Posts Tagged ‘Apple’

Nevada Think Tank Publishes “Piglet Book” Citing Government Waste

By Sean Whaley | 2:01 am October 24th, 2012

CARSON CITY – From double-dipping employees to the questionable use of credit cards, the newest edition of the Nevada Policy Research Institute’s “piglet book” released today offers highlights of recent questionable government agency actions.

The Nevada Piglet Book 2012” is authored by Geoffrey Lawrence, deputy policy director for NPRI, a libertarian think tank based in Las Vegas. The third edition comes out as lawmakers prepare to return to the capital for the 2013 legislative session.

In the 40-page report, Lawrence also reviews and raises questions about recent political and policy developments in Nevada, including the successful effort by Gov. Brian Sandoval and others to lure Apple to Reno, and U.S. Sen. Harry Reid’s efforts to promote green energy projects in the state using taxpayer subsidies.

“While Reid regularly trumpets these deals as ways to ‘create jobs’ in the state, these deals – it’s clear upon review – are really about transferring wealth from taxpayers and electric ratepayers to campaign donors and allied politicians,” Lawrence writes in the report.

He cites the work of fellow NPRI staff in criticizing the effort: “Since 2009, with Reid’s backing, over $1.3 billion in federal taxpayer subsidies has gone into renewable-energy contracts in Nevada. Yet the projects those subsidies fund are projected to create only 288 permanent jobs in the state – a cost to taxpayers of $4.6 million per job.”

Reid has strongly supported green energy development in his Senate career. His website says: “Our country is too dependent on oil and fossil fuels, which pollute our air, place our economy and national security at risk, and contribute to climate change. As the Senate Majority Leader, I am working on building a clean energy future that will help provide Americans safe, reliable, and affordable supplies of clean energy.”

As to the decision by Apple to build a data center in the Reno area after receiving large tax breaks, Lawrence said in the report: “To help it win the tax breaks it sought, Apple hired lobbyist and Sandoval adviser Greg Ferraro to represent the company before the Governor’s Office of Economic Development – where insider Ferraro was already under contract to perform public relations work for $200 per hour.”

This relationship was reported by the Las Vegas Sun in August. Ferraro told the Sun he personally represented only Apple in the dealings that netted the company $89 million in tax breaks, not the state as well.

While some of the information in the Piglet Report comes from reporters and others looking into questions at all levels of government, many issues cited are uncovered by government agencies themselves through audits.

“Most people don’t follow audits, they don’t read them, so they don’t know what they say, and the problems that some of the cities and counties and state have had,” Lawrence said in a telephone interview in advance of the release of the report. “So this is kind of a nice way to make that information more easily accessible to the public.”

The audits are an important source of information on the activities of government agencies, but not all entities, including most counties and many cities, do not have an internal audit function, he said. Getting local governments to invest in such reviews would be a benefit to the taxpayers, Lawrence said.

Lawrence also cites a Nevada News Bureau story in the report regarding some questionable use of welfare cash grants, called Temporary Assistance to Needy Families (TANF), by recipients.

“Over a seven-month period in 2011, Nevada TANF funds were withdrawn in 35 different states, Guam and the District of Columbia,” he said. “About a hundred withdrawals took place in liquor stores. Others took place in casinos and slot parlors. Some occurred in tourist destinations like New Orleans, Hawaii, Angel Stadium, Magic Mountain, SeaWorld San Diego, Knott’s Berry Farm and Pier 39 in San Francisco. While withdrawals of this nature were a minority, they indicate that at least some welfare payments went to fund indulgences – not necessities.”

The book, and other transparency efforts by NPRI, does have an effect on policy makers, Lawrence said. One example was the successful push for electronic reporting of campaign contribution and expense reports by candidates and elected officials, which was sought by others as well in the 2011 session including Secretary of State Ross Miller.

“These transparency issues especially are things that resonate with people on every end of the political spectrum,” Lawrence said. “So it’s easy for the public to get behind each of these measures. It’s perhaps a little more difficult for lawmakers who may not want to make things quite as transparent.”

But for everyone else the changes are clearly a benefit, he said.

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Audio clips:

Geoffrey Lawrence, deputy policy director for NPRI, says the report presents an easy-to-read review of questionable government activity:

102412Lawrence1 :24 to the public.”

Lawrence says people of all political persuasions support transparency efforts:

102412Lawrence3 :27 to our benefit.”

 

 

Nevada Economic Board Signs Off On Apple Tax Breaks But Finds Oversight Authority Limited Under New Law

By Sean Whaley | 4:58 pm August 1st, 2012

CARSON CITY – The state Board of Economic Development today unanimously signed off on a package of tax breaks to bring Apple to Reno, but the panel found it had little authority over the deal reached after several months of closed-door negotiations.

The board, chaired by Gov. Brian Sandoval, unanimously recommended that Steve Hill, executive director of the Nevada Governor’s Office of Economic Development, enter into the contract with Apple that will provide an estimated $89 million in tax breaks to the company over the next decade.

