Think tank to state: Keep your hands off business

CARSON CITY - Instead of offering cash and tax incentives to businesses that relocate or build in the state, the Nevada Policy Research Institute asserts in a study released today that government needs to keep its hands off business and let the unfettered marketplace return the state to economic glory.

The conservative think tank, in "The Pathway to Sustainable Prosperity," is highly critical of the decision by Gov. Brian Sandoval and the Legislature in 2011 to create the Governor's Office of Economic Development. The office has a $10 million catalyst fund and can offer tax incentives to companies that build in Nevada.

The report concludes that instead of helping business growth, the new office "moves in the opposite direction by forcibly seizing wealth through taxes to be used as financial incentives for firms that state bureaucrats have selected for public investment."

In the report, Geoff Lawrence, deputy director of policy for the Las Vegas-based think tank, states that government intervention in the economy led to the Great Recession in Nevada and that state involvement not only doesn't rebuild the economy, but also leads to cronyism by politicians.

"The path to economic recovery, then, lies not in granting even more control to political entities. Economic progress has always resulted from the free exercise of individual initiative and private enterprise," the report states.

Steve Hill, executive director of economic development department, said Monday he understands the institute's viewpoint on limiting government intrusion in business development, but noted a recent New York Times report found Nevada ranked 51st, behind all other states and the District of Columbia, in incentives it offers to attract businesses.

But he added it makes sense to have incentives available when situations are there to bring companies to the Silver State.

William Weidner, formerly with the Sands and now with Gaming Asset Management, was one of Sandoval's first appointments to serve on board of the economic development agency. But in the foreword to the study, he states that sustainable economic growth is only obtained through actions of private entrepreneurs. Weidner quit his position after the board approved its plan to attract businesses.

The institute also concludes that government regulations, minimum wage and prevailing wage laws and a "hostile regulatory environment" discourage a vital economy and growth.

In particular, Lawrence stated the prevailing wage law forces contractors to pay about 45 percent more to workers than they would in the open market.

The study also states government regulation inhibits competition such as blocking the expansion of the taxi industry and requiring expensive retrofits to businesses like Dotty's Gaming & Spirits tavern-gaming parlors.

In the regulation area, Hill said he supports many of the institute's initiatives.

"Improving the business environment is an important issue for business development," he said. "I don't know if Nevada is any worse than other states, but it is an issue of concern for businesses."

Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or 775-687-3901.