Where is PLAN's outrage over tax plan to soak the poor?

To fully understand this question, you should read Geoff Lawrence's commentary about two proposals to dramatically increase Nevada's "sin" taxes. AB277 and AB255 would more than double the taxes on tobacco and alcohol.

The Progressive Leadership Alliance of Nevada (PLAN) put out a study earlier this year, detailing how sin taxes disproportionately affect the state's poorest families as it relates to their income. For details, look on page 22 and examine the percentage of income paid by families in the "Other sales & excise tax - individuals" category. Families among the lowest 20 percent of income earners pay 1.3 percent of their incomes toward that tax. Families in the top 1 percent of wage earners pay 0.0 percent.

PLAN's marketing of its report leads off with the claim that "PLAN's report details the fundamental unfairness of the existing tax system to poor and working families," and the report devotes a couple of pages to a section titled, "Nevada soaks the poor."

Here's a challenge for PLAN: If you're serious about fixing the "fundamental unfairness of the existing tax system," then come out against AB277 and AB255, which your own study shows would disproportionately affect the poor.

PLAN should do the intellectually honest thing and come out against higher sin taxes. Otherwise, its "fair-tax-system" rhetoric will be revealed as a mere disguise used to try to get us all to pay higher taxes.

For more, read this Review-Journal op-ed that calls out PLAN for supporting higher sin taxes.

Side note (and a potential argument against this point): Comparing any expense as a proportion of income is slanted, because the poor pay more for almost everything as a proportion of their income. That's part of the reason why they're considered poor. It is a good argument, but since proportion of income is the standard PLAN chose to use, it's fair and legit to hold them to their own criteria.

Count Taxula

(Spokesman for the 75th Nevada Legislature: "I vant to vaise your taxes!")

The great thing about government transparency and freedom of information is that the government can't get away with bald-faced lies for very long. So, though the governing class hopes citizens will be left standing ignorantly in the dark while politicians blow billions of dollars on their chums and sponsors, we can still shine light on their nefarious - although, of course, "well intentioned" - activities. The key thing is knowing the right question to ask.

As Geoffrey Lawrence has pointed out, this recession is little different from the last one. Then, previous government excess had led to a general-fund revenue shortfall when the economy subsequently weakened. Taxes were raised, ostensibly to maintain "vital programs," but in reality new programs were created and spending was expanded.

This recession is the same. We hear cries about how the sky is falling, doom is impending, and a return to the stone age looms - despite the fact that what is already scheduled is a roughly 5 percent increase in total government spending over the next biennium. But that is not enough; Nevada's governing class wants to increase spending a minimum of 17 percent, so taxes must be raised.

So, we've just raised the room tax, we are poised to raise sin taxes and the regressive sales tax is likely to be increased as well. Rumor also has it that Carson City is looking to double, if not triple, the Modified Business Tax - simply one of the most destructive taxes Nevada's governing class could ever have created. If your goal is to increase unemployment and reduce wages, this is the tax to use.

Yet, tax-and-spenders still aren't happy. They want an income tax, and it has nothing to do with being "broad-based." It has even less to do with making taxes less regressive. In fact, the poor won't care that taxes are less regressive if the total tax burden they have to bear is greater. The tax-hikers should get real: What matters at the end of the day to people is the total amount we are forced to give up in taxes - not taxes as a percentage of our income relative to someone else.

Big spenders want an income tax because that allows government spending a guaranteed increase each time our income levels rise. About the only thing keeping Nevada from becoming the next California, Connecticut or Michigan is the fact that we don't have an income tax allowing politicians unlimited, automatic access to our billfolds.

If state lawmakers continue to increase taxes, all they will do is tee up another spending spree, which will lead to our next phony budget crisis. If you need more proof, below is a chart showing general-fund expenditures since 1978. The data comes directly from the office of State Budget Director Andrew Clinger. As you can see, government spending drastically increases after the 2003 tax increase. If you are wondering why spending increased in 2009, it is because state lawmakers evaded adult decision-making to bring spending into line with actual revenues, and instead tried to maintain government spending with fund sweeps and other gimmicks - all to maintain "vital programs," of course.


*This figure is adjusted for inflation to 2008 dollars.