Hill, in briefing the board on the agreement with Apple to build a data center and related facilities in the Reno area that are expected to bring $1 billion in investment over the next ten years, said the state authority over the deal was limited once it was approved by the Washoe County Commission and other local government entities.

Hill said the value of the sales and personal property tax breaks has to be put into context, which is that the state will receive between $16 million to $20 million in taxes over 10 years that would not have come to Nevada without Apple’s decision to open the facility in Reno, along with more than 300 well-paying jobs.

The tax breaks can be withheld if the company does not make the minimum required investment, he said.

Sandoval said that despite the limited authority to weigh in on the deal, the review by the board was important because a lot of important questions were raised and answered in the public forum.

He said the agreement is a great deal for Nevada because it is bringing a major company to the state that could have decided to go elsewhere.

“It’s going to provide new jobs and investment into the community,” Sandoval said. “It is perhaps, and I’m hoping that as we go on, will be a catalyst for other companies to come here.”

Apple is expected to start construction as soon as the contract spelling out the agreement is finalized later this month, he said.

“There is no reason to believe that they won’t fulfill all of the promises that they have made both to the Nevada Governor’s Office of Economic Development, to Washoe County, to the City of Reno and the Washoe County School District,” Sandoval said. “I think this is a win all the way around and I for one am very excited and proud to be a part of this first recommendation by the board to put to the executive director to move forward on this project.”

If there is a need to clarify some aspects of the approval process that resulted in the deal, any proposed changes can be taken up with the Legislature when it convenes in 2013, he said.

Board members, including representatives of the private sector, asked many questions during a two-hour review. There was no comment from the public.

Member Ross Miller, who is also the Nevada Secretary of State, asked Hill if there was the opportunity to make changes to the agreement in some areas, such as seeking some assurances that the construction aspect of the project will employ Nevada residents.

Hill said no such changes could be made without starting the negotiation process all over again.

After the meeting, Miller said the new process, created as a result of legislation last year establishing the new economic development office, is a major departure from past practice.

“The role of the board in approving these abatements is very limited,” he said. “And that’s a significant change from the previous process where the commission actually voted and approved these abatements. Our limited role today was to essentially determine whether or not they met procedural requirements.”

Those requirements included whether the company had a Nevada business license and whether they were going to make more than $500,000 in capital investment, Miller said.

“Our role at this point appears to be primarily ceremonial,” he said. “We provide advice and input but don’t have any real substantive oversight over the process.”

The Legislature in 2013 should consider expanding the board’s oversight, Miller said. The board did not have an actual contract to review, only a set of bullet points.

“Make no mistake, these are substantial abatements for a 30-year period,” he said. “And that’s not insignificant. And so we want to make sure that these terms are clearly defined and that the public has a very clear understanding of what we’ve committed ourselves to.”

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Audio clips:

Gov. Brian Sandoval says Apple’s move to Reno could be a catalyst for other companies to relocate:

080112Sandoval1 :11 to come here.”

Sandoval says Apple will live up to its commitments:

080112Sandoval2 :28 on this project.”

Board member Ross Miller says the role of the new board is limited:

080112Miller1 :18 met procedural requirements.”

Miller says the board does not have any substantive oversight:

080112Miller2 :11 over the process.”

Miller says the public has to have a clear understanding of such agreements:

080112Miller3 :13 committed ourselves to.”

 

 

Report Evaluates Success Of Incentives In Western States, Finds Fewer In Nevada Due To Tax Structure

By Sean Whaley | 10:55 am August 1st, 2012

CARSON CITY – A new report from The Council of State Governments exploring the successes that 13 Western states have had with tax incentives to encourage economic growth found that Nevada has fewer such programs in large part because of its tax structure.

Nevada does not have a personal income tax, unitary tax, corporate income tax, inventory tax, estate and/or gift tax, franchise tax, inheritance tax or special intangible tax, notes the report “Trends in Western State Business Incentives” released today by the CSG.

The report found that Nevada does offer some incentives, including sales tax abatements on capital equipment purchases, a sales and use tax deferral on capital equipment purchases, abatements on personal and modified business taxes and real property tax abatements for recycling.

In addition, the Nevada Train Employees Now Program provides short-term, skills-based intensive job training to assist new and expanding firms to reach their productivity goals quickly.

“While state leaders may not agree on what strategy is best when it comes to reviving our economies, learning how our neighbors are innovating and pushing through tough fiscal times can help guide us as we move forward,” said Nevada Assemblywoman Debbie Smith, D-Sparks, chairwoman of CSG West Fiscal Affairs Committee.

Nevada Assemblywoman Debbie Smith, D-Sparks.

“This report adds to our knowledge base and gives policymakers another tool as they look for better, more efficient ways to bring jobs back into our communities and get our states back on track,” she said in a press release announcing the release of the document.

