Nevada is giving more than $1 Billion in tax breaks to woo automaker Tesla to build a huge factory to produce electric batteries.
The deal is controversial but not among Nevada legislators, who expect it to produce economic benefits and 6,500 jobs.
Education also produces economic benefits and jobs, but legislators don’t mind underfunding their schools, increasing class sizes, and short changing the next generation of Nevadans.
The Néw York Times says that Nevada is paying about $200,000 for each job that might be created.
Did Tesla really need the tax break to locate in Nevada?
“Richard Florida, a global research professor at New York University and a frequent critic of development incentives, said the factory would probably have been built in Nevada even without the generous subsidy.
“They had the site picked out; they started on it,” he said in an email. Companies like Tesla “exploit that information asymmetry,” creating uncertainty in a potential host state, he said. “They know where they want to locate, and then essentially game the process to get incentives from states. It is wasteful and it should be banned.”
Angie Sullivan, a teacher in Nevada who keeps me informed, sent out this Roseanne Barr video as a reaction to the Tesla handout: https://m.youtube.com/watch?v=0hmfBtk0WaE
Diane Ravitch's blog 
Tesla deal includes money for Nevada education
http://www.8newsnow.com/story/26521452/tesla-deal-includes-money-for-nevada-education
“Tesla will give $37 million to kindergarten through 12th grade education over five years, where students will receive science and technology training.”
…
“UNLV will also get a piece of the pie under the law. Tesla is now committed to providing $1 million toward battery research at UNLV. Lawmakers say this will start putting the state’s workforce in a position to take these new Tesla jobs”
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Roughly $5 million a year to K-12 compared to a tax shift onto families and small business of $1 billion. Seems like a sweet deal for Tesla, especially since they are demanding what is essentially a job training program for future Tesla workers out of that $5 million. It would be better to have local communities, teachers, and parents deciding how their kids are educated, not some corporate exec.
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Sorry roughly $7 million…. need another cup of coffee. Up all night planning CC curriculum so the State can tell me how much I stink as a teacher.
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Let’s see Tesla gets $1,000,000,000 for the “bribe” of ‘giving” $37,000,000 towards education, or to put it in more understandable terms, they “give back” $37 dollars of our tax monies for each $1,000 of our tax monies they receive. What a wonderful bargain for the taxpayers.
Where can I sign up for that kind of welfare????
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That additional money put toward battery research at UNLV is also tax deductable! The jobs are said to be paying around $10.00 per hour, hardly high wages. There is also the matter of deferred road construction in southern Nevada to allow for road construction near the factory, a real sticking point since last week when washed out roads led to kids staying overnight at school in my area. Overall, the state did a lousy job of negotiating this.
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The money for Nevada schools is a “gift.” As you may know gifts are not enforceable. It is a brilliant piece of maneuvering on the part of Tesla. This “gift” does not get made to the “gift” fund of the education budget until after the audit of Tesla’s business for the transferable tax credits.
Do you trust a political appointee with everything to gain by having the photo opp with a giant check for $7.8 million to adequately perform the audit which could hold up the “gift.” In the end Nevada schools could lose out on a whole lot more revenue in the rush to get the “gift.”
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While I am generally opposed to the states competing to the lowest common denominator just to get big corporate sites (why don’t all the governors get rid of this phenomenon by simply mutually pledging to veto all such deals – then the states would be on equal footing without harming themselves every time), I must admit that I’d rather see Tesla get a handout than just about any other big corporation in America. They are the only company that has made successful inroads into actually altering the fossil fuel assumption in our culture, and this is just as important for the future of society and the world as our schools (and I say that as a huge advocate for school funding and teacher control).
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That Roseanne Barr video was great and in a quick minute she encapsulated all that is wrong with these incentives to attract corporations to the states. That is one of the big problems in this country: the corporations force the states to engage in bidding wars to attract businesses and “create” jobs. So the corporations get subsidies, tax breaks, tax abatements, sometimes free land and various other sweet heart deals to locate in a given state. If the corporations aren’t paying their fair share in taxes, then either the tax payers have to make up the difference or services have to be cut (such as aid to education). In NJ, Christie is constantly whining, yammering, blabbering and bloviating that taxes are too high on the corporations, that NJ is the most corporate unfriendly state in the known universe and we must lower taxes on businesses (on corporations) now, NOW, NOW!!!!!!!!!!!!!!!!!! He wants to balance the budget by destroying the teachers’ and other public employees’ pensions. I recently heard a nauseating segment on Nightly Business News in which some corporate CEO was whining and yelping that US corporations pay the highest corporate taxes in the world. I was so angered by this phony baloney bilge that I nearly threw the TV out of the window.
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“Neutral third party” StudentsFirst hires another totally neutral, non-partisan agnostic to lobby the legislature in Michigan:
“Former state House Representative Paul Scott earned a reputation during his time in office as one of the most anti-teacher legislators in Michigan. In his position as the Chair of the House Education Committee, he oversaw some of the most egregious attacks on teachers since Republicans swept into power following the 2010 election. It was bad enough that, eventually, Scott was recalled by voters in his district. The recall had a long and convoluted history with Scott attempting – unsuccessfully – to have the courts throw it out three times. In one of his attempts, he used the ludicrous rationale that he himself had created too much confusion for the recall to continue.
