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GOED board approves $330 million tax abatement for Tesla

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The Nevada Governor’s Office of Economic Development (GOED) board today approved a $330,250,366 tax abatement for Tesla in exchange for the company promising to make a $3.6 billion investment at its Storey County site. 

The approval is expected to create 3,000 new jobs at an average wage of about $33 an hour.

Gov. Joe Lombardo, who chairs the GOED board, praised the decision.

“Tesla has far exceeded every promise they made going back to 2014,” he said. “To date, they have invested $6.2 billion in Nevada, built a 5.4 million square foot Gigafactory which provided 17,000 local construction jobs and created more than 11,000 highly paid permanent jobs.”

Longtime activist Bob Fulkerson blasted the board prior to the approval.

“I am under no illusions that your minds are not already made up, but I can’t sit quietly while my revenue-starved state gives almost $2 billion in tax subsidies to the world’s richest man in less than 10 years,” he said. “This game has been rigged, just like 2014 when those proceedings were also shrouded in secrecy and Tesla pitted us against California and Texas in a bidding war that made the governor and legislature think we had to sell the farm.”

According to GOED, Tesla plans to add 4 million square feet in two new factories at its existing Gigafactory location. The new 100-gigawatt-hour battery cell factory will have the capacity to produce batteries for 1.5 million light duty vehicles each year. The other will be the company’s first semi factory, an electric truck with a 500-mile range.

Officials emphasized thousands of new jobs created as a result of the tax package.

“The Tesla expansion could create an annual economic impact estimated at $2.2 billion or $38 billion over the next 20 years,” GOED officials said. “The 3,000 people Tesla will employ will generate $209 million in annual wages by 2030.”

The Gigafactory has been controversial since first proposed more than a decade ago. Numerous critics said its presence contributed to a major housing crisis, increased traffic on Interstate 80 between Reno and Storey County’s TRI Center and a toll on affordability in the Reno area.

Numerous locals have been outraged by the announcement of the new tax abatement for the company. Many insisted tax packages should include provisions to mitigate any negative impacts the company generates by its presence and growth in the area.

“Thousands of new residents with the promise of great factory jobs will rapidly come,” Fulkerson added. “Rents will continue to skyrocket, forcing more locals from their homes. Unmet childcare and healthcare needs will be exacerbated.”

Nevada State Sen. Dina Neal last week called for a delay of GOED’s vote.

“It is time for the legislature to re-examine the delegation of authority for tax abatements,” Neal said. “The power of the purse is legislative. It is our job to balance the checkbook of the state’s budget, but under current law, there is an imbalance of power that prevents the Legislature from providing appropriate oversight and review of tax abatements.”

Others have been more recently critical of Tesla CEO Elon Musk and his behavior – both online and off – since acquiring Twitter and firing thousands of employees.

Tesla will start paying a minimum of $53 million a year in property and modified business taxes relating to the Gigafactory starting July 1, 2024, and in perpetuity thereafter, GOED officials added.

“Who will pony up the billions of dollars in new infrastructure costs to pay for all of this? It won’t be Elon or the one percenters here, it will be Nevada’s working class, thanks to Nevada’s regressive tax system,” Fulkerson said.

Bob Conrad
Bob Conradhttp://thisisreno.com
Bob Conrad is publisher, editor and co-founder of This Is Reno. He has served in communications positions for various state agencies and earned a doctorate in educational leadership from the University of Nevada, Reno in 2011. He is also a part time instructor at UNR and sits on the boards of the Nevada Press Association and Nevada Open Government Coalition.

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