantly surprised. But in the mean time, I just don't see very many people either driving all the way to Victorville to take a train to Vegas or riding up on a bus to Victorville and change from the bus to the train. Yes, that's really the interim plan.

Now don't get me wrong, I'm NOT opposed to rail. I just want to see it done right. The Anaheim to Las Vegas Maglev plan just seems to make more business sense, especially over the long term. But even if we want to go forward with conventional rail, put forward a workable plan! I don't like how DesertXpress claims "we may work something out with CA High-Speed Rail" or "we may one day talk with Arizona officials". Either put up or shut up! Come forward with a detailed plan to make DesertXpress work or don't come to us the taxpayers and expect a bailout when we can just go forward with Maglev and their real, sensible plan.

After federal funding was pulled from Maglev, I honestly thought it was dead. I figured Sig Rogich got DesertXpress all "juiced up", so we'd just have to find a way to make it work.

However after nearly three years of waiting for something, anything really, to actually start construction, it's starting to feel like deja vu and 2009 all over again. As Mr. Velotta so aptly noted, we've given Desert Xpress all this time to basically go nowhere fast.

So how much longer must we wait for some kind of comprehensive transportation solution? DesertXpress backers promised they could finish sooner than Maglev while providing safer and more reliable passenger rail service between Southern California and Southern Nevada. However with continued delays, those promises are sounding increasingly empty.

Now DesertXpress backers are promising that this time will be different, that this time they're closer than ever to securing federal loans to build it. But wait, didn't these same folks promise once upon a time that "this will be privately funded and operated!"? I guess that didn't last long. (And really, it never could, since projects like these need some kind of public funding to be viable.)

However, DesertXpress backers are still claiming people will want to ride a train to and from Victorville. And as it's always been, the key problem here is that Victorville is about 80 miles away from the major population centers in Los Angeles and Orange Counties. What had made the Maglev project so appealing, in addition to its very high speed and clean technology, is that it could be built through the Cajon Pass all the way to a proposed new train station in Anaheim, where travelers could either hop off and head to Disneyland and other top Orange County tourist attractions, or easily connect to trains going to Los Angeles and San Diego. For some reason, Victorville just doesn't carry the same kind of cache among the tourists and commuters looking for a real SoCal-to-Vegas train to ride. (DesertXpress officials claim they're still in talks with the California High Speed Rail Authority for connecting their line to the HSR line in Palmdale, but again it sounds like talks that are going nowhere fast.)

As we discussed yesterday, renewed concerns about high gas prices and climate change are sending more commuters away from cars and to mass transit alternatives. At this time, building a high speed rail line from the population rich Southern California to the tourism hub of Southern Nevada should be a "no brainer". However, this not-so-high-speed rail line that starts in a city 80 miles away from Southern California top population centers, business hubs, and tourist attractions really seems to be complicating matters. Can we really afford to keep going nowhere fast on DesertXpress? Either DesertXpress needs to shape up, or top Nevada elected officials (like Harry Reid) really need to rethink their support for this project.

Can Reno Be "The Next Silicon Valley"? (& Can Las Vegas?)

Yesterday, KRNV News 4 asked.

“The number one choice of why we're in Northern Nevada is quality of life,” says co-founder of Noble Studios, Season Lopiccolo.

For the diverse group of tech-savvy professionals at Noble Studios, Reno has something for everyone.

“Some snowboard, some like to dress up and pretend to be someone else, we have musicians, people with their own bands, all different walks of life,” says Lopiccolo.

Downtown Reno is in the midst of an image makeover, shifting from a place known for its bright lights and casinos to a world-renowned high tech hub.
And the supportive and entrepreneurial friendly environment within the biggest little city is making a big difference.

“One of the main reasons why we moved to Northern Nevada is that a handshake means something here,” says Lopiccolo.

I'll do my best to answer.

Is it possible? Sure. Is it probable? Perhaps when we get serious about investing in public infrastructure.

But then again, at least Reno has public infrastructure. Las Vegas doesn't have much of any left, so it's much more difficult to work on diversifying Southern Nevada's economy. Tony Hsieh is trying to do the same thing in Downtown Las Vegas. But if no one could even step up to save the Nevada Cancer Institute (which was ultimately gobbled up by a CALIFORNIA college), how can we really grow our own tech sector? As long as we fail to properly invest in our future, our economy will continue to suck.

At least Northern Nevada has UNR...



And to their credit, folks at UNR have been doing a great job in partnering with the greater communities around the Reno-Carson metropolitan area to work on economic diversification. This at least partially explains why Northern Nevada's economy hasn't been as devastated by continuing weakness in the gaming & tourism sector as Southern Nevada was when "The Great Recession" first hit.

