Large companies seeking tax breaks and other public incentives to set up shop in Nevada should pay fundamentals such as child care and housing for employees, according to a committee appointed by Gov. Joe Lombardo. 

Ann Silver, CEO of the Reno-Sparks Chamber of Commerce, was appointed by Lombardo during his transition period to chair a committee on workforce development. She says Nevada is giving away the house by bestowing billions of dollars in tax incentives without securing help for workers struggling to pay rent and child care. The state’s incentives, she says, should reflect its needs.

“My sense would be, If we’re going to give millions of dollars in tax abatements and incentives, the carrot should be ‘What will you do to alleviate the desert of affordable rentals or houses or childcare?’” says Silver, adding the report also recommends providing training for jobs that exist, rather than those the state aspires to have. 

The Transition Workforce Development Working Committee was made up of experts from throughout the state. 

“I didn’t know most of them, but we were all of a like mind, which was a consensus for consolidation of workforce and within the circle, if workforce is at the center, one of the hubs of the wheel is housing, one is childcare, another is transit,” Silver said.  

The governor’s office declined to provide the Current with a copy of the committee’s recommendations, which were submitted in early January.

“That report will remain internal at this point, but Governor Lombardo looks forward to introducing workforce reforms in the coming weeks,” spokeswoman Elizabeth Ray said via email.

Workforce programs ‘not aligned, much less coordinated

“There may be no more dysfunctional part of state government than in the services provided to our workforce,” Lombardo said in his State of the State speech last month. “Delays, fraud, and system failures have become commonplace.”

The federal government provides close to $200 million a year to the state for training to increase workers’ employability and pay. Lombardo noted a hodgepodge of state agencies, the university system and local governments oversee the funding.  

“They are not aligned, much less coordinated,” he said. “We don’t make it easy to access programs to help would-be workers with transportation or childcare because that’s in a different department.”

Child care subsidies are available to people in training or education programs via the Children’s Cabinet in northern Nevada, and from the Urban League of Las Vegas in the south, according to the Department of Employment, Training, and Rehabilitation. Funding is provided via the Child Care Development Fund, 

“Clients can be eligible for subsidy benefits while attending vocational school, GED preparation, or an employment preparation program,” says Chelsea Sliter of the Children’s Cabinet. 

Eligible clients must participate for at least 20 hours a week in:

• A post-secondary institution that offers vocational educational programs; or
• A program which provides for the completion of the equivalent to a secondary school diploma (such as a GED); or
• A program that offers defined and verifiable employment preparation training.

The Children’s Cabinet and the Urban League of Las Vegas were unable to say how many trainees they assist with subsidies each year. The state was also unable to provide data. 

Silver says the lack of disclosure is emblematic of the state’s workforce training effort in general, which she says is bereft of accountability. She says the committee attempted to review accountability measures already in place. “We couldn’t find out what they were.”  

Last year, the Children’s Cabinet received $50 million as part of a $571 million child care funding blitz paid for by the American Rescue Plan and CARES Acts.  The Governor’s Workforce Development Board issued a report last week questioning the disposition and use of those funds. 

“If we’re going to entice a company with tax abatements or whatever the package is, there should be a discussion about not just the dollars and cents, but where are those dollars and cents going?” says Hugh Anderson, chairman of the GWDB.  “We can keep aspiring to diversify the economy and all the other stuff that we have talked about for many years. But until we get the basics, the foundational aspects – child care, health care, education – remedied, we’re not doing any of that.”

“Affordable, accessible childcare is one of the major obstacles that keeps many people from the workforce. When it doesn’t pencil out to pay for childcare, you’re going to stay home to take care of your children,” Silver said.  

The average cost of infant care in Nevada is $951 a month, 8.7% less than the average rent, according to the Economic Policy Institute.  Care for a 4-year-old is $754 a month. 

Infant care for one child amounts to 20% of median family income in Nevada. By federal standards, care is affordable if it costs no more than 7% of household income. 

“By this standard, only 6.8% of Nevada families can afford infant care,” says EPI. 

Silver said when the state was “bartering with Elon Musk, why wasn’t it posed to him ‘We’ll give you X if you build on-site childcare for 6,000 employees,’ Or ‘will you build X number of affordable, easily accessible housing units?’ One or the other, or both would be in my request to any corporation moving to Nevada, and there are plenty.”

