Tax breaks help Nevada business
According to recent data collected and published by the Las Vegas Sun, for the past two years, Nevada officials have approved $87.6 million in tax incentives for businesses that have created, in total, nearly 2,900 jobs. As a product of this period of decreased tax revenue—the Sun estimates a $30,000 decrease per job—Nevada’s citizens may be critical or uncertain on whether a decrease in funding is what the state needs during its current period of economic recovery. However, the benefits of tax incentives for businesses—and the snowball effect of other economic bonuses that come from secondary transactions such as spending—far outweigh the doubts behind the incentives.
Nevada’s economic development is at a critical point, especially in Reno. With the once-thriving casino industry now struggling to draw tourism, and policy makers attempting to draw customers into the growing areas of downtown and Midtown, Reno’s economy has reached a stage where it must embrace its changing identity. As I’ve mentioned before, one of the best ways to expand the northern Nevada economy is to welcome new business and look at them as a way to invest in future revenue for the state. It would seem that these tax incentives are a great first start to bring entrepreneurs into the fold of Nevada’s mercurial economy.
Investment in the labor capital that Nevada has to offer doesn’t just come from education initiatives, although they are important; it also comes from the ability of Nevada’s businesses to open new positions that allow them to hire more workers. According to the same Las Vegas Sun data, http://tinyurl.com/alklulg, some businesses that have so far benefited from state tax incentives include Urban Outfitters, Apple, Amonix Incorporated, Toys R Us, Quail Hollow Farm and others across many different industries. While the amount of tax incentive funding varies for each business—Apple was granted a staggering $55 million—one thing can be said for sure: Nevada’s economic eggs have been spread out in many different baskets.
While tax incentives provide jobs and, in turn, diversify Nevada’s economy, it is important not to lose sight of how important an efficient allocation of the state’s financial resources is, and that a careful evaluation of a business’ overall contribution to the economy will have to be taken into account. In the long run, providing tax incentives will only be of value to Nevada’s economy if the businesses we support are able to grow and support further developments. For example, it is estimated that Reno’s up-and-coming Apple data center will provide 580 short-term construction jobs and contribute millions to Nevada’s wealth over the next 10 years. This short-term job creation contributes to the economy not only by providing employment but also by stimulating local spending for those who work with Apple.
Finally, another critical aspect of economic sustainability with tax incentives is the encouragement of skill development. An increase in vocational education, whether on the job or in the classroom, is advantageous to the overarching goal of supplying labor capital to a downtrodden economy. It’s not enough to have Nevada’s workers merely employed; they also need to be gaining new marketable skills that will enable them to find employment in tough times in the future. Whether those skills involve carpentry, supply chain management, manufacturing, agriculture or sales, Nevada’s labor force needs to keep moving forward.
Gov. Sandoval’s economic development plan has been and continues to be one of his central strategies for his term in office. With education as the other, Nevadans can only hope that the recipients of tax incentives have been chosen with optimum discretion. But so far it appears that these businesses’ goals for job growth and stimulation of the economy have solid foundations. Only time will tell whether their tax breaks will result in positive fiscal changes.