by Pat Hickey, Reno Gazette-Journal, March 9, 2023
I was there that day in Seoul in 2012 with Governor Brian Sandoval when he met with South Korea’s prime minister and said in no unequivocal terms that “Nevada is open for business.”
At the time, those Korean officials welcoming Nevada’s chief executive on his first foreign trade mission knew next to nothing about the Silver State except what they’d experienced during their trips to Las Vegas. Today those same Asian leaders might be exploring possibilities with Nevada’s lithium supply chain businesses and companies like Tesla and Redwood Materials. They will be happy to hear current Governor Joe Lombardo say that “Nevada is back open for business, effective immediately,” as the Governor’s Office of Economic Development signed the latest Tesla deal.
Proof of how Nevada has changed in the past 11 years can be found in statewide K-12 classrooms where interest in STEM education and robotics is growing leaps and bounds. We’ve gone from an economy primarily fueled by Vegas Strip gaming properties to one that is powered in part by emerging careers in electric vehicle battery production and advanced manufacturing technology fields.
Nevada is placing a large bet on itself in the hopes that as the world transitions to more sustainable energy resources, it will somehow be led by a smaller state like Nevada. With GOED’s recent unanimous approval of a $330 million-plus abatement for Tesla, Inc. to build its new electric long-haul trucks, the company has pledged to make a $3.6 billion capital investment at its current site in Storey County, where it is also required to create 3,000 jobs at an average hourly wage of $33.49.
Still, not everyone is enamored of the prospect of providing “giveaways” or “incentives” (depending on your point of view) to one of the world’s largest companies. Bob Fulkerson, Reno’s longtime progressive critic of corporate capitalism, was the lone spokesman in opposition to the Tesla deal. Saying that incentives are no longer needed and that “the pump is already gushing and doesn’t need priming,” Fulkerson raised the issue of how much large companies like Tesla are getting from Nevada as opposed to how much are they giving back.
From Tesla’s point of view, both things are happening.
“The continued investment in Nevada isn’t just about the state’s tax breaks for the electric carmaker,” said Tesla Senior Global Director of Public Policy Rohan Patel. Speaking to GOED members, Patel said, “It’s in fact because our team really loves being in Nevada. We like the state. We like the workforce.”
Favoring the state and its workforce is something not lost on most Nevada civic leaders who are encouraging Tesla (and other companies) to be mindful of the state’s growing needs in housing, day care services, infrastructure, education and transportation. The Reno Sparks Chamber of Commerce has pressed Tesla to provide child care and company officials says they are supporting a new private child care facility for its employees near its TRIC factory in Storey County. Tesla is constantly being reminded of the housing crunch they are causing in Washoe County and the surrounding region. Tesla officials wouldn’t comment publicly on the company’s plans, but assured me that the housing issue is high on the list of upcoming projects.
Progressives aren’t the only ones who don’t like the idea of companies being lured by incentives to locate themselves in Nevada. Conservatives, like those from the Nevada Policy Research Institute, have historically decried state giveaways, saying, “Government shouldn’t be about the business of picking winners and losers.” Such high-minded positions sound good in public policy parlor rooms, but have little to do with the real-world reality of how companies make their investment decisions. When states like California, Texas, Arizona and New Mexico were bidding for Tesla to come to their states, they all offered incentives — some greater than Nevada’s. If Nevada is unwilling to offer incentives, the state might as well take our place in the losers’ line when it comes to companies coming or expanding their business footprint here.
The fact that many Nevada workers are being paid higher wages with less than a four-year college degree, that students are contemplating careers in robotics and technology, and community leaders are being forced to crack the housing problem code — are all positives in the bigger scheme of things.
Nevada’s economy is like a glass that is more than half-full. That sure beats the alternative of being half-empty for the future.
“Memo from the Middle” is an opinion column written by RGJ columnist Pat Hickey, a member of the Nevada Legislature from 1996 to 2016.