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Nevada receives top ranking for its subsidy programs
by Joshua H. Silavent
Dec 23, 2011 | 739 views | 0 0 comments | 2 2 recommendations | email to a friend | print
Greg LeRoy
Greg LeRoy

CARSON CITY — Though many states spend millions of dollars annually on corporate tax credits, cash grants and other subsidies for businesses without requiring important job creation or wage and benefits standards for workers, Nevada does the best in applying stringent job creation standards to its economic development subsidy programs, according to a recently published study by Washington, D.C.-based nonprofit, nonpartisan research center Good Jobs First.

“With unemployment still so high, taxpayers have a right to expect that economic development investments create significant numbers of quality jobs,” said Greg LeRoy, executive director of Good Jobs First. “The days of ‘no strings attached’ are largely gone, but the fine print in many states is still full of gaps and loopholes.”

The study, “Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs,” rates the performance standards and job quality requirements of 238 key subsidy programs in all 50 states and the District of Columbia, which together cost more than $11 billion per year.

North Carolina and Vermont followed Nevada with the best scores while the District of Columbia, Alaska and Wyoming rated at the bottom.

The Silver State’s business-friendly tax climate, coupled with its job creation, retention and training requirements for companies who receive subsidies, pushed it to the top of the rankings.

“I certainly appreciate the ranking,” said Steve Hill, executive director of the Nevada Governor’s Office on Economic Development. “We think we have a lot to offer in Nevada.”

The state’s employment base, higher education centers and northern (Reno) and southern (Las Vegas) logistical and distribution hubs add to the appeal for businesses looking to relocate or expand in Nevada.

“We think we have strengths in many areas,” Hill said.

The report made the following policy recommendations for all state economic development subsidy programs:

• Every subsidy should contain job creation, job retention or training requirements. Those should be strengthened by provisions barring employers from shifting existing jobs from other facilities and mandating that the jobs be kept in place for a minimum time period.

• Every job or training position in a subsidized facility should be covered by a wage standard, preferably tied to labor market averages and structured in a way that raises pay above market levels. They should also offer health coverage in which the employer contributes to the cost of the premium. These rules should also apply to part-time, temporary and contract workers.

• Decent job standards do not guarantee that a program’s benefits will outweigh its costs.

Sometimes the only sensible course of action is to eliminate a program altogether.

Though Nevada outperforms all other states in these key subsidy program areas, Hill is ready to see what improvements can be made in 2012.

He said he is excited about the state’s prospects for job growth.

“Obviously, there is a sense of urgency,” Hill added.

But company by company, job by job, he expects to oversee a more focused and cohesive economic development strategy that can lead Nevada out of stagnation and into a true recovery.
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