VICTOR JOECKS: Hollywood should pay its own way or stay away from Las Vegas

If only Democrats cared about helping students in low-income families as much as they care about helping Hollywood celebrities.

Assemblywoman Sandra Jauregui is sponsoring Assembly Bill 238. It would provide $80 million in annual transferable tax credits to production companies using the Summerlin Production Studios Project. The credits would be available for 15 years, meaning this handout could be worth up to $1.2 billion.

Proponents of the bill claim it will create jobs and diversify Nevada’s economy. Jauregui is calling it the Nevada Studio Infrastructure Jobs and Workforce Training Act. Howard Hughes Corp. and Sony Pictures would work together on the project. Those are big names.

“The privately financed $1.8 billion studio project is ready to begin construction as soon as possible, having already secured zoning commission approval,” PictureThisNV.com, a website promoting the effort, states. The site claims the project would create and sustain 15,000 jobs per year upon completion.

But all the glamour of Hollywood shouldn’t distract you from what this really is — a con job.

Sony can build a studio right now. It already has approval. But it doesn’t want to follow the same rules as other Nevada businesses. It wants taxpayers to give its customers a significant subsidy. Those transferable tax credits would be worth 30 percent of qualified expenses. This would be akin to a Strip casino demanding that taxpayers reimburse 30 percent of its guests’ travel expenses in return for building a new resort. Ridiculous.

Note the word “transferable.” This plan wouldn’t give production companies a 30 percent discount on their tax bill. That would be bad enough. Instead, it would allow them to sell the credits to other companies, such as MGM Resorts International. The production company gets cash, and MGM gets a tax benefit

There are many problems with this proposal. The most obvious is that government central planners shouldn’t be picking winners and losers in the economy. Sony should play by the same rules as everyone else. It’s unjust to force businesses to subsidize their competitors.

Consider the practical problems with the bill. One of Gov. Joe Lombardo’s priorities is reducing housing costs. This bill would artificially boost demand for construction workers and housing. Those factors would inflate home prices. This is no idle speculation. Look at what happened to housing prices in Reno after taxpayers subsidized the Tesla Gigafactory.

It would also increase the likelihood of a broader tax hike. New workers would increase the demand for government services. But Nevada taxpayers would be stuck giving away $80 million annually.

The bill would also require companies seeking handouts to set goals for “hiring a workforce that reflects the diversity of this state,” including gender identity and ethnic diversity. It also directs them to use minority- or women-owned businesses. Those quotas are wrong and likely illegal.

Finally, there’s the bitterest irony. Democrats are staunchly opposed to Opportunity Scholarship tax credits, which help low-income families afford private schools. Yet many Democrats are eager to throw $1 billion-plus in tax credits to a mega-corporation.

No thanks. If Hollywood bigwigs want to come to Las Vegas, they should pay their own way.

Contact Victor Joecks at vjoecks@reviewjournal.com or 702-383-4698. Follow @victorjoecks on X.