Taxpayer sues state for giving money to a competitor

The legal arm of a conservative Nevada think tank has filed suit in the state district court in Carson City in an attempt to stop the Governor’s Office of Economic Development from giving away taxpayer money to entice new company’s to move operations to Nevada and compete against existing taxpaying companies doing the same work.

The suit was filed by the Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation on behalf Michael Little, an alternative-energy entrepreneur and a taxpayer, because the GED is giving $1.2 million to a competitor SolarCity. Defendants are state of Nevada, GOED and GOED’s Executive Director Steven Hill. The GOED’s Catalyst Fund has a budget of more than $10 million.

Little owns Landfill Alternative, a company that converts recycled landscape trimmings into biomass.

Currently, Little runs his operation out of the Silver Dollar Recycling facility in North Las Vegas. That’s after the Southern Nevada Health District — wearing its “Solid Waste Management Authority” hat — pressured him for three years to shut down the operation on his rural Moapa Valley property.

Michael Little stands in front of his organic processing machine at the Silver Dollar Recycling facility in North Las Vegas.

“Nevada’s constitution clearly states that state government has no business picking winners and losers in the economy by subsidizing the favored,” said Joseph Becker, chief legal officer and director of the CJCL. “Subsidies from state government to private businesses are unconstitutional and directly harm both taxpayers and competing businesses.”

The Nevada Constitution states, “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation …” Where have I heard that before? Oh yeah.

Attempts to change this to allow state “investments” in private business have been rejected by state voters three times.

“Fully aware that Nevada’s constitution prohibits business subsidies by state government, politicians have tried to circumvent this constitutional prohibition by routing Catalyst Fund payments through local government agencies that it itself authorized to provide handouts,” Becker said. “But GOED is still selecting and approving the subsidy-fund recipients and may not contract with or delegate to others authority it itself does not have.”

The suit asks the court to: “Enjoin all Defendants from continuing the Catalyst Fund program or any such program that subsidizes private entities under the guise of economic development or any other such label.”

There was a big ceremony at Town Square this past August as SolarCity — a company that installs rooftop solar panels at homes, businesses and government buildings — opened its new Las Vegas office with the help of that $1.2 million grant from the GOED. It was in all the papers.

The company said at the time it had hired about 130 employees and planned to double its work force each year.

There was no mention of how many of those jobs were cherry picked from the half dozen companies in Las Vegas that already perform the same work and have been paying taxes here for decades.