However, the same set of data also shows that continuing gaming weakness IS harming economic recovery up north. Not even Reno is immune from it. And as we continue to see expansion of tribal casinos in California and online gaming worldwide, Northern Nevada will need to continue working on diversification to build a brighter future that isn't just based on fickle gamblers.

And again, we in Southern Nevada can't depend on fickle gamblers for our future, either. We also have to face the reality staring us down as Macau continues to grow, online gaming goes live, and new casino projects are being proposed everywhere from South Florida to Baja California (Mexico). While gaming will likely always be in our blood, there's no reason why we shouldn't look beyond physical casinos to start attracting new gaming technology companies, online gaming innovators, as well as infrastructure support and consulting services.

But as long as our schools suck and as long as the rest of our public infrastructure continues to lag, Southern Nevada will continue to suffer our addiction to the extreme highs and extreme lows of "the bubble based economy". I'm sure I sound like a broken record sometimes, but I nonetheless feel the need to continue talking about this until we finally see some real action and real solutions. We really do have the potential to bring more high tech jobs into this state, especially in sectors like gaming and renewable energy where we have natural strength, but we'll never realize that potential if we don't invest in our "human capital".

Reno is already seeing some success in bringing in new high tech jobs. They just need to finish the job in diversifying the economy up there. And Las Vegas still has plenty of catching up to do in that department. And ultimately, both ends of the state need more investment in public education to ultimately be successful.

And the Chorus Grows...

Are we listening?

Kevin Whitney of TechAmerica, an advocacy group that represents 1,200 high-tech companies across the country, said an hour-long discussion with state Legislative leaders and the governor’s office focused on issues the state faces in luring such companies to move to the state or expand existing businesses.

“Many of those issues centered around a lack of workforce development and skills acquisitions that our companies require to relocate or expand our operations, here in the state of Nevada,” Whitney said. “Oftentimes what you see is these companies come here to do a project and unfortunately have to import their workforce from other states.”

Capgemeni, a tech firm working on the Nevada Business Portal and with the state department of employment and training, found those challenges firsthand, said company executive Kevin Doyle.

“Frankly, in order to start our business here, we needed to bring folks in (from out of state),” he said. “We know that’s not sustainable long-term, but having technology skills is absolutely paramount to our success.”

So tech companies are now begging the powers that be in Carson City for a more educated workforce? But guess what? Brian Sandoval wants to slash programs at Nevada colleges that are doing this! I know, I know, it's the definition of insanity.

How often have you heard me rant about our overdependence on gaming, even as it's becoming increasingly clear that gaming isn't building here any more? But as long as we refuse to provide needed infrastructure, like good PreK-16 schools, new companies and industries will continue bypassing us for greener pastures.

"Jobs, jobs, jobs" has been the mantra of the 2011 Legislative session that began Feb. 7. And while Democratic leaders have their differences with the new Republican governor over the budget, both sides of the aisle have stayed on message that working together and creating jobs is priority No. 1 this session.

Assembly Speaker John Oceguera, D-Las Vegas, said the discussion with executives of TechAmerica focused on "what would it take for them to come to Nevada."

In answer to that question, Paul Miner, government affairs manager for General Electric Co., said "first and foremost what you're seeing around this table." He called the bipartisan front "unprecedented."

But Miner also said, "you need a well-educated work force to get to work."

Kevin Doyle, with Paris-based Capgemini, agreed, especially when it comes to specific skills required in the technology fields.

His consulting and technology firm recently located in Nevada, he said, and had to import staff because it could not find trained workers.

Sandoval said he was encouraged by the executives' comments.

"This is one of the reasons I am optimistic of the future of Nevada," he told reporters, who were briefly invited to ask questions after the closed discussions concluded.

Sandoval has proposed deep cuts to both K-12 and Nevada's colleges and universities. Democrats counter the cuts would counterproductive to a state trying to claw its way out of the Great Recession.

The writing is on the wall. Who is reading it? Who is heeding the warning? Who is ready to call out the "no tax" insanity for what it is and call on Nevada to start anew?

We have companies coming into our state, taking our natural resources for their profit, and paying next to nothing in taxes. What is wrong with this picture?

We have the cheapest state government in the country and one of the lowest tax rates anywhere, yet businesses are NOT flocking here in droves. What is wrong with this picture?

Business leaders are now saying they want and need a more highly educated workforce to succeed, but Governor Sandoval stands by his budget to cut to death the very economic lifeline we need now more than ever before. What is wrong with this picture?

And what will we do to make it right?