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April 23, 2024

Nevada offers 16 businesses $46 million in tax abatements

Nevada is offering more than $46 million in tax abatements to 16 businesses in exchange for new jobs and higher wages, the Governor’s Office of Economic Development (GOED) announced this week.

The state agency said the companies will bring at least 1,432 new jobs to Nevada within the next two years, paying an hourly rate of $31.83.

“I would like to welcome these great companies to Nevada who are making a major investment in our economy,” Governor Steve Sisolak said in a statement. “As we look to reskill workers whose jobs were displaced during the pandemic, these companies are creating skilled jobs with competitive wages.”

A total of 13 companies that are receiving abatements are in Clark County.

Jonas Peterson, chief executive of the Las Vegas Global Economic Alliance, said the companies “will not only help advance our region’s recovery but will diversify and strengthen the economy for years to come.”

The $460 million capital investments made by the companies will generate $256 million in new tax revenue over the next decade, GOED said.

The Ball Corporation is receiving more than $17.5 million in tax abatements over a decade in exchange for 178 new jobs within two years and 222 more jobs within five years. It’s also expected to make a $176 million capital investment.

Kroger will receive $3.8 million in abatements over 10 years to create 202 jobs at an average hourly wage of $26.53. The company is also expected to make a more than $40 million capital contribution, which is estimated to return more than $48 million in new tax revenues.

John Mozena, president of the Center For Economic Accountability, a think tank that opposes corporate welfare, told The Center Square that the tax abatements don’t make sense given the current operating climate for many businesses.

“Focusing on creating jobs when most businesses are struggling to find qualified employees is counterproductive,” Mozena said.

According to the latest data from the Bureau of Labor Statistics, Nevada’s unemployment rate stood at 7.7% in August, nearly twice the rate it held in August 2019.

Meanwhile, the pandemic not only changed the work habits of many Nevadans, but it also changed their perspective on working, according to a report by KTNV. Many parents are now staying home in order to save money on child care costs.

“We know folks are not coming back to work because they have child care responsibilities or family care responsibilities. A percentage of folks have decided to go ahead and retire,” Department of Employment, Training & Rehabilitation Director Elisa Cafferata told KTNV.

For Mozena, this shows that the tax abatement dollars could be better spent on “just about anything else.”

“These tax abatements rarely change how a business operates. In fact, most of the time, they are just extra rewards for doing something they were already planning on doing,” Mozena said.

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