Nevada Lawmakers Consider Tax Breaks For Aviation Industry

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Tax Abatements
AP, Cathleen AllisonSteve Hill, director of the Governor's Office of Economic Development, testifies in a committee hearing at the Legislative Building in Carson City, Nev., Thursday, Feb. 19, 2015. Lawmakers are considering a number of bills on tax abatements which experts say would help create good-paying jobs in the state.

By Riley Snyder and Michelle Rindels

CARSON CITY, Nev. (AP) - Expanding tax breaks to aviation businesses would quickly create hundreds of good-paying jobs in Nevada, according to an economist who testified Thursday at a hearing for a pair of tax abatement bills that have support in both parties.

Senate and Assembly members held a joint committee hearing on SB93 and AB161, which would expand tax abatements to the aviation industry and bring Nevada in competition with 45 other states that offer abatements or exemptions.Steve Hill, of the Governor's Office of Economic Development, and representatives from the industry testified that aviation companies avoided doing repairs, expanding their business or headquartering their planes in Nevada because adjacent states offer better incentives.

There are already more than 4,600 people working in aviation-related jobs in Nevada, and they make an average annual wage of $53,000 - more than 25 percent higher than the statewide average. Abating sales and use taxes could create anywhere from 414 to 1,348 direct and indirect jobs in the first year, according to a report by economist Mike Tretheway that was commissioned by the Reno-Tahoe Airport Authority.

In five years, the number of new jobs is projected to be 1,447 to 3,057, according to the study.

"You already have businesses here in Nevada, and they've made the investments," Tretheway said. "Jobs will materialize almost immediately."

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Senate Majority Leader Michael Roberson said legislation giving tax breaks to aerospace companies passed unanimously in the Senate in 2013 but didn't receive a hearing in the Assembly because time ran out in the legislative session. The bill has support from the governor and is almost guaranteed to pass this time around, according to Lt. Gov. Mark Hutchison.

Democratic Assemblywoman Irene Bustamante-Adams is sponsoring a nearly identical bill in the Assembly and said the proposal was a major concern for southern Nevada businesses.

The Las Vegas Democrat said her bill offered a 10-year abatement period, while the other bill offered 20, but she didn't see that as a particularly controversial issue.

Democrats expressed some skepticism about the abatements overall. Sen. Pat Spearman said she was eager to attract new businesses but wanted to make sure the state balanced that task with serving the average citizen and wasn't giving too much away.

She also asked whether businesses who took advantage of the breaks would commit to Nevada for the long run.

"I don't want to date. I want to get married," she said.

The measure is one of several this session that would offer abatements to businesses in select industries. A bill giving tax breaks to data centers and related companies was heard in a Senate committee Tuesday.

The proposal, which is sponsored by Republican and Democratic leadership, would abate certain property and sales taxes for companies and data centers that meet a list of requirements, including hiring for a certain number of jobs and investing more than $100 million in the state.

The Senate Committee on Economic Revenue and Development was also scheduled to hear SB74, which would require companies seeking tax abatements to pay wages at the state or county average.
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