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 Assembly Speaker Marilyn Kirkpatrick promised scrutiny of the
legislation, which has drawn criticism from both ends of the
political spectrum, at a special session around noon PDT (1500 EDT).
"It's exciting that a company such as Tesla has chosen Nevada," said
Kirkpatrick, a North Las Vegas Democrat. "But the devil is in the
details."
Republican Governor Brian Sandoval last week called Nevada’s winning
bid against four other states a monumental moment. He said it would
change Nevada's economic climate and spur $100 billion in economic
benefits over the next 20 years.
The agreement the state hammered out with Tesla Chief Executive
Officer Elon Musk is among the largest tax subsidies in the nation.
Sandoval said the state's investment would pay off at an 80-1 ratio,
which critics say is wishful thinking.
"We think the 80-1 multiplier is disingenuous, and if that's wrong,
what else is wrong?" said Bob Fulkerson, executive director of the
Progressive Leadership Alliance of Nevada.
"Local governments are going to have immediate financial costs of
public safety, trash collection, schools," he said, "and existing
residents and taxpayers are going to have to pay for that."
The conservative group Americans for Prosperity slammed the
agreement as corporate welfare.
"This deal amounts to nothing more than a tax handout for a
politically connected billionaire," AFP State Director Daryn Iwicki
said in a statement.
He noted that Tesla officials had said the size of the incentives
was not the main reason they chose Nevada for the factory.
Musk has said the factory where it will build lithium ion batteries
in partnership with Panasonic Corp <6752.T> is crucial to Tesla’s
goal of mass marketing its next generation of electric cars by 2017.
As part of the plan, the company would get sales tax exemptions
estimated at $725 million through June 2034 and save more than $300
million in payroll and other taxes through 2024.
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Tesla would also receive $75 million in tax credits for up to 6,000
jobs created, $120 million for meeting state investment thresholds
of $3.5 billion, and reduced utility rates.
For its part, Tesla said it would contribute more than $37 million
over five years to Nevada’s education system.
Sandoval, who took office in 2011 when Nevada's economy was crushed
under the weight of recession, has made job creation and economic
development a cornerstone of his administration.
He has called the Tesla factory a catapult to attract high-tech
industries and diversify Nevada’s economy.
Sandoval said the 5-million-square-foot plant east of Reno would
mean 3,000 construction jobs and 6,500 jobs once in operation. His
office said it would spur an additional 16,000 indirect jobs and
boost the region’s gross domestic product by 20 percent.
(Editing by Cynthia Johnston, Curtis Skinner and Lisa Von Ahn)
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