As the Chair of the House Education Committee, he shepherded multiple pieces of legislation written by them through his committee, legislation which did things like making illegal teacher strikes more illegal. In a leaked internal document from 2011, StudentsFirst thanks Scott for “overseeing the entire process” and gives credit to House Policy advisor Jason Mancini for “literally [running] every amendment by me before deciding to allow it in [Scott’s] committee. During Scott’s recall, a whole host of anti-teacher corporatist groups, including StudentsFirst, contributed enormous amounts of money to help him win. StudentsFirst, in fact, contributed an astonishing $73,000 to help Scott save his job.”
http://www.eclectablog.com/2014/09/disgraced-recalled-homophobic-former-education-comm-chair-paul-scott-now-a-lobbyist-for-anti-teacher-group-studentsfirst.html
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Adding insult is the fact that I believe Nevada is the only state where Lithium for the batteries is mined. Now that money that Nevada; excuse me, the taxpayers of the state will pay to subsidize those jobs and the company could have been better spent. Just my opinion.
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Mark, you are correct, Tesla would have been buying from us in any case, now they save on the shipping cost. We get to pay. To Cynthia, just remember your sentiments when business loots the infrastructure where you live and tells you it if to your benefit.
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cx, is to your benefit.
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As a liberal Nevadan, I have mixed feelings about the state having enticed an alternative energy company to locate in our state. I’ve always felt that corporations are getting a free ride at taxpayer’s expense and that tax breaks go to some of the worst of the worst. However, it is mandatory that I argue against what I see as the main thesis of these objections to the misallocation of tax revenue and the give-aways. I just responded to a similar piece by Russell Simmons elsewhere about the excessive expenditures on prisons and will spare myself some time by copying here. I look forward to the rage of the usual school supporters.
Mr. Simmons is spot on about the growth of the prison industry and the lack of money spent on schools and education. However, our schools have made major contributions to these chronic and worsening problems and are in part responsible for the mentality that focuses on punishing victims and blind obedience to flawed authority. Schools can provide valuable services, such as training, inculcating children into the culture (indoctrination), socialization, and babysitting for over-burdened parents. However, education is another matter altogether. Spending money on schools does little to advance education. The primary reason for this is that compulsory attendance makes necessary an authoritarian bureaucracy with a hierarchy and politics and a dysfunctional curriculum that has nothing to do with producing better citizens or promoting health and authentic education. If Mr. Simmons wishes to see the current trends reversed, he should spend his resources and time working to eliminate these destructive laws. School “reform” and privatization are impossible attempts to fix what can only be fixed by a radically new paradigm where autonomy and student initiative are priority one. How many more centuries will it take for this message to penetrate our school cults and our gullible public? PS. Those fools who are obsessed with undocumented children should go back to school – no, I take that back; they should turn off the idiot box and especially Fox Noise and work on getting an education for themselves. End of copy from response to Simmons article.
Yes, I said it again. It’s time to get real. Pumping more money into schools that prepare people for menial labor, uninspired and unintellectual pursuits and conssumerism, and prison is insane. People who insist on pretending that everything has been OK in schools in the last century are lying to themselves and doing a terrible disservice to youth and the country. You can lead a horse to water, but forcing a child to go to school (at least by the state) is abusive and destructive.
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As a liberal/progressive New Jerseyan, I must say that I am totally baffled by Barry’s dark views of public education. What is the alternative to “forcing” a child to go to school? Home schooling? Send the kids to Finland?
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I’m not sure. Is Barry advocating home schooling? We have that in Ohio. No one is forced to attend public or charter school. But I do get home schoolers frustrated by high school math insisting they earned all A’s in home school. By pumping money into schools, does that imply all teachers are volunteers? Not sure what is being said here.
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Mark and Old Teacher – Tesla’s tax incentive and savings on shipping costs is just a piece of the pie. Another big piece is the mining industry not paying their fair share of taxes. It sickens me.
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Mining and the casinos own Nevada, they have since the gilded age, and they will for the foreseeable future I fear. I shall not miss Nevada when I retire and leave.
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I daresay that any city, county or region that has an economic development council and any State that is “open for business” (we’re looking at you Scott Walker) is diverting public funds that could be used to improve schools or infrastructure into private coffers… and the same goes for urban areas who want to attract an NFL team.
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One more comment— or link— with a Hat Tip to Greg Easterbrook, ESPN’s Tuesday Morning Quarterback for this gem: http://www.goodjobsfirst.org/accountable-usa.
This web site provides a state-by-state summary of taxpayer giveaways… NH, my state forfeited at least $500,000 in property taxes to Walmart… that would be at least 10 teachers in districts who made these deals…
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Reblogged this on Network Schools – Wayne Gersen and commented:
The giveaway of tax $$$ to corporations seeking to maximize profits is one of the continuing themes of this blog… and as noted in my comment at the end there is a web site that can be used to see just how much YOUR state gave away: http://www.goodjobsfirst.org/accountable-usa
Thanks to Greg Easterbrook for this lead!
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The Senate Majority Leader Harry Reid sent out this press release. After two days – yes two – my state comes up with a total package of almost $2 billion in incentives to give to TESLA.
http://www.reid.senate.gov/press_releases/2014-09-15-reid-remarks-on-tesla
Besides the financial incentives and tax breaks – the state will build roads costing $150 million, up-date the airport, give TESLA the gray water (a priceless commodity in the desert), support the world’s largest battery factory with infrastructure like fire department, police etc that does not currently exist.
Unions were not allowed to add language about prevailing wage. 50% of employees are required to be hired from Nevada – but at the last minute the legislature added waiver language. So Nevada sold its soul for 6,000 jobs – they might not even go to the people from Nevada.
I continuously question WHY Nevada can produce a world leader like Harry Reid who can manipulate huge deals and even empires but my state still struggles with basic public school funding.
Majority Leader — if you can find $2 Billion for TESLA – you certainly can find the same for schools. Harry Reid your schools are the worst in the nation – no one is graduating!
http://www.lasvegassun.com/news/2014/apr/28/nevadas-high-school-graduation-rate-worst-nation/
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