Crony Corporatism alive and well in Storey County

The Governors Office of Economic Development’s (GOED) board meets in mid-November and the agenda contains an item that will consider GOED’s effort to build an effluent pipeline from Sparks to the Tahoe-Reno Industrial Center (TRIC). Once built and fully deployed, this pipeline will carry 3.7 million gallons a day of effluent to thirsty server farms installed at Switch and those expected at Google.
The pipeline will be financed by a bond floated with the help GOED and SB1, a bill originally intended to help now defunct Faraday Futures and the APEX business park in Southern Nevada. The proposed pipeline will encumber both State of Nevada and Storey County Taxpayers with a $35 Million bond. The bond touted as an innovative public-private partnership, will augment TRIC’s General Improvement District’s (TRIC-GID) $30 Million loans for improvement to their existing water treatment facility to process the new inflow.

Promoters and Spin Doctors At Work

According to the polished sales pitch crafted by TRIC executive Lance Gilman, GOED assistant director Cory Hunt and stat spinner Jeremy Aguero from Applied Analytics, the bond is expected to be paid for by “future tax revenue from a special tax district taxing new businesses coming into TRIC over the next years.” Yet despite the flowery projections of flush tax revenues, our sources tell us abated taxes from the entire park will have a hard time paying for this bond.
As small government-free market folks, we view the world through the lenses of what’s best for the taxpayers and the community. When we look at this “deal” through those lenses, all we see is cronyism at its best. This pipeline represents another in a tall stack of corporate welfare checks cut by Storey County and Nevada to the wealthy band of merry TRICsters in the desert east of Reno. These TRICsters have used political power, influence and fear to shift the financial burden of legitimate developer expenses from where they belong onto the shoulders of the Storey County Taxpayer. Thanks to GOED, this latest “deal” will now include all Nevada taxpayers onto the list of chumps paying to enrich the pockets of Roger Norman and Lance Gilman
In the rest of the known universe, when a developer proposes a development, one of the first things to happen is an impact assessment. The county or city looks at the proposal and determines what type of infrastructure will be required for this development to be successful. Then the County asks the developer to come up with the money to pay for this infrastructure.
However, as history has shown us time and time again, Storey County doesn’t pay much attention to realities that govern the rest of the known universe. 

Before we continue with the pipeline bond discussion, some historical context of TRIC-Storey County is in order…

Since 1859 and the discovery of blue mud, Virginia City has proven to be a place unique to planet earth. In the recent past, Joe and Sally Conforte brought infamy to Storey County when they opened the Mustang Ranch, the first legal brothel in the United States.
In the days leading up to the dot-com bust of 2000, Storey County was on the rocks; it was broke. Joe Conforte was on the lam and The Mustang Ranch was closed; Storey County’s only real revenue stream had run dry. Talks were underway to dissolve the county and scrape it onto Carson City and Washoe Counties. 
From out of the desert emerged developers Roger Norman and Lance Gilman. Together they took a pile of cash and started buying land. Lots of it.
They bought the McCarren Ranch and other holdings from Gulf Petroleum just east of Reno. By the time the dust settled, they amassed over 100,000 acres of prime Nevada desert dirt. They had a vision to build the world’s largest industrial park. But to do it they would need help. And that help would come from Storey County. 
Lance Gilman bought Conforte’s Mustang Ranch on eBay and got Storey County’s revenue stream flowing again. Building began at TRIC. Talks to split the county quieted. 
Things were looking up in Virginia City. And the Norman-Gilman influence was growing. Roger and Lance were seen as saviours of Storey County staving off the imminent dissolution. Parades revelled down C Street.
As TRIC began to grow, Roger Norman forged a remarkable deal with Storey County. Due to the growth at TRIC, Storey County would be expected to provide new Fire, Police and Public Works services the County could not pay for. With a benevolent pen, Norman and Gilman would write checks for the needed services and infrastructure and put that debt on a no interest credit card that would only be paid back when the tax revenue started flowing out of TRI. 
Fearing a future that had them losing their jobs by becoming a distant part of Washoe County, Storey County Commissioners signed onto this plan and TRIC began to burden County taxpayers with huge developer infrastructure bills in addition to legitimate county infrastructure expenses. 
In the rest of the universe, the County paves a road and digs pipe to the developer's property line and the developer takes it from there. In Storey County, however, the Commissioners began to make sweetheart deals with County land in order to help out their cronies at TRI. Gilman helped push a selling feature to incoming companies known as fast-tracking; pesky formalities are dispensed with in favor of rapid approvals and inspections.
In a complex land swap shell game that ultimately resulted in the freshly minted USA Parkway. TRIC improved a portion of USA Parkway and gave the County the land and a bill for $25 Million. This should have been a State NDOT expense but at the time the state didn't have the cash so TRI did it then saddled the County taxpayers with the debt.

