The Sucker State
In the grand tradition of American robber barons, Elon Musk, the CEO of Tesla Motors Inc., displayed a stunning arrogance and brazen disrespect to Nevada taxpayers during his recent visit to town to brag about his gigafactory and preen with the press.
In response to a question from a Reno Gazette-Journal reporter about the sustainability of businesses that receive large subsidies from the taxpayers, he scoffed at the idea that he even needed the $1.3 billion in taxpayer money to bring his factory to Nevada, saying, “It was important that Nevada offer that package just to show that they cared. It doesn’t move the needle on economics.”
Musk insisted on belaboring his point, telling the reporter: “So, it is really a very tiny effect on the economics of the factory. But if the state didn’t do what it could, then does the state really care? So that package was more about Nevada showing that they cared about Tesla being here than anything else.”
Clark County Sen. Tick Segerblom, who voted for the record-breaking subsidy package, quipped on Twitter: “Next time let’s pass a law that says ’We care’—and keep $1.3 billion.”
Musk and his supporters like to point out that Tesla didn’t cash a $1.3 billion check but rather received a “concession” on their tax bills so they won’t be charged for a period of time. But the end result of the $1.3 billion subsidy is the same, whether it’s one giant check or not paying your taxes for 20 years: Nevada has $1.3 billion less to build and repair schools, create better transportation systems, and improve the public service infrastructure for all the new employees arriving from out-of-state.
If we take Musk at his word and he doesn’t really need the money to make the economics of the gigafactory work, the tax breaks Nevada granted are simply a bonus for his stockholders. Where’s Robin Hood when you need him?
Our country needs a fundamental shift away from subsidizing large corporations with taxpayer funds. If we want to create jobs, how about investing in jobs that strengthen the community, such as teachers, parks and recreation workers, police and firefighters instead of enriching the shareholders of the favored company of the month?
The late Assemblywoman Peggy Pierce loved to ask corporate lobbyists if they knew where Nevada ranked in terms of the number of public employees per capita. The lobbyists quickly learned the answer: dead last. Things haven’t improved much since Pierce’s time in the Legislature. In 2014, Governing Magazine calculated the number of local and state public employees, ranking Nevada second-to-last with just 189 per 10,000 residents. The national average is 232 employees.
There is a glimmer of hope that Democrats will take up the cause of small business owners based on a roundtable Hillary Clinton’s campaign held in Nevada last month to release her policy intended to protect and support small businesses. Measures include enhancing legal protections and providing better tools for small businesses whose bills for service are repeatedly ignored by large companies, as Donald Trump has famously done. Clinton also wants to expand working capital for small businesses, which create nearly two-thirds of new jobs. If we’re going to subsidize private businesses, maybe we should look harder at the mom and pop shops instead of the billionaires.
Would Musk have brought his fame and fortune to Nevada if we hadn’t coughed up the $1.3 billion? Who knows? He likes Nevada and recognizes how much our state has to offer. As he walked reporters around the gigafactory site, which is now 14 percent complete, he remarked “I find this to be quite romantic. It feels like the Wild West.”
Spoken like the modern robber baron he is.