CARSON CITY — A $10 million fund set up to entice businesses to come to Nevada is “the most efficient economic development tool” in the state and has surpassed projections for job creation, the head of Nevada’s economic development agency told lawmakers Tuesday.
The Catalyst Fund created in 2011 provides grants to companies looking to relocate or expand in Nevada. The goal at the outset was to reap 2,500 jobs for a state hard hit by the recession, Steve Hill, executive director of the Governor’s Office of Economic Development, told members of the Senate Finance Committee.
Since then, 14 companies have been awarded grants totaling about $10 million, bringing a promise of more than 3,800 jobs, Hill said.
The program “has been exceptionally successful and important,” Hill said. “It was a significant part and in many cases the difference between these companies being in Nevada or not.”
No Catalyst Funds were used to persuade Tesla Motors to build a massive, $5 billion battery plant in Northern Nevada. The company headed by billionaire Elon Musk was awarded $1.3 billion in other incentives.
To date the largest Catalyst Fund grant has been $1.8 million to financial services company Barclaycard US, followed by $1.4 million to lottery giant Scientific Games.
But the program has been criticized and challenged in court by the conservative think tank Nevada Policy Research Institute, which argues it amounts to government picking winners and losers in the private sector.
Gov. Brian Sandoval’s $7.3 billion budget proposal includes another $10 million to continue the program for the upcoming biennium, as well as $10 million for the Knowledge Fund, a separate account used to support research, innovation and commercialization of ideas in Nevada. Applications are submitted by the Nevada System of Higher Education.
Six projects have been funded, including the Nevada Institute of Personalized Medicine and the Center for Gaming Innovation, both housed at the University of Nevada, Las Vegas.
Thomas Piechota, vice president for research and economic development at UNLV, said personalized medicine involves using DNA to customize medication to a particular patient. The Knowledge Fund grant of $2.5 million is being used to bring in faculty to help with research and development of new intellectual property, he said.
He added that the project also is in step with the planned UNLV medical school.
Economic development has been a cornerstone of Sandoval’s administration since he took office in January 2011. The governor’s agenda for his second term focuses on improving Nevada’s education system to support a high-tech economy. To do that, he has proposed a $1.1 billion tax package.
Hill spent much of Tuesday testifying before separate money committees and revenue committees, touting the agency’s successes and the critical need for an educated workforce. He wrapped up the day testifying before the Senate Revenue Committee.
Senate Majority Leader Michael Roberson, R-Henderson, chairman of the committee, said the panel would meet at least three times each week, maybe more, and consider any and all tax proposals. He hopes to move a tax reform package out of the Senate by the end of March.
“Gov. Sandoval has proposed an ambitious reform agenda,” Roberson said. “And an important piece is the need to increase revenue to ensure success.”
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