On Losing Tesla: Blame the Unions

September 19th, 2014 · 2 Comments · budget policy, economy, journalism, labor, tax policy

By Denise Tessier

In the days since Tesla announced its decision to locate its $2 billion “mega” battery factory in Nevada, a number of stories have pondered New Mexico’s “loss.”

In the ABQ Free Press, reporter Peter St. Cyr talked to politicians, business leaders and “free market advocates” and came up with a list of things that need to be corrected if New Mexico is to attract a Tesla-like enterprise in the future: “underperforming higher and elementary education systems, restrictive government regulations, high taxes, limited infrastructure and transportation shortfalls” (“What Did N.M. Learn from Tesla?”, Sept. 10; no link online).

In “Looking past the Tesla blame game” (Sept. 7), Albuquerque Journal UpFront columnist Winthrop Quigley focused beyond political blame (Gov. Susana Martinez’s weak leadership or anti-business Democrats in the Legislature, “depending on whom you believe”) to point out it was God who “put us more than 800 miles away from the nearest deep-water port (and) put the nation’s lithium in Nevada.”

And he added that one must also consider that:

Companies we can’t attract often tell us their employees won’t put their kids into our schools. Our political leaders show little interest in finding common ground to solve the problem. Our regulatory environment is difficult, quixotic, inconsistent, unpredictable and expensive.

Our political leaders don’t seem even to recognize the problem. Our infrastructure is degraded. Our water policies are grounded in the 19th century.

Much of our business thinking reflects a circa 1972 understanding of the global economy. We offer some incentives without knowing what they cost the taxpayer or whether they produce any results.

His column dovetailed a news story two days previous by Journal reporter James Monteleone, which quoted Republicans and Democrats blaming each other for the loss of the battery factory.

It was clear from the Associated Press comparison of pertinent attributes of New Mexico and Nevada, which ran in the Journal Sept. 3 and 4, that Nevada had the advantage in terms of “proximity to the assembly plants in Fremont, Calif., where Tesla makes its cars” and it had “significant deposit of lithium, which is essential to making the batteries.”

And on top of that, Nevada offered:

No personal income tax, franchise tax, estate tax, inheritance or gift tax, and no taxes on corporate shares. No corporate income tax (at the moment). . .

Up to a 50 percent abatement on personal property taxes for up to 10 years; a partial abatement on sales and use taxes on capital equipment purchases; and a deferral of sales and use taxes on capital equipment.

Up to $1,000 per employee for job training if the company provides a 25 percent match, makes a five-year business commitment and pays at least hourly minimum wages.

The Albuquerque Journal’s editorial board looked at all these factors, and in a Sept. 7 editorial musing on “the makeover” New Mexico needs before the next mega-company comes a-calling, decided to also blame three things not mentioned in the aforementioned articles, saying, verbatim:

Unlike Nevada, New Mexico is not a right-to-work state.

There has been an organized outcry against re-implementation of modest federal work requirements for food stamps.

A push to increase the minimum wage won’t create wealth and promises to have a domino effect on labor costs.

Leave it to the editorial page to soil an otherwise salient editorial by blaming unions, deriding the public’s sentiment in support of minimum wage increases and scolding New Mexico for an alleged leniency with regard to food stamps, even when none of those examples were necessary to the editorial’s point.

It was an opportunity to pile on with some of the things the Journal is against, and the Journal took it.

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2 Comments so far ↓

  • Susan Clair

    Thank you for another informative article. Sadly, it’s predictable that the Journal, politicians, and other less-than-imaginative minds would simply blame others or blame God rather than pursue creative solutions to NM’s pressing economic and education issues. Last time I looked at a map, Nevada also did not have a deep-water port. If NM had a healthier economy, reasonable taxation and political systems, and a more progressive education environment, the source location of lithium might not have been the major issue it is made out to be.

  • Larry Rucket

    We are the 26th for quality of life. Nevada is 47th.

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