Free market. Free ride?

As a candidate, Lombardo, a free-market enthusiast, rejected affordable housing proposals such as rent stabilization and inclusionary zoning. Instead, he said he’d “provide incentives and defer payments on land” to generate more affordable housing.

But Nevada has a record low labor force participation rate according to the Department of Labor, a factor that could make employee perks such as housing and childcare more palatable and even necessary to employers such as Musk, who may be challenged in a time of low unemployment to find 3,000 workers to staff two new plants. 

In 2014, Musk negotiated tax breaks valued at $1.3 billion. This week, officials, including Lombardo, are scheduled to consider a new package of incentives for Musk that could once again reduce his cost of doing business. State Sen. Dina Neal, chair of the Senate Revenue Committee, last week called on the Governor’s Office of Economic Development to delay that meeting to allow public review of the incentive package. But the governor’s office said the meeting will proceed as planned.

Silver says the concept of company housing is “not exactly new. Whether it was Boeing or Ford Motor Company, when large corporations were getting started, the way to hire was to build workforce housing. It may not be where you want to live your whole life, but many families were raised in company towns.” 

Too many cooks

In his state of the state speech, Lombardo proposed a single Office of Workforce to oversee the tangle of workforce training revenue streams and the programs they fund.

“That’s just what our committee recommended,” Silver said, adding she was “thrilled” to hear Lombardo mention the topic, and says she’s hopeful he’ll embrace the committee’s recommendations.

Like Lombardo, Silver would like to see the alphabet soup of agencies and the hundreds of millions divided among them poured in a single pot.  

“There are so many agencies that have their finger in the pie,” she says, describing the different missions of GOED (Governor’s Office of Economic Development), GOWINN (Governor’s Office of Workforce Innovation), DETR (Dept. of Employment, Training and Rehabilitation), and OSIT (Office of Science, Innovation and Technology). “It would make it easier to take all the federal money that’s coming into Nevada for workforce development, and consolidate it under one agency responsible to both people seeking work and employers seeking employees.”

Nevada’s federal workforce training plan, in an effort to attract employers in science, technology, engineering, and mathematics (STEM), and turn out higher-wage earners, prioritizes skills “to meet the demands of its growing economy.” 

But Silver says the training is often focused on jobs the state aspires to have, rather than those it needs to fill. “That’s something our committee really focused on.” 

“All three grants I received today from two different agencies are for STEM-related training,” she  said during an interview last month. “I represent 2,200 businesses. I would say five of them are advanced manufacturing firms. Meanwhile, small businesses provide all the goods and services to everyone in the state.”

“Saying that we need to train more STEM workers or we need to train everybody for advanced manufacturing, belies the fact that 93% of Nevada’s small businesses don’t need the same qualifications, and only want to find a warm body that they can train for a job,” she says. 

The Workforce Innovation and Opportunity Act (WIOA) provides about $24 million in federal funding to the state to train adult job seekers, dislocated workers, and youth via a network of providers overseen by Workforce Connections in the south, and Nevadaworks in the north.   

In 2018, Nevada served fewer than 5,000 trainees through WIOA – 1,202 youth and 2,469 adult clients in the south, and 888 clients in the north.

“The real issue is where is all the money going, how much does Nevada receive for job development and training and what are the actual outcomes?” asks Silver. 

The Reno Chamber, under Silver’s direction, is bypassing the workforce training system and turning directly to businesses to provide training, and in some cases reap a federal tax credit in return. 

The Work Opportunity Tax Credit (WOTC) is available to employers who invest in job seekers who face barriers to employment.  Employers may be eligible for a tax credit if they hire an individual from a so-called targeted group, such as a veteran, an ex-felon, a recipient of SNAP benefits, or a long-term recipient of family assistance. 

Anderson notes casinos, especially in Southern Nevada, once offered on-site child care.  “Apparently, none of that exists anymore. Our question is why?”

He says the board is looking into putting underutilized corporate space to use “and providing incentives from a policy perspective that would encourage employers to consider those endeavors.”

But as Nevada tries to address challenges within existing workforce programs, Anderson said Tesla and other large employers who are provided state incentives when they relocate here  should be on the hook to help provide the child care, health care, education and other basics. 

“There should be a quid pro quo in terms of those fundamental things that will help the vast majority of society participate in these opportunities,” he says.