Voters to get economic development measure a third time

Tuesday, Jan. 11, 2000 | 11:01 a.m.

CARSON CITY -- Twice before -- in 1992 and 1996 -- Nevada voters defeated a proposed constitutional amendment to allow the state to invest in private companies to promote economic development.

This November voters will be asked a third time to allow the Legislature to establish a program to invest state money in emerging companies to diversify the economy and create new jobs.

Roberta Lange, of the newly formed Nevadans for Economic Opportunity, told a legislative subcommittee Monday that her group will launch a drive to gain passage this year.

"The electorate did not understand the question on the ballot," the first two times, she said. "We hope to reach every voter and bring this issue to the forefront."

The second time the issue was on the ballot it gathered 14 percent more support than the first time, she said. But it still lost by a margin of 65-35 percent or 125,000 voters.

Her comments were made to the subcommittee to study methods to encourage corporations and other business entities or organize and conduct business in Nevada. It is looking at economic incentives that might be used to promote development of new industry in the state, which is now reliant on the casino business.

Ian Burns, a Las Vegas patent attorney and president of the Nevada Technology Council, said having venture capital available for some of these start-up companies, "would help bring business to Nevada. But it would not create a stampede."

"There are lots of good ideas in Nevada but there is little start-up capital," he said.

He said he has clients in California looking to locate in Nevada. He said he tells them about the low taxes and the good business climate. But these companies talk about the lack of skilled workers in Nevada and there is little venture capital available for start-up costs.

Nevada's Constitution prohibits the state donating or loaning money or giving its credit to any company, association or corporations except those formed for educational or charitable purposes.

The constitutional amendment before the voters this November would permit the Legislature to enact a law approved by two-thirds of its members for "the investment of state money in any company, association or corporation for the purpose of stimulating economic diversification or development of this state and for creation of new employment opportunities ..." There would be a number of conditions on the state before it could give or loan the money.

Opponents have branded this a form of "corporate welfare" but supporters say it's needed to expand the economy of a state that is tied to one industry.

Figures were presented to the subcommittee by Robert Heard, president of the National Association of State Venture Funds, that show 32 states allocate state funds for start-up companies.