(Thomas Mitchell, 4TH ST8) – Nevada keeps handing out money to Tesla Motors even though it is not coming close to living up to projections made when the Legislature in 2014 agreed to $1.3 billion in tax breaks and credits in return for the company building a $5 billion, 10 million-square-foot factory battery factory near Sparks.
This week the Governor’s Office of Economic Development agreed to provide Tesla with $8 million in transferable tax credits, bringing the firm’s tax credits to more than $35 million so far, even though the company has created only 331 jobs so far, well under the projected 1,700 jobs, according to a 2014 analysis of the project by Applied Economics.
The factory’s capital investment is also falling short — with only $600 million invested so far, compared to a projected $2 billion.
Since the company has almost no tax liability in Nevada the tax credits can be sold, presumably at a discount, to companies who owe taxes. Previously, Tesla has sold $20 million in tax credits to MGM. The certificate for the $8 million specifies it is to be applied to gaming licensing fees.
The projections provided lawmakers in 2014 forecast the plant would have 4,700 workers in 2017 and 6,500 in 2018. It also estimated an economic impact of over $100 billion over the next 20 years.
Mr. Mitchell publishes the 4TH ST8 Blog.
Column originally appears at 4TH ST8.