Milwaukee shows school choice works

Milwaukee's school-choice program is the grandfather of voucher programs in the United States. As such it is often a target of left-wing anti-choice groups (primarily teacher unions) that work very hard to prove that school choice fails. Milwaukee's program is their favorite punching bag, and it is true that the simple fact that Milwaukee's program was first does not necessarily mean it is the best.

Actually, Milwaukee's program is very small in comparison to new programs begun in states such as Arizona and Florida. Nevertheless, research proves the Milwaukee program works, contrary to the spin-doctoring coming from the anti-choice groups.

A recent battery of empirical analyses of Milwaukee's voucher program found some interesting results, but newspapers focused on the wrong information. The unions seemingly argue plausibly that vouchers are expensive, harm public schools, decrease racial diversity and only really help the rich pay for private schools they can already afford.

Research, however, suggests the exact opposite. The School Choice Demonstration Project found the following:

1) The voucher program saves taxpayers money.
2) Vouchers increase racial integration.
3) Voucher students and students in the Milwaukee public schools both saw improvement, with no statistical difference between the two groups.
4) Milwaukee public schools that face voucher competition increase attention on their low-income and low-performing students. Thus, vouchers improve the quality of public education.

According to Greg Forester, "The students in the comparison group were selected by the researchers because they had similar demographics to those of the voucher students, similar test scores at the start of the study, and came from the same neighborhoods as the voucher students." Bear in mind, the voucher students are not likely to be wealthy, white suburbanites.

Other studies even suggest that Milwaukee's voucher program may have led to increased graduation rates.

The empirical evidence of Milwaukee's voucher program suggests that the unions' favorite scare-charges are flat-out wrong. There is no white flight because of vouchers; instead there is increased racial diversity. Low-income students are the biggest beneficiaries of the program, because vouchers let them attend private schools that they otherwise could not (rich students have the opportunity either way). Vouchers are not more expensive, and public schools do not suffer because of the competition, but instead, improve. More importantly, student achievement increases across the board for both voucher students and students who remain in the public school system.

As the evidence mounts for greater parental choice in education, the question remains: Will Nevada's legislators lead the way for education reform or continue to fight a rear-guard action against it?

No justice in education

The Arizona Supreme Court, citing the state's Blaine Amendment — the bigoted anti-Catholic constitutional amendment adopted by several states in the late 19th century — has struck down two parental choice voucher programs.

The Institute for Justice, in defending the voucher programs, noted that the voucher money was given to parents who then decided which school was best for their child. The voucher made no distinction between secular and religious schools because the choice was given to the parents. Despite this distinction, opponents of parental choice have sought to use the legacy of religious bigotry to destroy the program.

Sadly, the voucher programs were for students with disabilities and foster care children. While public schools spend thousands of dollars on sub-par programs for children with disabilities, the school systems also regularly use children with disabilities as a scapegoat for system-wide failure. Foster care children (like low-income children) are also used as scapegoats, since they often have to move from school to school and rarely have a stable home life. Both programs offered scholarships for these students to attend a school of their parents' choice, offering much needed help and stability.

The biggest irony about the court's decision is the fact that the State of Arizona permits education bureaucrats to use taxpayer dollars to send children with disabilities to private schools. Arizona's Supreme Court utterly failed to reconcile this fact with its decision. The only difference between the state's program and the voucher program is "who chooses." Thus, sadly, the court has ruled that bureaucrats, not parents, have a right to make the choice on what school a child attends.

Meet Andrea Weck, single working mother of Lexie, a 6-year-old girl with autism, cerebral palsy and mild mental retardation. When the 2008-09 school year ends, Lexie — the judges decided — must lose her voucher and return to the public school that has already failed to provide her an education that made her and her mother happy. This video about Lexie reveals how the voucher program helped change her life.

Fortunately, Arizona's tax-credit programs are safe and will continue next year. This setback in Arizona need not stop Nevada from moving forward with real progressive education reform. The U.S. Supreme Court in 2002 held in Zelman v. Simmons-Harris that an Ohio voucher program where the vast majority of the participating private schools were religious still was religiously neutral, because the low-income parents who received the state funding chose freely among participating religious schools, participating private secular schools and public schools. Here in Nevada, Sen. Barbara Cegavske has a bill to help students with disabilities attend a school selected by their parents, while Assemblyman Ed Goedhart has proposed a universal education tax-credit program.

