I love Nevada history, and you’ll find plenty of it in Virginia City. From the Fourth Ward School to Piper’s Opera House, its streets are lined with reminders of Nevada’s frontier past.

Virginia City is located in Storey County, whose boosters like to say, “Legends of the Old West don’t get any richer than they are here.” The county is known for the Comstock Lode of the 19^th century and the great Tax Abatement Bonanza of the 21st century.

Comstock silver mines brought jobs to the region and built fortunes and mansions in San Francisco for its founders. Tax breaks for billionaires have brought jobs to the gargantuan Tahoe-Reno Industrial Center (TRIC) along with a strain on county budgets and infrastructure.

That stress was part of a larger discussion at a recent meeting of the state Legislature’s Senate Revenue and Economic Development Committee. Representatives of Storey County attempted to sell the merits of SB69, which would require companies seeking those Comstock-sized tax abatements to agree to defray the costs of their impact on government services.

If you can believe it, such a commonsense statute isn’t already on the books. Now that’s what I call business friendly.

As Storey County Manager Austin Osborne explained it, the county-sponsored legislation only applies to businesses promising to bring at least $1 billion in economic development to Nevada. At that level, the state offers a 75 percent property and modified business tax breaks for 10 years and a 100 percent abatement of local sales and use taxes for 15 years.

But, wait, there’s more. For businesses pledging to generate at least $3.5 billion in economic development, the property and business tax breaks jump to 100 percent across the board for a decade. Sales and use taxes are erased entirely for 20 years.

That’s what I call business friendlier.

The mild-mannered Osborne was faced with a deceptively difficult task. He wanted to illustrate the challenges facing the county and the need for the legislation without going too far. It’s sort of how I imagine Oliver Twist felt when he asked the master for some more gruel.

“This bill is about helping counties,” Osborne began. “It’s about helping cities, and it’s about helping fire districts respond to impacts that are caused by huge factories that are tax-abated that are assigned to those counties by state regulations.”

He followed with a painfully polite backgrounder on Storey County’s place in the tax abatement bonanza from its moribund years near the end of the last century to the rise of the remarkable TRIC complex and the job growth it has attracted. He reminded the committee that it wasn’t so long ago that Storey was being considered for dissolution.

“So we had to transform ourselves,” Osborne said in a moment of tax-free understatement.

Storey steadily returned to viability after signing a development agreement that resulted in the creation of the TRIC. The county kicked into overdrive with the arrival of the first Tesla Gigafactory, which pledged to pump $3.5 billion into the economy in exchange for a tax abatement bonanza crafted in 2014 during a special legislative session. Since then, $1 billion abatement deals have been secured for Redwood Materials in 2018, and a second Tesla factory in 2024.

Storey officials wanted it clearly understood that SB69 would apply only to tax abatement deals at the $1 billion and $3.5 billion levels of investment and would exclude data centers and standard warehouses.

“In each of these cases, we saw them as a future opportunity for growth, despite the challenges that we would have the first 10 years of 100 percent property tax abatement,” Osborne said. “Storey County across the entire county has investment returns to us that’s enabling us to fulfill capital improvements and operations needs that it’s had in some cases for over a century.”

But its $1.8 billion in estimated tax abatements — three times higher than densely populated Clark County — are double-edged. The growth has been refreshing, but growth without commensurate tax benefits creates challenges even for a county with slightly more than 4,000 residents.

“This point is important because we’re pro-economic development,” Osborne said. “And believe it or not, even while we present SB69, we’re pro-incentives. We think a lot of the incentives, including the $3.5 billion and [$1 billion] are good for Nevada, they’re good for Storey County and good for many counties.” 

He also expressed his appreciation of the Governor’s Office of Economic Development, the state Department of Taxation, and just about anyone else who needed thanking.

But about those Gigafactory challenges.

“They change your life as a county,” Osborne said. “They make things interesting and some of those changes are positive and some of them are challenging.” And the lack of county and local government participation in the process adds to the challenges. Officials are limited to making public comment at meetings in which consideration of community infrastructure needs and fire district considerations are not mandated, but optional.

Osborne attempted to walk a line between championing the bill and daring to offend a company controlled by the richest man on the planet. Tesla, he noted, was kind enough to pay for most of the costs of constructing a 4-mile stretch of highway and a traffic signal, as well as law enforcement and fire vehicles.

His expressed concern?

Signing a government services agreement isn’t mandated, but optional.

“If the company doesn’t want to negotiate a government services agreement,” he said, “it could put the county into a bankruptcy situation, or in a very negative fiscal end-fund balance situation.”

For a moment there, I think Osborne was about to ask for a little more.

Considering Virginia City’s historic Marlette Lake Water System, flood control challenges, and increased fire service needs, having a seat at the table of tax abatement seemed like a reasonable request. But the bill is being opposed by the Governor's Office of Economic Development and other entities that have brought experienced lobbyists into the game.

With the 2024 expiration of tax breaks for the first Tesla factory, the state is expected to collect up to $15 million and has a line of need that stretches from Jackpot to Searchlight.

Let’s see how far SB69 goes and whether it makes history, and whether Storey County ends up with something more than gruel at the end of the process.