Manse Technology Campus wants to build a giant data center on 900 near Manse and 160, at a cost of $18.4 billion.
On its website the company makes a promise. Once the campus is finished it will pay $114.3 million a year in property taxes: $44.5 million for Nye County schools, $35.4 million for the county general fund, $14.8 million for the Town of Pahrump, and $13.7 million for other local services.
Now look at the county's checkbook. Nye County runs its general fund on about $57 million a year. This year it came up about $11 million short and had to cut to balance.
So one new taxpayer is offering to raise county revenue by more than half.
Which is why somebody should check the math.
How property tax works
The county decides what your property is worth and taxes 35 percent of that value. In Pahrump the rate is about $3.41 per $100 of that taxable share. So every $1 billion of property value produces about $11.9 million a year, split among the schools, the county, the town and a few others.
Run that backward and you learn something.
The first problem: the number is too big to fit
To pay $114.3 million a year at Pahrump's rate, a property has to be worth $9.58 billion.
Every piece of taxable property in Nye County right now, every house, business, ranch and mine, adds up to about $2.5 billion of assessed value. This one campus would have to add more than the whole county already has, and then a third again on top.
It gets worse when you split it up. The company says $91.9 million of that tax comes from land and buildings. For that to work, the land and buildings would have to be worth $7.7 billion.
Buildings are the cheap part of a data center. The shell, concrete, steel, grading and paving together run about 7 or 8 percent of a budget like this. On $18.4 billion, that is roughly $1.4 billion.
The promise needs the buildings to be worth five times what they cost.
The second problem: computers get old
The company calls its tax numbers "annual and recurring" and says the real property piece will be "never reduced or abated."
Nevada law does not work that way.
Think about a new pickup truck. Drive it off the lot and it is worth less. Nevada taxes business equipment the same way and publishes the schedule every year. A computer server gets a five year life. After that the state values it at almost nothing.
A room of servers that pays $22.4 million in tax its first year pays about $13.6 million the second, $8.2 million the third, and roughly $1.3 million by year five. About 94 percent of it is gone in five years.
The only way to keep that number flat is to buy roughly $800 million of new servers every year, forever. No data center will ever do that.
Here is the part that gives it away. On that same web page, the company's own chart shows the tax peaking at $114.3 million in year six and falling to $107 million by year ten. Their own graphic shows the money going down, two sections below the word "never."
Where the $18.4 billion actually gets spent
Forget taxes and follow the construction money.
Mostly overseas. More than half the budget is computer equipment, and those chips are made in Taiwan. Even the ones now made in Arizona get shipped back to Taiwan to be finished. The memory that goes with them comes almost entirely from South Korea. No plant in the United States makes it.
The next biggest pieces are electrical and cooling equipment. The big transformers come from Virginia, North Carolina, Georgia and Mexico. The switchgear comes from Tennessee and the Carolinas. The chillers come from Ohio, Sweden and Canada. Servers get assembled mostly in Texas.
Now the question that matters. What does Nevada make?
Large transformers: none. Switchgear: none. Backup power: none. Generators: none. Chillers: none. Servers: none. One small exception, a company in Reno building a new kind of transformer, planning about 60 jobs. It is 450 miles away.
Nye County is thinner still. The county's list of its 20 biggest employers has no manufacturer on it at all. The biggest is a gold mine 170 miles north. In Pahrump it is a Walmart, a casino and a hospital.
What Pahrump can actually sell this project is rock, sand, concrete, diesel, trucking, dirt work and motel rooms. Concrete has to be poured within an hour of mixing, so it has to be local. That part is real and worth having.
Add it all up and the best estimate is that somewhere between 1 and 3 percent of the $18.4 billion ever touches a Nye County business or paycheck. Call it $200 million to $600 million spread over five or more years.
Everything else is made somewhere else.
The argument you should not make
A lot of people hear that and jump to a conclusion: the money is spent out of state, so Nevada gets no sales tax from it.