Gilman at TRIC

Lance Gilman. Brothel Owner, TRIC Executive and Storey County Commissioner


In 2012 Storey County voters elected Lance Gilman was as Storey County Commissioner. As Commissioner he solidified his power and control over County governance. Wearing hats on both sides of the negotiating table, Gilman began to lure more businesses into TRIC while delivering on promised concessions at the county level. Things started picking up. 
Soon Gilman worked with GOED and Governor Sandoval to orchestrate the Tesla deal. Elon Musk, another guy who wouldn’t be in business without taxpayer wallets, worked his magic in Nevada and is building the worlds largest factory on the backs of Nevada and Storey County taxpayers thanks to stunning tax abatements. Abatements that Tesla can and has sold to other companies.
When TESLA and other big-name companies began to move into TRI, the state realized that having USA Parkway completed to HWY 50 should be a thing. Lance Gilman brokered a deal to sell NDOT the land and right of way so the NDOT could complete its construction. In order to do this he needed the county-owned portion of USA Parkway which, using his position as a freshly minted Commissioner, he got the County Commission to give him back for free.   
TRIC then turned around and sold USA Parkway, in its entirety, including the portion it got for free from Storey County to NDOT for $43 Million. Rather than reducing the original debt for building the segment of USA Parkway by $25 Million, Norman and Gilman’s pockets filled with cash and Storey County Taxpayers were left with a pocket full of dirt. And a mountain of debt.
In Storey County, TRIC developer expenses now amount to at least $45 Million (some estimates put the figure at near $60 Million). And while almost all of the record sales taxes Storey County collects from TRIC are abated, repayment on the TRI debt (is) happening. Thanks to the abated taxes, Storey County cannot pay the TRIC credit card without cutting budgets and services to the citizens, none of whom live in or own a piece of TRIC.

Behind the Scene Water Dealings

This brings us back to the GOED board considering the pipeline bond being on November 18th. This bond is the result of months and months of behind the scene wrangling with TRIC, Switch and Tesla legal staff and a myriad of players in the Truckee River water game. The City of Reno and Sparks, TMWA, TMWRF, TROA, Pyramid Lake Indians, NDOT, Washoe and Storey County and many others have all had arms twisted to accommodate TRIC and their high rolling clients.
The pipeline will provide new and existing businesses at TRIC with plentiful water they need to cool server farms and lubricate industrial processes. Google, Tesla, Switch and Panasonic could collectively float a private bond and pay for their water themselves with the money they drop on the way to the bank. 
But because of the failings of Faraday Futures and precedents set by desperate Storey County officials, the burden of this pipeline will shift from where it belongs at TRIC onto the shoulders of Nevada Taxpayers.
This “private-public pipeline partnership” benefits the private partners at the expense of the public. In the free market universe, the one of voluntary exchange of goods and services that mutually benefit all parties, these pipeline bonds would fail. 
In the alternate universe that is Storey County, the cronies win and the taxpayers lose. Every. Time.
Soon all Nevadans will be asked to pony up and join Storey County taxpayers the losers table.
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Lack of transparency at Tax Department hinders commerce tax repeal debate

By Daniel Honchariw 

When companies get too big to operate efficiently or competently, they go out of business — but in government, such failure actually protects the ever-growing bureaucracy.

The Nevada Tax Department’s accounting policy — or lack thereof — with regard to the commerce tax is a perfect example.

The commerce tax, for a wide range of reasons, is not popular. A similar tax was previously rejected by nearly 80 percent of voters in 2014, and there’s now an effort by former state Sen. Bob Beers and State Controller Ron Knecht to have voters reject this version as well on the 2018 ballot.

Unfortunately for citizens aspiring to understand the actual merits of the repeal debate — including the impact the tax has had on certain industries — bureaucracy is getting in the way.

