Wednesday, Sept. 10, 2014 | 9:54 a.m.
Greg LeRoy, executive director of the watchdog group Good Jobs First, issued a statement today on Nevada's study on the economic impact of the Tesla deal. LeRoy's statement is in response to the studies by the Nevada Governor's Office of Economic Development and the state demographer:
We will defer to economists with expertise in input-output models for more detailed analysis of the two documents, but two things stand out.
I find it odd to see that the study includes a run with national multipliers, given that Nevada is such a small part of the U.S. manufacturing economy. This of course, generates much higher jobs numbers, including the 22,000 figure [page 8] that Gov. Sandoval has emphasized. Is it reasonable to assume that the Nevada economy will "adjust" to the presence of the plant and substitute out inputs coming from 49 other states [as suggested on page 15].
And what about inputs from Tesla's partner Panasonic in Japan? The impact of BMW in South Carolina is cited, but BMW has been assembling cars in Spartanburg for 20 years, yet it still imports its engines from Germany, as does Mercedes-Benz to its assembly plant in Alabama.
The study confirms our argument that growth induced by Tesla will drive a burden shift. As summarized on pages 19-20, In the absence of revenue from Tesla, working families' sales and property tax revenues will have to pick up the slack.
At the end of the day, ripple-effect calculations are often a smokescreen, a distraction from the real issue of cause and effect. Is Nevada paying Tesla to do what it would have done anyway? Didn't business basics really drive Tesla's decision, such as proximity to lithium mines, proximity to Tesla's assembly facility in California, speed of permitting and direct freight rail and interstate highway access from Reno to Fremont?
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