That is wrong, and better to learn it here than at a public meeting.
Nevada has a use tax. Buy something anywhere in the world, bring it here to use, and you owe the same tax you would owe buying it down the street. The tax follows where the equipment ends up, not where it was bought. A transformer from Mexico, a chip from Taiwan. Once it lands in Pahrump it owes Nye County's 7.6 percent. Property tax works the same way.
The equipment is “taxable”; the real leaks are elsewhere.
Leak one: Nevada does not tax work
Nevada taxes things, not labor. Design, engineering, financing, legal work and construction labor are all outside the sales tax. That is 11 to 18 percent of the budget, and it is the part most likely to be done by people who live here.
The part that could stay local is the part Nevada does not tax. The part that gets taxed is machinery from overseas.
Leak two: the tax break nobody has asked about
Roughly $15 to $16 billion of this project is equipment and materials. At Nye County's 7.6 percent sales tax, that is about $1.2 billion in one-time tax as the campus gets built.
Nevada has a special program for data centers that cuts 7.6 percent down to 2 percent.
Look at how the 7.6 percent normally divides. Two percent goes to the state. The other 5.6 percent is school and local money, including a quarter percent Nye County voters approved for roads in 1986 and a half percent they approved for public safety in 2014.
When the tax break kicks in, that 5.6 percent goes to zero. And the 2 percent that survives goes to the state general fund in Carson City. Not the county. Not the schools. Not the town.
There is a reason the break stops at exactly 2 percent. Nevada voters approved that 2 percent in 1956 and the Legislature cannot touch it. Everything above it is local money, and local money is what gets given away.
The company told the Pahrump Valley Times there are "no property tax abatements proposed for this project." Its own website says its equipment tax number holds up "even after the state abatement is applied." Those two statements cannot both be true.
Nobody has asked about the sales tax break at all. It is the bigger number.
Leak three: the school money leaves
The biggest single line on the company's chart is $44.5 million a year for Nye County schools.
In 2019 the Legislature changed how Nevada funds schools. The main school property tax no longer stays in the county that collects it. It goes to Carson City and gets split across the whole state by how many students each district has, not by how rich the local tax base is.
About 56 percent of that school money leaves Nye County. What stays is locked to bonds and buildings. It cannot hire a teacher.
Nevada already ran this experiment. Storey County has Tesla, Google and Switch, the richest industrial tax base in the state. Its school district is one of only three in Nevada the funding formula would have cut.
About those 380 jobs
The company promises 380 permanent jobs.
All 13 data centers in Nevada that currently hold these tax breaks promised about 300 permanent jobs put together. One site in Pahrump would have to beat all of them combined, and the state program only requires 50 employees to qualify. That is the easiest claim on the page to check, and it should get checked before anyone votes.
The company says 1,600 construction workers at peak. Most will not be from here. Pahrump is 60 miles from Las Vegas over a two lane mountain pass. When northern Nevada built its data centers, the electricians union there said most of its 4,000 members were on data center jobs and many had come from out of state. Nevada requires half of construction workers to be state residents, but it will not release the reports that would prove it, and "Nevada resident" includes Las Vegas. Nothing requires a single hire from Pahrump.
What to ask
None of this proves the project is bad. It proves the sales pitch has not been tested. A few questions would test it, and all can be answered on paper.
Does the $18.4 billion include the computers? How many megawatts is this? Will the company, any tenant, or any contractor apply for the sales tax break, and will they sign away that right in writing? How did they calculate $91.9 million and $22.4 million? How much will they spend replacing servers each year? Where did the job numbers come from? Will the generators and chillers count as buildings or equipment, since only equipment gets the break? Where will out of town workers sleep? And have they ordered the transformers, which now take two to four years to arrive?
A project that can answer those loses nothing by answering them.
The risk to Nye County is not that the answers are bad. It is that nobody asked, and the vote comes first.
