Nevada economic development leaders make case for tax abatements

Economic development officials asked local 2018 political candidates Tuesday to continue supporting current tax abatement policies.

“We’re just getting started,” Jonas Peterson, president and chief executive officer of the Las Vegas Global Economic Alliance, said at the alliance’s fourth annual State of Economic Development event at Green Valley Ranch Resort.

The alliance is a private-public partnership that works with the Governor’s Office of Economic Development and other state partners to recruit new businesses to the state as well as to expand existing businesses that export at least half of their goods or services outside of Nevada. It achieves its mission largely by preparing companies to be approved for state tax abatements.

“Incentives in Nevada are leveling the playing field and generating a high return for our stakeholders,” Peterson told a crowd of about 400 business leaders and lawmakers.

In 2017 the alliance reported it helped to facilitate 36 business expansions and relocations in 2017 (not all of those 36 companies received tax abatements), which together are slated to create 5,679 jobs over the next five years. The majority of those jobs are in industries that are helping to diversify the economy, alliance and state data show.

Of the roughly $33.7 million in statewide partial tax abatements that the economic development office approved in 2017, 62.1 percent went to companies that the alliance assisted, according to the economic development office.

“If we stay the course, we have the ability to unlock a ton of economic growth going forward,” he said. “This is an election year. A lot of decisions are going to be made. … The system is working.”

He said it is time to evaluate what is working well and to use those approaches to further differentiate and position the state.

Peterson told the Review-Journal that the alliance is starting to have conversations with gubernatorial candidates.

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The candidates

Republican gubernatorial candidate Dan Schwartz said Tuesday in a phone interview that he questions the use of tax abatements.

He still would use abatements to recruit and expand companies, he said, but with stronger oversight.

A 2017 Pew Research Center report found Nevada was one of 23 states that does not “rigorously measure the economic and fiscal impact of their programs” that allow for policymakers to improve the effectiveness of tax incentives.

“I question the process by which ataments are made,” Scwartz said. “I think it needs an overhaul.”

Republican gubernatorial candidate Jared Fisher said Tuesday in a phone interview that he would like to see tax abatements offered less often and a shift in the way the state recruits and markets to out-of-state companies.

He said he would like to see more physical signs advertising Nevada as a business-friendly state in major airports.

“As governor, the first thing I would do is I would get a marketing budget for marketing Nevada for companies to come here,” he said, adding that he has not had any conversations with officials at the state economic development office or at the alliance.

Democratic gubernatorial candidate Steve Sisolak said Tuesday in a phone interview he still would use tax abatements but would like to use them less often and with more transparency and oversight.

Tax abatements tend to pick winners and losers, he said, and tend to exclude local small businesses.

He also said he would like to be more inclusive of rural Nevada.

Democratic candidate Kyle Chamberlain said via email Tuesday that he would like to see increased oversight of tax abatements to ensure an adequate return on investment.

He also said he would like to see tax abatements used to incentivize small businesses and generally focus more on workforce development.

“I guarantee when we have a state-of-the-art education system, technology companies will be moving to Nevada and creating solid economic growth without tax abatments,” he said.

Democratic Clark County Commissioner Chris Giunchigliani and Republican Attorney General Adam Laxalt did not immediately return a request for comment Tuesday.

Contact Nicole Raz at nraz@reviewjournal.com or 702-380-4512. Follow @JournalistNikki on Twitter.