Gibbons caves, accepts federal stimulus funds

The bad news is Gov. Gibbons announced yesterday that he would accept $77 million of federal stimulus money. Nevada must use the money to expand its unemployment program. The good news is that he may change his mind tomorrow.

The problem with this "free money" is that when the $77 million runs out, the expanded unemployment program won't. Earlier this week I wrote a piece criticizing Speaker Buckley for complaining about Nevada's boom-bust cycle and then supporting a plan that is a guaranteed to bust. By accepting this money, Gov. Gibbons is also enabling the boom-bust cycle.

The excuse Gov. Gibbons used in his release to justify taking the money was similar to Speaker Buckley's:

"The federal government has recently assured states that the expanded coverage base can be retracted in the future, before funding for such coverage becomes a permanent state obligation," the release states.

Which is ironic, because last week Gibbons used this argument as a reason not to accept the money.

Gibbons in recent weeks has questioned whether Nevada should take the money. By accepting it, he expects that Nevada would be bound to continue paying greater benefits to greater numbers of people even after the stimulus money has run out.

"It is totally unacceptable," said Gibbons when told of Buckley's move. "The people (of Nevada) will have to pay for this change forever."

And Buckley spent months touring the state using responsible-sounding rhetoric like this:

I Believe We Must Re-Design The Financial Underpinnings Of State Government

Spending: prioritize goals for government services in a long-term plan, allocate spending according to these priorities, and only pass budgets that are consistent with the plan.
Revenue: Re-evaluate revenue for adequacy to fund priority services and to ensure fairness, stability, and transparency.
Stability: we must stop boom-or-bust cycles by creating a budget reserve account large enough to allow us to maintain a consistent level of priority services, regardless of any rise or fall in state revenue.

I guess when the rubber meets the road, it's just easier to pass the buck to future legislative sessions, even if you know that's not the responsible thing to do and you've spent months complaining about how other legislators have done it to you.

Don't worry. You and I will be paying for it while Gov. Gibbons and Speaker Buckley are retired or in different offices. Awesome.

Spending more money does not improve education

Senator Schneider has a bill to increase K-12 education spending by $1.6 billion over the next biennium. Read NPRI's latest article, "Spending for spending's sake" to see why spending more money will not work.

The free market at work in Nevada: creative destruction

Everyone's heard the news about Nevada's unemployment rate breaking the 10 percent mark, and we probably all know people who are affected by businesses that are shutting down.

What's often not reported are the new jobs that are being created. There was a trio of encouraging articles from the Reno Gazette-Journal today — Staples is opening two new stores in Reno in April after just opening a new store in Henderson, 29 jobs in diverse industries are coming to the Capitol region, and Carnival Cruise Line just posted a 10 percent profit increase.

Even in the midst of an overall economic downturn, there are industries of growth. In fact, downturns are necessary for economic growth. The technical term is creative destruction.

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation — if I may use that biological term — that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. . . .

Looking back at America's history, we can clearly see this process at work.

In 1780, over 95 percent of Americans were farmers; today about 3 percent are, and they grow many times more food per acre than their ancestors ever dreamed was possible. Those who abandoned farms were displaced to cities. But would their descendents, including urban environmentalists, prefer to give up their modern comforts and return to the era of sunup-to-sundown, back-breaking farm labor?

Think also about all the horse and buggy manufactures who were put out of business by the automobile.

Creative destruction isn't fun or perfect, but it sure beats the alternatives — like the Fed artificially propping up housing prices and contributing to the housing market collapse.

Sen. Coffin proposes bill to tax prostitution

If at first you don't succeed, try, try again.

Sen. Bob Coffin, D-Las Vegas, proposed a tax on prostitution today that he says could raise $2 million a year for the state.

Patrons of prostitutes — both legal and illegal — would pay an extra $5 tax per session under the bill, which Coffin said was his idea alone.

In the runup to the legislative session, a lobbyist for the state’s legal brothels volunteered to be taxed, an effort that some said would guarantee their continued survival. Assembly Speaker Barbara Buckley turned down the industry, effectively killing the effort.

This article doesn't give Coffin's current justification for his bill, but when he floated this idea in January, he wanted money.

"I'd be happy to listen to arguments for legalization anytime," Coffin said. "In the meantime, I know we have to get some money from the world's oldest profession."

