NDA, LV chamber get political at Legislature

Tuesday, Feb. 2, 1999 | 10:44 a.m.

The Nevada Development Authority is jumping into the lawmaking process for the first time and plans to make a pitch for economic diversification to the Nevada Legislature.

Somer Hollingsworth, president of the NDA, said the organization, which is dedicated to recruiting nongaming industries to the state, will get political by supporting economic incentive policies that won't require huge cash outlays.

That should sit well with the Las Vegas Chamber of Commerce, which has no legislative agenda per se, but will be looking over the shoulders of lawmakers this session to keep government intervention in business to a minimum.

Kara Kelley, senior vice president of the Chamber and a veteran of previous legislative sessions, said her organization will keep a close watch on education programs, growth issues and health-care reform in Carson City.

The two organizations take different strategies to the 120-day 1999-2000 biennial legislative session that started Monday.

Hollingsworth's group is struggling to keep up with stiff competition from other states, but knows a major budget increase in economic development won't happen.

"The annual economic development budget for Phoenix -- just one city -- is one and a half times the (economic development) budget for the whole state of Nevada," Hollingsworth said. "Some of our competitors have giveaway programs and it's hard to compete in the recruitment of businesses when the places we compete with give land, tax incentives and even cash away."

Hollingsworth said his strategy has been to carefully study the competition to see where Nevada can meet or match what others have to offer. Then, he said he'd work to fine-tune existing legislation or, if necessary, get new legislation that clarifies or expands on existing programs without driving up the cost.

In some cases, it's a matter of streamlining a process or developing a better explanation of how a program works so that it can be communicated to a prospective business.

"We recently lost three really large companies because the city they ended up going to gave away free land," Hollingsworth said. "They gave away the land, infrastructure, everything," the NDA leader said of Lancaster, Calif.

"We don't want to stand on the street corner giving out $100 bills."

And in some cases, handing out money is almost a literal phrase.

Hollingsworth said some Texas economic development groups arrange for companies to be paid $3,000 to $5,000 per worker employed, with the amount based on the hourly rate of the promised employee.

"Now that's hardball," Hollingsworth said. "But at least we know what we're up against."

Hollingsworth said Salt Lake City has established strong sources of venture capital to help companies set up in its growing high-technology centers. Establishing so-called venture capital incubators has been discussed in Nevada, but a ballot proposition that would have helped facilitate that failed.

Nevada touts its low taxes to prospective businesses, and does offer incentives in the form of tax breaks and worker-training assistance.

Hollingsworth said some states, including Arizona, have gone further by offering up to three years of operation without having to pay any corporate taxes.

"The fact that we have no corporate tax, that's a huge draw for us," Hollingsworth said. "No personal income tax, very few states have that, it's an advantage. But we need it because we're now competing with every state in the union for businesses."

How does Hollingsworth advocate beefing up economic development? He wants to see more of the existing money available go toward marketing to target categories of businesses already under consideration by the NDA and the state -- research and development firms and companies involved in the motion picture and film industry.

Hollingsworth also said he'd like to see the state enter discussions with the Bureau of Land Management and Las Vegas Valley municipalities to see if there are ways to offer BLM land at a low cost to quality companies the state is trying to attract.

He also suggests reprioritizing funding to the Commission on Economic Development's Train Employees Now program. Businesses that look to relocate to Nevada are seeking an educated work force and Hollingsworth said the T.E.N. program fits the bill.

Educational programs also are high on the Las Vegas Chamber's priority list.

Kelley said a $4 million appropriation to help fund on-the-job business education was cut in half in the last session. She said a school-to-careers program that offered special learning opportunities for teachers, job shadowing for students and internships have been supported privately by chamber businesses.

Kelley said she will keep close watch on growth issues that arise. Generally, the group has opposed efforts to add new levels of bureaucracy to deal with planning issues, opting instead to support existing municipalities to confront growth matters.

The Chamber also intends to fight attempts to add mandates on benefits packages. Specifically, requirements for businesses to implement health care programs will be watchdogged.

"Managed health care is being regulated to death," Kelley said.

A related mandate program the Chamber will oppose is a proposal to require companies with more than 300 workers to give paid leave time to employees with children for school activities. The Chamber view is that it's something companies can offer as a benefit, but it shouldn't be mandated.

Kelley said the Chamber also will oppose efforts to delay the implementation of a competitive market for utilities. The Public Utilities Commission of Nevada had planned to implement utility restructuring by the end of the year, but now is seeking a delay.

"We're very excited about competition beginning and we'd oppose a delay," Kelley said.

Chamber members could potentially benefit from a competitive marketplace by acquiring power at a reduced rate as an aggregate.

On economic development issues, the Chamber favors simplifying the process of relocation with "one-stop shopping" for companies seeking to move to Las Vegas.

Both the NDA and the Chamber are taking neutral stances on gaming tax issues. Hollingsworth said the NDA doesn't involve itself much in gaming matters because of its diversification mission and Kelley said that while the Chamber expects to be a part of any tax debate, it isn't looking specifically at the gaming industry as a source.