While Nevada’s incentives may be more limited than those in other Western states, they are playing a major role in the state’s successful effort to bring Apple to Reno to build a new data center and related facilities that are expected to bring $1 billion in investment over the next decade. Part of the deal includes $89 million in sales tax and personal property tax abatements.

The tax breaks will be discussed today by the state Board of Economic Development, which includes Gov. Brian Sandoval, a strong advocate of the deal that is bringing Apple to Nevada.

(The board signed off on the tax breaks following a two-hour discussion.)

The CSG report also noted the work by Sandoval and the 2011 Legislature that completely reorganized the state’s economic development efforts. The new Governor’s Office of Economic Development has taken over the tasks of job development and diversification.

Diversification and job creation are top priorities for Sandoval, who has set a goal of creating 50,000 new jobs in Nevada by the end of 2014.

The report also mentions Assembly Bill 202 from 2011, which provides for a partial abatement of some property taxes for eligible new manufacturing businesses, including those that renovate an existing building or other structure.

But Nevada has come in for some criticism for failing to evaluate the effectiveness of its tax incentives. A study by the Pew Center on the States released in April identified Nevada as one of 16 states that did not publish a document between 2007 and 2011 that performed such an evaluation.

Jennifer Burnett, CSG’s program manager for research services and special projects, said in a news release on today’s findings that there are definite trends in the kinds of economic incentives Western states are using.

“Although each state approaches development differently, every state relies on incentives in varying degrees as a component of their overall strategy,” she said. “For example, every Western state offers a tax exemption on raw materials used in manufacturing, while almost all states offer exemptions on goods in transit, manufacturers’ inventories and raw materials.”

Burnett also said state leaders are looking more closely at how incentives are used and more closely scrutinizing the payoff, which could mean big changes in the future of state economic development strategies.

“States have cut basic, essential programs – like education and infrastructure – to the bone and leaders don’t want to make even deeper cuts,” she said. “That means everything is on the table for discussion, including incentives and whether they are getting the return on investment they should be.”

Hearing On Apple Tax Breaks Generates No Public Comment, Will Be Reviewed Wednesday By State Economic Board

By Sean Whaley | 3:26 pm July 30th, 2012

CARSON CITY – There were no takers today for the chance to weigh in on $89 million in tax breaks being offered to Apple in exchange for the company building a data center and related facilities in the Reno area that are expected to bring $1 billion in investment over the next decade.

The hearing on the proposed sales and personal property tax abatements, made as part of a deal to bring Apple to Northern Nevada, did not generate a single comment.

Today’s hearing, conducted by Steve Hill, director of the Governor’s Office of Economic Development, was continued to Wednesday when the Economic Development Board, including Gov. Brian Sandoval, will consider the tax breaks in a special meeting.

Steve Hill, executive director of the Governor’s Office on Economic Development. / Nevada News Bureau file photo.

But Hill said the ultimate decision to grant the incentives to Apple will be his to make under the provisions of the law creating the new agency approved by the 2011 Legislature.

Some questions have been raised about whether the tax breaks offered to bring Apple to Nevada will be a good investment over the long term.

But Hill said he has not heard any comments from people who are highly upset about the proposal.

“I think it’s reasonable to question, OK, is that a good deal and why is that a good deal and should we continue to make those kind of deals as we go forward,” he said. “We have not heard a lot of, ‘you should not have done this.’ ”

“In my opinion this is a terrific deal for Northern Nevada,” Hill said. “In order for us to be competitive, our tax structure, or the abatements that we give out, are going to have to make us competitive as a place.”

Sandoval has already gone on record as supporting the tax incentives. In an interview on Nevada NewsMakers last month, he said: “There are 49 other states who would have loved to have what we have. And there were negotiations that went on back-and-forth. I had an opportunity to meet with some of the Apple officials early on and I think it was a great outcome for Nevada.

“I think it’s going to be a very strong magnet for us,” he said. “It shows that we’re in the game. It’s very competitive for these data centers across the United States. And Apple is going to look to see where we can go.”

Hill said after the hearing today that other firms have contacted his office inquiring what the state has to offer following the announcement of the Apple deal. There is no guarantee that the same level or type of abatements will be offered to other companies that may want to relocate here, he said.

The Washoe County Commission, the Washoe County School Board and the Reno City Council have all already given their approval to deal.

The sales tax abatement will mean Apple will pay only half a percent of the levy on what they buy during as part of the agreement, Hill said. The personal property tax abatement is worth 85 percent, but does not include construction-related activity. The first $100 million in construction by Apple includes no abatements, Hill said.

The abatements are contingent upon Apple making a minimum investment in its facilities in the Reno area during the life of the agreement.

The company will end up paying a minimum of $20 million in a variety of taxes over 10 years as a result of the abatements.

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Audio clips:

Steve Hill, director of the Governor’s Office of Economic Development, says people are right to ask questions about the Apple agreement:

073012Hill1 :28 have done this.’ “

Hill says he believes the deal is terrific for Northern Nevada:

073012Hill2 :19 as a place.”