Nevada Newsmakers

News - April 10, 2024 - by Ray Hagar

- Click for Full Interview

In the 2023 Legislature, small Storey County, 30 miles east of the Reno-Sparks area, won a major battle with some lawmakers in neighboring county and city governments.

A coalition of some Northern Nevada lawmakers, first supported by Gov. Joe Lombardo, proposed to siphon off about 80 percent of the $50 million in annual taxes from the Tesla Gigafactory at the Tahoe-Reno Industrial Center that were due to Storey County when Tesla's 10-year state tax abatements expired at the end of 2024.

In the end, Lombardo came to side with Storey County and the crisis was averted.

Now, however, Storey County officials are concerned similar legislation will surface during the 2025 Nevada Legislature, Kris Thompson, the project manager for the Tahoe-Reno Industrial Center, said on Nevada Newsmakers Tuesday.

The new threat, however, would draw off county tax revenues when state-approved tax abatements end for the many companies that flocked to the TRI after Tesla was established.

"We're hearing that this plan would take perhaps up to 80 percent of all future tax revenues to the county from companies that receive state-level abatements," Thompson said.

Thompson did not give any estimation on the amount of revenue Storey County could expect when newer tax abatements expire for businesses located in the TRI.

Nor was he clear about what entity, specifically, wants to siphon off Storey County's future tax money.

Also, no bill-draft request about the redistribution of future tax money generated in Storey County or other rural counties could be found on the Nevada Legislature's web site for the 2025 session.

Yet that does not mean the battle is not real, Thompson said.

"You always hear rumors about what's coming in the next legislative session, but we've heard that there is a move afoot, again by a small faction, apparently in Northern Nevada, to go in and try to take the tax revenue coming into Storey County and divert that to the state," Thompson said.

"Obviously that's a major issue and it is punishing success, if you would," he added.

Thompson implored Lombardo to again to ride to the rescue.

"Gov. Lombardo, thank you for coming to our rescue last time (in 2023)," Thompson said. "And thank you for listening to the rural counties and protecting us from from this money grab that's unfair and unjustified by the economic numbers.

"And so we just want to thank you for last time," Thompson said. "And, Governor, please keep your ears and your eyes on this issue."

This new tax threat for Storey County could also hinder economic development throughout rural Nevada, Thompson said.

"(It would impact) all future abatements in Storey County and every other county, Lyon County, Carson, Minden, Gardnerville," Thompson said. "You know, all the surrounding rural counties that are all trying now to jump in on this -- on this tech-economic development -- those counties would also be subject to 80 percent of the county tax revenue going to the state."

Officials in neighboring Washoe County, however, have often decried the strain that Storey County's roaring economic engine has placed on their housing costs, schools, roads, hospitals and other quality-of-life issues.

Storey County provides few of those services.

Some Washoe officials, like Sparks Mayor Ed Lawson, has also asked Lombardo for help -- but from a different perspective.

"We could have 50,000 jobs (in the near future) in Storey County and we take the bulk of that pressure because they are going to come live with us," Lawson said in a previous Nevada Newsmakers interview.

"In Reno and Sparks, we have the all of the services, the hospitals, the doctors, the specialist you need," Lawson said. "Mainly with infrastructure, we put all the burden on Reno and Sparks, not just infrastructure like roads and sewers but also mental-health services and some of the social services that we do. That infrastructure needs to be there."

Thompson agreed Storey County has not built much housing to help absorb the TRI workers' needs.

Yet he countered that the Reno-Sparks area's major landfill is in Storey County and the power plant that keeps the lights on in Washoe County was also built in Storey County.

Storey County officials, in previous Nevada Newsmakers interviews, have also said Storey County saves Washoe County residents millions of dollars annually by taking the county's "grey water " -- untreated water from sinks, showers and washing machines -- for industrial purposes at TRI.

A $30 million "grey water" pipeline, financed by Storey County, has "saved Washoe County ratepayers $150 million and (the expense of) having to build a new (sewer) plant that would meet effluent discharge requirements into the (Truckee) river," Storey County Manager Austin Osborne said in a Nevada Newsmakers interview.

"We have maybe 10,000, 15,000 acres (devoted to) taking the trash, generating the power and taking the dirty water, the effluent coming out of their sewer-treatment plant," Thompson said. "So in terms of being a good neighbor, Storey County has been a great neighbor over the last 20 years. "

If new legislation is passed, much of the new tax revenue generated at TRI would go to various government entities, Thompson said.

"We've heard that this money would go partly to the state, but then partly to the municipalities or the counties surrounding where the abated company is located, which is also just contrary to the economic realities.

"For instance, over the past 10 years since Tesla's been in TRI, Storey County has had a payroll of somewhere around three-quarters of $1 billion," Thompson said.

"Right now, with all the new tech companies, you're probably talking about a $1 billion-a-year in payroll. Well, Storey County does not see that payroll at all. That entire $1 billion-a-year goes into Reno and Sparks."

Many businesses in Washoe County also profit from the business they do with TRI residents such as Google, Tesla, Panasonic, Wal-Mart and various other major corporations.

"Then you have all the contracts with the engineers in Reno, the accountants in Reno, the lawyers in Reno, the parts and materials suppliers in Reno, the engineers in Reno ...," he said.

"The amount of income coming from Tesla and Panasonic and the other companies in TRI flowing into the surrounding county and municipalities like Reno, Sparks is massive.

"And so to say that somehow they have been shorted economically is contrary to the economic numbers," Thompson continued.

Jobs generated at TRI were a major reason why Washoe County was able to pull itself out of a recession in the previous decade, Thompson said, adding the promise of jobs still holds true for the region today.

"If you want a job and you live in Washoe County, you could walk out to TRI and be hired today with a Wall Street company," he said.

- Click for Full Interview