Editorial: State agency playing fast and loose with tax incentives

Let’s make a deal. What’ll it take to get you to close the deal? A little wheeling? A little dealing? A little quid pro quo? Pay no attention to the price tag. That’s for the suckers.

After a meeting of the Governor’s Office of Economic Development (GOED) this past week, the agency put out a press release boasting that it had approved “the creation of thousands of new jobs in Nevada through the expansion of existing Nevada companies, and companies that are moving to the state.”

GOED Director Steve Hill positively crowed, “We continue to see extraordinary businesses show interest in Nevada for a myriad of reasons, including location, available incentives, business friendliness and the quality of life. These companies will add to the gaining strength of our economy by creating thousands of jobs for Nevadans and continuing the narrative that Nevada is a great state in which to do business.”

Nowhere in the press release did it ever state what those “incentives” were. The word “tax” was nowhere to be seen.

Yet, in one meeting alone the agency magnanimously doled out a total of more than $6 million in tax abatements over the next 10 years to six different companies — five in Clark County, one in Washoe and none anywhere else in the state.

Apparently based on a strict mathematical calculation commonly known as a whim, the companies had their sales taxes slashed to a mere 2 percent for two years — instead of nearer 8 percent for those not so privileged — and their property and modified business taxes are being cut by either 25 percent or 50 percent for several years — depending on how good a deal each could wrangle.

The biggest tax forgiveness packages went to the multi-billion-dollar Internet marketer Amazon — $1.8 million — and something called TH Foods — $2.2 million.

There seemed to be little rhyme nor reason for the size of the largess in comparison to the relative benefit to the state and those taxpayers still required to pay the going rate. You know, the sticker price.

The numbers crunchers claimed one company would generate more than $68 in additional tax revenue for the state for every dollar of abatement, but another would generate only $2.50 for each tax dollar forgiven. Of course, that is pure speculation and conjecture.

Even though one of the stated reasons in the law creating such tax abatement incentives is to create high-wage jobs, only two of the companies so favored last week said their average hourly wages would exceed the targeted statewide average of $21.35 an hour and two companies reported their wages would be less than $15 an hour — one of those Amazon.

This wheeling and dealing was done despite the fact the Nevada Constitution clearly states, “The Legislature shall provide by law for a uniform and equal rate of assessment and taxation …” It ain’t uniform or equal if a select few get breaks while others don’t.

And pay no never mind to that part of the Constitution known as the Gift Clause, which 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, except corporations formed for educational or charitable purposes.”

Remember, that $6 million in tax breaks was from one single meeting of the ever so generous GEOD, which has already doled out billions of dollars in tax “incentives” to Apple, Tesla Motors, Faraday Future and countless other billionaires.

Hey, no peeking behind the curtain at the fact the 2015 Legislature just raised taxes by $1.5 billion on all of us who are too insignificant or too timid to cut special deals, nor at the fact the state is already running a budget deficit of $400 million.

For that $6 million in tax abatements this past week, the companies claimed they might create as many as 2,000 jobs.

In 2012 alone small businesses in Nevada created 15,000 jobs without asking for any tax abatements or credits. What does that make them? Rubes? Suckers?

A version of this editorial appeared this week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Amazon plans a warehouse in Nevada like this one in Phoenix. (AP file photo via R-J)

Amazon plans a warehouse in Nevada like this one in Phoenix. (AP file photo via R-J)

Newspaper column: The general theory of political relativity finds a growing divide in viewpoints

“Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment,” physicist Albert Einstein once observed of the stratification of our society. “Most people are even incapable of forming such opinions.”

The center keeps shifting to the left.

Illustrative of the shift is the way the media covers politics in Carson City. They describe as ultraconservative those who balk at the governor’s proposed increase in state general fund spending by $1.3 billion, while those Republicans who support him are moderates. Not liberals, moderates. That is the argot of the moment.

Albert Einstein

With the leftward shift, people have no qualms about saying that requiring gender specific bathrooms and locker rooms and showers in elementary school is “extreme” and “hateful.”

“I didn’t realize when I was growing up that I was a horrible segregationist because boys went to the boys bathroom and girls went to the girls bathroom. We want to maintain that,” Republican Ira Hansen was quoted as saying on this topic recently.

Things have changed, sir.

If you hint at the least bit of intolerance toward those who were once openly referred to as amoral, immoral or, heaven forfend, perverted, the tolerance lobby will beat the crap out of you — socially, legally and, occasionally, physically.

It doesn’t require a nuclear physicist to figure it out.

According to a recent Washington Post-ABC News poll, 47 percent of those surveyed approved of President Obama’s job performance. Among Democrats, 79 percent approved, and that was up 3 points from October. Among Republicans, only 7 percent approved, and that was down 4 points from the previous poll.

Divided and growing further and further apart.

Perhaps some of the credit or blame for the split in attitudes can be found in the news media trending away from the journalistic icon of the past century — objectivity.

In the late 19th century newspaper publishers changed their business model, which relied on income from selling copies of the paper and political patronage to one of relying on advertising revenue. Advertisers wanted the maximum number of eyeballs so papers dared not alienate any potential readers by being partisan.

Media of all types seem to be willing to show partisan stripes today.

There is also the Amazon Effect.

Computerized marketing works by reinforcing your previous choices by offering more of the same: “Customers Who Bought This Item Also Bought …” Click on a book by conservative radio talk show host Mark Levin and your helpful algorithm suggests books by Thomas Sowell, Newt Gingrich, Glenn Beck, Ann Coulter and Karl Rove. Type in the name of any liberal writer and you get the obverse of the coin.

A few years back the speaker at a national convention of newspaper editors was one of the gurus of computer-age marketing, Eric Schmidt, the chairman of the ubiquitous Google.

Schmidt noted that the computer can offer to broaden your exposure as well as narrow it. Obviously, for every synonym there is an antonym. It makes no difference to the machine.

The Google guy noted that, when people were given an option of “show me an opposing view,” two-thirds would never look at it.

Then there is the problem of hearing coherent messages above the cacophony of the information bazaar. According to Schmidt, from the dawn of human history to 2003 about five exabytes (a billion gigabytes) of information was created. He said we now generate that amount every two days. That was five years ago.

He also observed that of the news reporting in all those bytes, fully 80 percent of stories contained no original content, while of the remaining 20 percent, half came from newspapers.

Then, many don’t bother. A recent poll of Nevadans found 89.4 percent either did not know Sandoval supports the largest tax increase in Nevada history or mistakenly thought the governor supports keeping taxes low.

The explanation for why so many can observe the same event and reach different conclusions is outlined in my general theory of political relativity.

No observer is stationary. All are themselves in motion at different velocities, in different directions along the political spectrum from red to blue.

The theory goes something like this (e=mc²): The energy of one’s convictions equals the mass of one’s deductions times the speed of insight squared. Explosive.

A version of this column appears this week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel, the Lincoln County Record and the Sparks Tribune — and the Elko Daily Free Press.