Red State Taxpayers in Danger

(DailyEmailNews.com) – Raising the alarm for the possible financial consequences, Georgian taxpayers might be held liable if electric vehicle manufacturer Rivian does not resume building its large-scale $5 billion production plant near Atlanta.

This delay has caused concern among state lawmakers and taxpayers because local authorities offered the company up to $1.5 billion in subsidies and tax incentives, as they anticipated new jobs and revenue.

Although it halted construction, Rivian reassured state officials it remained committed to the project by sticking to environmental regulations and contractual agreements.

However, there are concerns about how Rivian will address current site issues such as security and environmental stabilization.

A Georgia spokesperson claimed that while taxpayer funds were used for site development, none were directly allocated to Rivian.

Instead, these funds were invested in site preparation; the site remains state-owned but is leased to Rivian.

Rivian reported losses exceeding $2 billion in 2023 and more than $3.1 billion in 2022. The company has also reduced its workforce by laying off about 10% in February and an additional 1% in April.

Last November, a municipal agency awarded the company up to $15 billion in taxable bonds, which were intended for site rental payments.

Often referred to as phantom bonds, these bonds serve as a way for the state to provide tax breaks by leasing the land to Rivian, with the company’s tax duties contributing to the rental payments.

The plant was criticized from the beginning, even being dubbed the “Worst Economic Development Deal of the Year” by the Center for Economic Accountability (CEA) in 2022, due to concerns about its benefits to state taxpayers.

“The state had no way of knowing how good an investment it was when it made the deal because it never bothered to do even the most basic analysis to find out,” CEA president John Mozena said.

Rivian’s facility is projected to generate 7,500 jobs with an average annual salary of $56,000 and create an estimated total economic value of $7 billion if completed.

The deal includes a $1.5 billion tax incentive package with strict clawback conditions if Rivian fails to create the promised jobs and invest $5 billion by 2028 and keep it until 2047.

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