Catalyst Fund means jobs, business

Reasonable Nevadans may think growing the state’s economy and providing for well-paying jobs are great goals.

But a new lawsuit from the Nevada Policy Research Institute seeks to undermine those objectives. That special interest group is suing the state of Nevada to shut down Nevada’s Catalyst Fund, a valuable deal-closing fund that helps companies relocate their businesses here and bring jobs to Nevadans (“Catalyst Fund violates Nevada’s constitution,” Feb. 24 Review-Journal commentary).

NPRI argues that grants from the Catalyst Fund violate Article 8, Sections 9 and 10 of the state constitution, which read: “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.”

That’s fine. The Catalyst Fund is doing none of that.

No company receives a direct payment from the State of Nevada. In 2011, state lawmakers explicitly designed the Catalyst Fund to be constitutional. Local governments award Catalyst grants to locally approved businesses. They have flexibility to decide how to deploy Catalyst. And they, not the state, negotiate contracts with employers to ensure the best for their neighbors and community.

Here is how the process works: A company looking to relocate to Nevada researches whether coming to our state would be a good investment. As part of that research, company officials frequently visit local and regional development agencies such as the Las Vegas Global Economic Alliance. We help the company learn more about why Nevada’s business-friendly climate works for them.

Along with our community partners, we also help these companies work with utilities, find the real estate they need and outline regulatory processes they will have to follow in Southern Nevada.

Fast-growing firms such as SolarCity know that their business is highly sought after, and states such as Utah, Arizona, New Mexico and Texas offer hundreds of millions of dollars of incentives for firms to locate in their state. These states are proactive in their outreach and occasionally even try to pick off employers from other states.

To help us compete with the 47 other states that offer massive incentive packages, local governments can use the Catalyst Fund to help approved companies offset some of the cost of doing business here. All of that financing is transparent.

Compared with the hundreds of millions of dollars that our neighboring states spend, this fund is modest, allocating just over $3 million a year for Southern Nevada.

But that money goes a long way.

The Catalyst Fund played a role in bringing Take-Two Interactive, Nicholas &Company, SolarCity, Kareo, Pathion Technologies and Barclaycard US to our community. Over the next five years, these employers will create 1,400 jobs, generate more than $1.5 billion in economic impact and contribute more than $30 million in state and local tax revenues.

Local governments also have a long and successful history of catalyzing economic development efforts.

The city of Las Vegas provided incentives to help companies such as Zappos and the World Market Center locate in downtown.

The city of Henderson helped companies such Levi’s and FedEx stay in our community.

The point is, this is a modest, constitutional tool that works.

In 2011, legislators and legal counsel publicly debated for months as they carefully crafted the law creating the Catalyst Fund within the bounds of the constitution. Legislative records show that the Nevada Policy Research Institute never testified with helpful solutions to what then was a theoretical program.

Now that the fund is actually supporting business growth, providing jobs for Nevadans and strengthening the economy, NPRI wants to kill it.

Nevada deserves the right tools to help our state’s economy, not damaging lawsuits that cost lots of taxpayer dollars to defend.

Tom R. Skancke is president and chief executive officer of the Las Vegas Global Economic Alliance.