Mon, Jul 09, 2018 - Page 8 News List

A city getting ‘Tesla’d’

Tesla’s battery factory brought high-paid tech jobs to Nevada — but is soaking up huge tax breaks that critics say have seriously depleted public services

By Rory Carroll  /  The Guardian, SPARKS, NEVADA

A Tesla spokesperson said the company was investing in local education, including a high school manufacturing development program and a US$37.5 million plan to promote science, technology, engineering and mathematics.

Tesla receives credits based on jobs created, Ron Knecht, Nevada’s state controller, said in an interview. “They’re reaching their benchmarks significantly faster than expected.”

Current Tesla projections suggest the credits are justified even if the ultimate cost is unclear, said Knecht. “If it pans out the way it looks, it’ll certainly be good for the economy. The state may break even but we’ll never really know.”

A Republican, Knecht’s job is to protect taxpayers’ money. Figures from his office, supplied under a mandate for transparency in corporate welfare, show how much tax abatements reduced potential revenues for local authorities last year. In the case of Tesla it was US$68.7 million.

Credits to Musk’s company will soak up most of a tax revenue excess Nevada was due to record this year.

The state compensates local government, said Knecht. Had Tesla never come there would have been nothing to tax, so the cost/benefit remains murky. “You can get numbers all over the place.”

‘NET ZERO’

Here’s one number that applies to Sparks: zero.

Stephen Driscoll, the city manager, said despite surging population growth and increased strain on police and fire departments and schools, his annual budget had increased from US$65 million to US$70 million in the past two years — about the level of inflation. “So I’m at net zero.”

Critics of the system say there is no doubt who ultimately pays.

“It’s the working stiffs,” said Bob Fulkerson, of the Progressive Leadership Alliance of Nevada.

Schools in Washoe county, which includes Sparks, are overcrowded and deeply in debt, so much so that voters in 2016 approved a sales tax hike to help plug the gap. Even so, fresh budget cuts could eliminate bus routes for nearly 4,000 elementary and middle school students in an effort to save US$550,000.

Meanwhile, home owners have seen values soar — but not property taxes, which are capped. Plumbers, electricians and builders have bountiful job options.

“The factory is a good thing,” said Omar Alvarez, 28, a building contractor who earned US$18 an hour plus generous benefits at Tesla’s factory. “Well, as long as you actually work there.”

Residents on fixed incomes, in contrast, are facing surging rents, driving some to destitution and the brink of homelessness.

Trailer parks which were half-empty two years ago are now jammed, said Alicia Siever, who manages the River’s Edge RV park. Motels and shelters have also filled.

“I get depressed. All humanity has left the area,” said Pope, who used to work in an architect’s office. Her US$700 per month ground-floor motel room is a dramatic comedown from her previous apartments.

“But I’m grateful this place exists,” Pope says.

The unemployed transcriptionist declined to be named lest identification sabotage her last-ditch attempt to avoid eviction. Asked to name unaffordable luxuries, she replied: “Ice cream. Bacon. A movie ticket.”

A troubling question now hovers over Sparks. Is Tesla itself a winner or loser?

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