Since Sen. Coffin's bill proposes to tax customers of both legal and illegal prostitutes, I'm guessing this bill is simply a tax grab without the previous guise of legalization.

And taxing illegal activites? How's that going to work? And why not tax all illegal activities?

Now that's a way to solve Nevada's supposed budget deficit that no one has mentioned. Maybe that's what the Democratic majority's secret tax increase, err… revenue enhancement, plan is — expand the sales tax to include drugs, robberies and murders.

What deregulation?

Rachel Maddow, the dogmatic, left-wing host of an MSNBC "news-based" show, asserted last week that deregulation not only caused the world financial crisis, but that deregulation is causing average Americans to increasingly become impoverished. Although the facts don't square at all with Maddow's misconceptions, many Americans share her outlook.

So ... let's consult something objective. Below is a graphic representation of the pages of the Federal Register, which each day publishes the federal government's new rules and regulations. Given that the total pages devoted to regulations were larger under George W. Bush than under Jimmy Carter, we have to ask: "What deregulation?"

(The Federal Register has been around since 1936, starting with just 2,620 pages. Over the years new rules for reporting regulations has increased the required documentation. 1973 is the earliest year with which we can begin a modern comparison)

What about the supposed growth in poverty? Well, that is a myth, too. Below is the U.S. Gross Domestic Product (GDP) per capita from 1900 to 2008 (in 2000 dollar values). GDP per capita represents the average wealth per American. GDP per capita is a better measurement for examining data over time than "household income," because what constitutes a "household" changes over time — distorting the value of that data — while what constitutes an individual does not.



So — where is the growing poverty, and exactly which deregulations caused this crisis?

Assembly Ways and Means committee wants to enable Nevada's boom-bust cycle

And unfortunately, their vote was unanimous.

The Assembly Ways and Means committee unanimously passed AB469, designed to force Gov. Jim Gibbons' hand in accepting all of the stimulus money for unemployment benefits for which Nevada is eligible.

If you're wondering what this has to do with Nevada's boom-bust cycle, consider this a shameless plug for my new commentary — "Enabling Nevada's boom-bust cycle" — which fully explains the dangers with this bill.

But here's the lowdown. Nevada must expand unemployment eligibility to receive $77 million of federal stimulus funds for unemployment benefits. The problem is, when the money runs out, the program doesn't.

If this bill passes, Nevada will have created a program that is guaranteed to lead to future shortfalls.

Isn't that what the legislature and governor are complaining about right now? We're told that Nevada's government grew too fast and didn't save enough. Now that the economy and tax collections have slowed down, the legislature is faced with the "crisis" of either bringing government spending back to sustainable levels or raising taxes.

So the Ways and Means committee's response is to expand a program that is guaranteed to bust in the near future? Awesome.

In my commentary, I specifically question Speaker Buckley for spending months touring the state talking about the need for sustainable budgeting and then spearheading support for this bill. Since this bill passed the committee unanimously, that critique is now bipartisan.

There is a glimmer of hope that some legislators will have the political courage to say no to short-term monies that create long-term deficits — the very thing Speaker Buckley previously claimed she wanted. But it's only a glimmer.

Several of the committee's Republicans expressed continued concern that the measure would create an future [sic] unfunded burden on the state's businesses and said they reserved their right to change their vote on the floor.

Are privately funded toll roads coming to Nevada?

Not if Sen. Mike Schneider, D-Las Vegas, gets his way.

State Sen. Mike Schneider, D-Las Vegas, said he had heard nothing but complaints from legislators in states that have allowed private companies to build roads.

Rather than "public-private partnerships," Schneider said such arrangements were becoming known as "pickpocket partnerships."

"I have heard this over and over again from legislators in every state that does toll roads," he said. "They are furious."

Overall reaction at Thursday's hearing was decidedly negative. There had been some question as to whether tolls roads were even constitutional in Nevada.

But Thursday afternoon, Legislative Counsel Brenda Erdoes said that there was nothing unconstitutional about allowing private companies to build roads for the state and then charge tolls.

She said a relatively simple change to the bill would resolve problems about the constitutionality of letting private companies charge tolls on roads that they would construct and maintain for the Nevada Department of Transportation.

