Nevada Senators, from left, Ruben Kihuen, David Parks and Barbara Cegavske talk with Gov. Brian Sandoval, right center, at the Capitol, in Carson City, Nev., on Wednesday, Sept. 10, 2014. Sandoval called lawmakers into a special session to examine a deal that gives $1.3 billion in tax breaks and other incentives to bring Tesla Motors to Nevada. (AP Photo/Cathleen Allison)
CARSON CITY, Nev. — Critics argued Nevada lawmakers were gambling with taxpayers’ money as they began negotiating in a special session Wednesday over whether to approve an unprecedented package of up to $1.3 billion in incentives aimed at bringing Tesla Motors’ $5 billion battery factory to the state.
Gov. Brian Sandoval urged legislators in the two Democrat-controlled houses to seize an “extraordinary opportunity” to land the electric car-maker’s “gigafactory” and tens of thousands of jobs he said would help pull Nevada from its worst economic crisis in state history.
Legislative leaders expected to approve the package by Friday or sooner, and Assembly Minority Leader Pat Hickey, R-Reno, was among those predicting it would pass by an “overwhelming” margin.
Speaker Marilyn Kirkpatrick gaveled the Assembly into session at 12:43 p.m. She then accepted public comment on the floor and via Internet hookups in Elko and Las Vegas before calling a mid-afternoon recess to await the formal drafting of bills. Two had been written, but at least two more were in the works.
“It’s going to be a long, slow day — a lot of hurry up and wait,” Kirkpatrick, D-Las Vegas, told lawmakers of the session that could last one to three days.
The Senate was expected to begin debate Wednesday evening on the biggest part of the package: between $800 million and $1.1 billion to finance the abatement of Tesla’s various property and sales and use taxes, in some cases for up to 20 years.
A coalition of unions, teachers, environmentalists and minority activists urged lawmakers to move even slower in their consideration of the package they said was 14 times bigger than any previous subsidies the Legislature has approved.
“We’re betting the house, and my grandfather said, ‘Never bet more than you can afford to lose,’” said Bob Fulkerson, state director for the Progressive Leadership Alliance of Nevada. He said the nonpartisan Legislative Counsel Bureau should be asked to verify the Republican governor’s claims that every $1 Nevadans invest in the package will bring a return of $80.
“If that’s not true, then this house of cards could fall down,” Fulkerson told the Assembly during the public comment period. He added the governor’s plan leaves the door open for other corporations to “come feed at the tax-break trough.”
The package also drew fire from conservatives, including Lee Hoffman, a retired miner and chairman of the Elko County Republican Party, who said the Legislature was in effect picking “winners and losers” by extending the tax breaks exclusively to Tesla.
“They will benefit one specific company, one specific industry at the expense of other businesses, other taxpayers, other consumers,” Hoffman testified from Elko.
Outside the Capitol, backers of a Nevada film tax credit that would be gutted to help pay for the Tesla tax breaks protested with signs that read, “Keep Nevada Film Alive” and “Movie Industry Jobs Are Now.”
Sandoval, who ordered the special session, said the lithium battery factory and its 6,500 workers would generate more than 20,000 construction and other related jobs and up to $100 billion for Nevada’s economy over the next 20 years — a return on investment he estimated to be $80 for every $1 the state spends.
Little opposition has emerged among lawmakers since Tesla CEO Elon Musk announced alongside Sandoval on the Capitol steps last week that Nevada beat out California, Texas, Arizona and New Mexico for the factory expected to open in 2017. The venture is critical to cutting costs for Musk’s next line of more affordable electric cars.
On Tuesday, lawmakers toured the expansive site at the Tahoe Reno Industrial Center along U.S. Interstate 80, about 15 miles east of Sparks.
Even before Sandoval signed the order, dozens of lobbyists had registered to represent more than 30 companies and organizations at the special session, including labor unions, chambers of commerce, school districts, auto dealers, health care organizations, utilities, manufacturing and other trade groups, and even Black Rock City LLC — organizers of the annual Burning Man counter-culture festival.
