$500 taxpayer investment in Tesla too rich, but perhaps there are alternatives?

By now most New Mexicans are aware that Tesla has broken ground on its “gigafactory” in Reno. To me, it seems likely that this is where the company intended to build its plant all along. After all, Nevada is a “right to work” state, a zero-income-tax state, and Reno is relatively close in proximity to Tesla’s main factory in Fremont, California.

But, some New Mexicans hold out hope that the company is “still evaluating” potential locations. Further comments from Tesla CEO Elon Musk indicated that $500 million might be enough to get the company to set up shop in a given state. For starters, it is clear from the Albuquerque Journal story that the company is looking for $500 million in tax dollars out of pocket. In other words, I’m sure some tax breaks and perhaps even some regulatory favors are expected, but Tesla is looking for $500 million upfront to assist the company with building its factory.

As I have written previously (point 1), taxing other New Mexicans and existing businesses to pay for a new business, no matter how exciting that business may be, is simply wrong and not good economics. Just like with the film industry, tax breaks are one thing, but outright payments are another.

If Tesla is really still in the market for another “gigafactory” location, I think the Martinez Administration should put Democrats on the spot. Give Tesla the equivalent of a “right to work” carve-out and eliminate personal and corporate income taxes for the company and see what happens. It won’t COST New Mexico taxpayers a dime upfront and it will force Democrats in the Legislature to make a decision on policies that should be considered for all businesses in New Mexico.