In his special last week, John Stossel did a great segment on toll roads and using private money to fund road projects. Sen. Schneider, who has only heard complaints about the projects, or anyone interested in this subject should watch this video.

Failure is no longer an option

Florida's low-income Hispanics now outperform the average student in Nevada on the 4th grade National Assessment of Education Progress (NAEP) reading exam. How'd they do it?

Simple, Florida reformed the way they thought about public education. Read more about it in NPRI's latest report: "Failure Is No Longer an Option"

Let the sun shine in on Nevada's government

Over at TransparentNevada, it's all transparency, all the time. Many of the rest of us, though, don't think about it quite as often.

That's why this week is Sunshine Week, a week for open-government advocates to dramatically increase the PR about the need for open and transparent government. And since some of the biggest supporters of the public's right to know are newspapers, you may have read something about it.

This year Sunshine Week conducted a survey of the types of public documents that are available online in each state.

Most Americans can easily find videos of water skiing squirrels on the Internet but they’ll have less luck finding out whether their children's school buses and classrooms are safe, or if neighborhood gas stations are overcharging.

The Sunshine Week 2009 Survey of State Government Information online found that while more and more government records are being posted online, some of the most important information is being left offline. And in some cases governments are charging taxpayers to access records that they already paid for, such as death certificates…

"This study shows that, while a lot of government information is available online, many states lag in providing important information that people care about," said David Cuillier, Freedom of Information Committee chairman for the Society of Professional Journalists. "People should be able to find inspection records for their schools online. And the government shouldn't be charging people for death certificates and other records."

Nevada does a fairly good job with transparency. Access to information in 14 of the 20 categories is free and online. I won't mention Nevada's ranking among the states, because rankings don't tell you anything. Who cares if Nevada was the No. 1 state in the nation, but only provided information in 10 of the 20 categories. It would have a higher ranking, but its citizens would have a less transparent government.

Nevada's citizens should only be happy when the state provides information in all 20 categories.

Failure is not success

In George Orwell's famous novel about a dystopian future, 1984, the totalitarian state regularly announces that, "War is Peace, Slavery is Freedom, Ignorance is Strength." Such doublespeak may seem unbelievable to us today, but when it comes to education in Nevada, many indulge beliefs equally as absurd.


In a recent letter to the editor of the Las Vegas Review-Journal, we criticized diversity initiatives of the Nevada System of Higher Education, asking, "When it comes to the Nevada System of Higher Education, how well are its diversity efforts actually helping students?"

It is very clear that 11 percent and 15 percent four-year graduation rates at UNLV and UNR, respectively, demonstrate a dismal ability to graduate students. After six years, still less than 50 percent have graduated at either school.

One commenter, "John F," argued that, "Low graduation rates at schools like these is proof that they are working. It's the job of these schools to give those state residents who want a college education the opportunity to try. Like all other aspects of American life, it's about having the opportunity; nobody guarantees you will succeed."

To "John F," low graduation rates mean success. Say what?

Providing students with an opportunity to fail or to succeed is one thing, but our universities are not merely doing that. Rather, they are recruiting students with false promises of a large payoff after graduation, luring them in with state and federal subsidies that defray the upfront cost. Worst of all, they are actively recruiting students who have little chance of ever graduating.

"John F" simply does not get it. Instead of giving these particular students an opportunity to fail or succeed, we are almost certainly setting them up for failure. Rather than "opportunity," that is entrapment. If the state is to give students a real chance of graduating, it must first reform K-12 education so that high school graduates are truly prepared for college. For students who have already been failed by the state's K-12 system, we have something called "community college," for about one-third the price of UNR or UNLV.

If the state is truly trying to give these students a chance, why encourage them to go to the most expensive universities? The answer is simple: The state's higher-ed establishment is not out to give students a chance. It is simply out to take their money.

"John F" concludes, "Again, we owe them the opportunity to try, we don't owe them a guarantee of success."

On this, John, you are right. We don't owe them a guarantee of success—we owe them honesty and a good education, not a system that robs the poor to pay the Ph.D.

Will Horsford stop the NSEA from preventing true ed reform?

In a recent Las Vegas Sun article, Nevada State Education Association President Lynn Warne criticizes State Senator Steven Horsford (D). "If he represents the children," said Warne, "why has he represented them in such a way that has left them sitting in overcrowded classrooms with lack of supplies and teaching materials?"

