Amazon’s search for a second headquarters has produced eye-popping revelations about the subsidies and other benefits cities across America are offering to a company worth some $820 billion.
But major firms in Silicon Valley have been quietly hauling in subsidies worth hundreds of millions of dollars to each company, and in one case, directly robbing a school district of funding, according to data from a subsidy watchdog.
Tesla, valued by market capitalization at $54 billion, led the way by far, with $3.5 billion in public-money subsidies since 2007, according to the non-profit Good Jobs First. Google’s parent Alphabet, market cap $762 billion, has received $766 million since 2000, with most of the subsidies coming since 2011, Good Jobs First reported. Apple, market cap $894 billion, has racked up $693 million in subsidies since 2009, the group reported. Facebook, market cap $549 billion, has reaped $333 million since 2010, according to the group.
Good Jobs First classifies tax breaks as subsidies.
Facebook, Apple and Alphabet did not provide an immediate response to questions about the subsidies.
For the four companies, the vast majority of subsidies came from outside California, the group reported. Tesla, for example, received $1.3 billion in one batch of tax breaks for its Nevada “Gigafactory” battery plant, benefits that are contingent upon the company investing $3.5 billion in what it expects will be a project ultimately costing $10 billion, according to Good Jobs First.
In Nevada, subsidies to Tesla cost local governments $68.7 million in 2016, with a school district near Reno losing $36.7 million in revenue “solely to Tesla subsidies,” according to Good Jobs First.
Tesla pointed to significant funding it will provide to Nevada schools.
“We have been investing in education through our high school manufacturing development program, and we’ll begin our 5-year, $37.5M investment into Nevada K-12 STEM education this summer,” the company said in a statement.
Tesla characterized the benefits it’s received in Nevada as small.
“Any fair description of Tesla’s incentive package from the state of Nevada should make clear how tiny it is – not just relative to the billions of dollars in subsidies the oil and gas industries receive every year, but also relative to the total cost of the Gigafactory and the significant economic development that Tesla is bringing to Nevada,” the company said in a statement.
“The incentives largely consist of foregoing sales and use tax on factory equipment, which are taxes that Nevada wouldn’t have received if the Gigafactory weren’t there. Tesla only receives these incentives if it performs, as they are tied to Tesla spending a minimum of $3.5 billion and creating thousands of jobs, which is precisely what we are doing. If Tesla executes, both Nevada and Tesla share the upside, and if it does not, only Tesla suffers the downside.”
