I sort of had a meeting with the governor of Nevada this morning. I’m posting some notes about it mostly for others at Pololu, but maybe it will be interesting to other small businesses in Las Vegas. I probably should have been more prepared for the meeting; I still don’t know much about who was there or what exactly happened or what the stakes were, so a lot of my descriptions are kind of vague.
The background is that we are spending over a million dollars on new equipment (see some of it here; there’s more coming), and like most states, Nevada has some incentives for existing businesses to expand and for enticing out-of-state businesses to move. Nevada already has relatively low taxes, but one thing that hits us kind of hard is sales tax, which we have to pay on our equipment. One of the incentive programs is abatement of that sales tax from 8.1% to 2%, and that is the bulk of what we applied for. We applied through a separate organization that helps businesses apply for these programs. Our contact there said we should have no problem qualifying since we easily met the criteria, which included things like how much money we were spending and how many employees we were expecting to hire.
As part of the process, there is supposed to be a public meeting. The process is changing quite a bit right now: until recently, the idea was that someone from the company would do a presentation, but that is apparently getting phased out since every board member who votes on the abatement has the application packet with way more detail. The meeting was characterized to me as largely a formality since technically, there has to be some public hearing in which the public has an opportunity to comment or object. I asked our contact if anyone from the public ever actually showed up at these meetings and if I should expect any potential objections; he said he had never seen anything adversarial.
Candice, our VP of operations, had already been to a meeting two days ago in which the director of the Governor’s Office of Economic Development, which I think is the government division running this incentive program, got to ask any questions before formally recommending our application to the full board. Her meeting was maybe 20 minutes with only a few people, and she was asked, “How has Vegas been for you”, to which she had a basically content-less, 10-second response. So, I went in expecting approximately the same thing.
The meeting was at the Grant Sawyer Building in Las Vegas. On the top floor, there’s a governor’s office with a meeting room that gets teleconferenced to a larger meeting room in Carson City. I sat in a chair along the back edge of the room, which was just off the right side of this picture:
The camera in Carson City had a fairly wide-angle shot, so even though I wasn’t very far from the monitor, I could not tell if Governor Brian Sandoval was actually there or not.
The meeting had more people than I expected, with maybe twenty people in Vegas and a similar count in the remote room. It seemed like it was mostly people who knew each other, and they proceeded to have almost two hours of discussion about economic development in Nevada, details of some laws, how to have these meetings, and other boring stuff like that. At least it gave me a few clues about who some of the participants might be. Apparently, Nevada is very low or last among the states for these special incentives, but that is at least partly because the taxes are low to begin with. The last meeting this group had was apparently October 18th, so two hours to go over stuff didn’t seem that bad.
We finally got to the portion of the meeting where the company applications were considered. Pololu’s was the only one in Vegas, and there were two in Carson City. We went first. My contact gave a brief spiel about our company and application. I don’t remember exactly how this part went, but I think Governor Sandoval expected a presentation from me, at which point my contact said his understanding was that the protocol was changing and that companies were no longer doing presentations. But they still wanted to hear something from me, so they called me up to make some comments.
I think I started by unsmoothly saying, “hi”, and maybe waving into the camera before someone said I should say my name. Someone asked if I had something to say, so I commented on the earlier discussion about the incentive program: “I think it’s good for Nevada not to have a strong incentive program and to instead just have a good climate for all businesses. That way, I can focus on my business and not on knowing about the right government programs.” I think I said something along the lines of appreciating Nevada government not being too abusive. I’m not sure if I literally said “abusive government”, but someone in the room repeated it in a maybe amused, maybe questioning way, and I think the governor said something along the lines of taking it as a compliment.
One of the board members who was in the room with me started asking if we needed this incentive, basically questioning whether the $100k or so we were applying for would make any real difference. I said something to the effect that sure, not getting approved would not break us, but that for us it was still a significant amount of money that we could put into growing the business.
Then they voted on it, which I somehow was not expecting to happen on the spot like that. Two of the four board members in Vegas voted no, but we got approved 6-2. The portion of the meeting involving Pololu’s application took maybe 5 minutes.
Next up were the two companies in Carson City. These turned out to be from billion-dollar companies, video game maker Take-Two Interactive and another public company, Lincoln Electric (or maybe some smaller company that was being acquired by them). They had presentations ready. The governor thanked them for their comprehensive presentations. Their applications got approved 8-0.
The meeting ended soon after that, and I asked my contact if the two votes against us were typical. He said they were the first no votes he’d seen in seven years. I was wondering why, so I went against the contact’s advice and asked one of the board members why he voted no. We had a very nice conversation, and he was quite direct and frank with me, but I do not want to post exactly what he said or attribute things too specifically to him since my recollections are based on a mix of statements from many people.
At least it wasn’t because of what I said or how I was dressed. (Phone conversation last week in preparation for the meeting: “What should I wear?” “Just normal clothes: suit and tie.” “Oh, I don’t own a suit or tie. Should I get one for the meeting?” “No, just wear something nice.”) Basically, this whole program seems to be in flux. The first part of the meeting was about things like objective measures vs. discretion the committee had, whether businesses who were already in Nevada should be considered differently than those considering moving to Nevada, whether number of expected jobs created mattered more than health care benefits provided, and so on. My impression is that my participation in the meeting was still largely a formality and that the dissenting votes might have been some combination of protest against rubber stamping the applications and belief that Pololu would grow just fine without lowering our tax burden.
I hope we would have been just fine without the abatement, but it is a relief to have received it!
2 Comments New Comment
17 Dec 2012
“I think it’s good for Nevada not to have a strong incentive program and to instead just have a good climate for all businesses. That way, I can focus on my business and not on knowing about the right government programs.”
Brilliant. Just, brilliant.
18 Dec 2012
In the future, if you ever need a speech or content written on this or similar subjects pertaining business or growth for your current or possible future ventures in Nevada, do let me know. It's something I have gone through [with others in our previous franchise] in Los Angeles County, CA. for one of my fathers previous businesses (Food/Beverage). I applaud you for doing this on your own, we had 7 people behind us.
Anyhow, congrats to you and obtaining what you set out for. I always look forward to seeing what new comes from you guys, big fan. I enjoy hearing one day "Made in America" more often and not "Assembled" like Apple is getting away with (who's also in Reno area). Not racist, just nice to know those in my own community are working with valuable people leading them and will continue to as long as those simple words still have meaning behind them.