This article originally appeared in the Reno Gazette Journal
As an entrepreneur, I take risk seriously. Understanding the difference between blind hope and calculated risk is what separates successful entrepreneurs from those that crash and burn. Bristlecone Holdings is among the rapidly growing financial technology companies in the country and has created millions in value in Nevada in just a few years. That would have been impossible without embracing risk in a prudent, intelligent way.
This is why I’m at a loss to comprehend the state’s approach to economic development. It more closely resembles blind hope than calculated risk. Nevada’s “subsidies-on-steroids” approach is imprudent from a risk perspective and unfair to the state’s residents. When companies like Tesla and Faraday receive massive government handouts while placing a heavier burden on our public infrastructure and services, it’s the citizens and small business owners who pay the price. Faraday’s proposed subsidy package siphons off part of our taxpayer-funded highway trust to build special infrastructure to benefit a single company.
I understand growth comes with costs. As a citizen, I benefit from roads, police, fire, an educated workforce … the list goes on. But when someone else stops paying their fair share for these important services, one of two things invariably happens: the quality of the services erode or the cost to everyone else goes up. At a time when state revenues are scarce, is subsidizing the selfish interests of a single company a higher priority than making critical investments that benefit all businesses in the Silver State?
In a recent nationwide study of $3 billion in state economic development spending through key programs, the bulk of resources end up benefiting big, out-of-state businesses. With 80 to 96 percent of the subsidy dollars going to big business, you’d think I’d be asking for my piece of the pie. But I’m not. I chose Nevada because Nevadans value the core virtues of freedom and fairness in a way that a lot of other states do not.
Like every other entrepreneur in the nation, the things driving my investment decisions transcend subsidies: It’s the people at my company who do great work to delight our customers. When asked by Good Jobs First about state incentive policies, 72 percent of small business leaders in states with similar programs do not believe their state’s incentive policies promote economic growth. The vast majority of these leaders agree that overspending on big incentive deals is hurting state finances and states are not effectively addressing the needs of small business.
Lawmakers should think twice about continuing to pick winners and losers behind closed legislative doors and focus instead making on investments that encourage their constituents’ prosperity.
Dusty Wunderlich is CEO of Bristlecone Holdings. Additional research support provided by Thomas Cafcas of Good Jobs First.