Letters to the editor for Thursday, Dec. 12, 2013
December 12, 2013
Tax abatements are a political strategy
The Dec. 8 Appeal reports that Steve Hill, director of the Governor's Office of Economic Development, claims that nearly $113 million in tax abatements he's granted will have a $7.8 billion impact on the Nevada economy. That's self-serving nonsense.
An International City Management Association report says, "… most researchers have found tax abatements marginally effective at best and pernicious at worst." How do we know that these companies wouldn't have relocated to or stayed in Nevada for other reasons? Mr. Hill says the tax abatements will lead to $2.8 billion in capital spending. The abatements amount to just 4 percent of that. Is he saying Nevada has nothing more to offer than a 4 percent discount?
And to claim that these abatements are responsible for all this complex economic activity completely ignores other factors. Sort of, make a gift to Apple and then claim Apple's success as your own.
The truth is that with many governments offering these incentives, businesses have long since learned how to work this system. Make a location decision on other factors, then go to someone like Mr. Hill and say you're thinking about other places, and ask if he can help. If your prospects are good, he'll give you money so that when you do well he and his boss look good too.
Tax abatement is an ineffective economic development strategy. It's really more of a political strategy. Nevada would do better if Mr. Hill's gifts were put to another use.
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Letter contained an error
I was in error when I wrote the letter about Quail Run using the Saliman Street exit to avoid Fairview Drive. That exit is for another gated community, but the roads between the two communities are blocked off by two gates. If the board of directors of these communities could work together and open these gates during rush hours, a dangerous traffic problem would be eliminated.
This problem cannot be resolved because the Quail Run board of directors will not open up the gates to allow traffic to use the Saliman exit or the gate to Tonka Lane. The gates could be opened for a trial and if it doesn't work, they could be closed. This problem will exist until Interstate 580 is complete in 2017.