The issue arises from the Tax Department’s lack of transparency regarding how it accounts for commerce tax revenues.

Sure, the department will readily provide documents detailing gross annual revenues — we know, for example, that the commerce tax collected about $143 million in fiscal year 2016.

Interestingly though, and without explanation, the department doesn’t account for revenues on a by-industry basis — which seems particularly odd, given that the tax was specifically designed to collect revenues from multiple industries at different rates.

The revelation came when the Nevada Policy Research Institute requested this important industry-specific breakdown.

“We don’t currently have a report or any agency record that breaks out collections by industry, but we are looking at developing a report (as time and resources allow),” is the response the institute received after requesting, pursuant to Nevada’s public-records law, a full accounting of commerce tax revenues by industry for fiscal years 2016-17.

This lack of information is troubling because it obscures one of the most controversial aspects of the commerce tax: that it was enacted to favor — or can be tweaked to favor — certain industries over others.

Such is evident by the plain text of the law, which calls for 24 unique tax rates to be assessed, depending on “the business category in which the business entity is primarily engaged.”

The mining industry, for example, is taxed at a rate of 0.051 percent, while “educational services” are taxed at 0.281 percent — more than five times the rate for mining!

The basis for levying 24 unique rates is, ostensibly, that each industry has different “expected” margins of profit. Given the debate about repeal, the question right now is what effect has this had on those 24 different industries?

Under current policies at the Tax Department, we have no way of knowing — a baffling circumstance, given that the Department itself is tasked with levying these various rates on businesses.

As it is right now, the department’s policy hides the full impact of this unpopular tax. It’s an oversight that must be corrected immediately by publishing a by-industry accounting.

Failure to do so would indicate the department is unwilling to have an honest and comprehensive debate over repeal as the 2018 cycle nears.

Daniel Honchariw is a labor and fiscal policy analyst at the Nevada Policy Research Institute, a free-market think tank. This commentary was originally published by the Reno Gazette-Journal.

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Knecht's Weekly Smack Down - Trump’s Regulatory Reforms Help the Economy, But Not Enough

By Ron Knecht and James Smack – 3Oct.2017
Two recent news stories caught our attention, and they suggest some good news, but ...
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Las Vegas Tragedy Inspires Hope as the Community Comes Together

As we reflect on the tragedy in Las Vegas over the weekend, we at the Libertarian Party of Nevada (LPN) are warmed and heartened by what we witnessed in the aftermath of this horrific event. In the face of terror and tragedy Nevadans and Americans come together to help those in times of despair and need.

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Homelessness in Our Cities


By Ron Knecht and James Smack

Recently, James went to Portland, Oregon for a concert and to celebrate his 17th wedding anniversary with his lovely wife, Vicki.

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Who is Minding the Store?


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Lately, when we tune in or read national political news, it’s virtually the same stuff every day. If you’re watching a left-leaning outlet like CNN or MSNBC, or reading the New York Times, Washington Post, USA Today or HuffPost, it’s almost all about either Russia or some leak from the White House.

If you’re watching Fox, it’s almost always about how the deep state is undermining the Trump Administration or the corruption of the Obama Administration.

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Why the State of Emergency on Marijuana?


By Ron Knecht and James Smack

Sometimes Nevada can be, well, uniquely Nevada.

Perhaps this’s why, in this major fire season and after great amounts of snow and flooding from the melt, a state of emergency was declared. A state of emergency because recreational cannabis dispensaries are running out of weed!

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Warrick Dunn: An Athlete We Can All Look Up To


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Many of our readers have probably not heard of Warrick Dunn, former running back for Florida State University and the National Football League’s Tampa Bay Buccaneers and Atlanta Falcons.

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Happy New Year: The State’s Last-Minute Spending Frenzy


By Ron Knecht and James Smack

On June 30 Nevada ended its 2017 fiscal year, and we observed yet again one of the more annoying problems in state government: the annual last-minute spending frenzy.

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Geoff Lawrence Moves On and Up


This post was originally submitted on June 27. We apologize for the delay.

For now, this is the last regular column that will carry the Ron and Geoff byline. Geoff is leaving the Assistant Controller’s job July 1 for a new one.

James Smack, the Deputy Controller, will join Ron in the weekly column beginning next week. Geoff will make guest appearances now and then, we anticipate.

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