What triggered Warne's ire? Horsford had had the temerity to acknowledge gods higher than Nevada's teacher union. "It is about the future and the children who depend upon us in the classroom," the senator said in a debate. "The children are more important to me than any teachers group, than any company who thinks they can decide tax policy."

On balance, Horsford brings more sanity to the discussion. While the vast majority of studies on the impact of higher spending on student achievement show none, Horsford is right about the teacher union wanting to control tax policy. The State of Nevada's current education policy is not about the children; it is about redirecting tax dollars into the coffers of the teacher union and into the subset of construction firms that have the inside track for building our palatial schools.

This is why the teacher union consistently opposes almost all education reform measures, no matter how much evidence exists, showing the benefits for students:

• Evidence suggests certification requirements harm students and keep minority teachers out of the profession? Oppose reform!



• Evidence shows that charter schools improve student achievement? Oppose reform!



• Evidence shows that vouchers programs work, work and work? Oppose reform!



• Evidence shows that scholarships for low income children help students and are immensely popular among minorities? Oppose reform and kill any existing programs!



• Merit pay for good teachers? Terminating bad teachers? Those are opposed, too.

Always the only "acceptable" answer is more money. Help or harm for students is never a real factor.

Important evidence continues to mount, demonstrating that parental choice programs like scholarships, charter schools, merit pay, alternative teacher certification and value added assessment improve the quality of education. Scholarship programs for low-income children, children with disabilities and children in failing schools are gaining in popularity. It is only a matter of time until popular opinion swings completely over in favor of parental choice, and real education reform arrives, sweeping the teacher union and its dogmas into the ash heap of history.

Now that Senator Horsford has outed the teacher's union's true motives, will he lead the charge for real and meaningful education reform in Nevada? Or just follow in its wake?

Questions that should be answered at Saturday's town hall meetings on Nevada's budget

Tomorrow, Saturday, March 14, is a chance for residents in Las Vegas and Reno to tell some of Nevada's legislative leaders what they think about the state's budget and the third largest tax increase in Nevada's history.

The best part is that you don't have to go to Carson City. You can participate in a town hall held in Las Vegas or Reno.

Full details are here, but here's the scoop:

Date: Saturday, March 12, 2009
Time: 9:00 am
Location: Grant Sawyer State Office Building-Room 4401, 555 East Washington Avenue, Las Vegas, NV and Washoe County Commission Chambers, 1001 East Ninth Street, Reno, NV

The Las Vegas hearing will be chaired by Sen. Majority Leader Steven Horsford and Assembly Ways and Means Chair Morse Arberry.

The Reno hearing will be chaired by Senate Finance Co-Chair Bernice Mathews and Assembly Majority Whip Sheila Leslie.

Here are some questions worth being asked of—and answered by—our elected officials:

• The Review-Journal has reported that total state spending (not just general fund spending) will increase by 5 percent after Nevada receives stimulus money from the federal government (and not including the room tax increase). Many families and businesses in Nevada would be overjoyed by a 5 percent increase in their personal lives or businesses, and yet the Nevada Legislature continually refers to the current budget situation as a "crisis." Why shouldn't Nevada's government prioritize its spending just like families and businesses across the state are doing?
• Sen. Horsford, you were quoted in the Review-Journal as saying, "Cutting teacher salaries is the same thing as putting a tax on teachers of the state. We can do better." Do you also oppose raising taxes on the other citizens of this state? And if not, why are teachers given a special exemption from the salary holds and decreases that are affecting private-sector workers and their families?
• Per-pupil, inflation-adjusted education spending has tripled in Nevada over the last 50 years, but results have been stagnate. Nevada now spends over $10,000 a student per year, but more than 40 percent of Nevada's fourth graders can't read at grade level. Graduation rates have dipped below 60 percent. Since dramatically increasing funding has not solved these problems, what structural changes do you think will increase educational achievement?
• The Legislature has just passed the third largest tax increase in Nevada's history. Will you support any other measure that raises taxes this session?
• Speaker Buckley has been talking for months about Nevada's boom-bust cycle. She says we spend too much in the boom part, and we can all agree that Nevada is now in the bust part of the cycle. Therefore, previous legislatures have spent too much during the boom times. Do you agree that Nevada's government is affected by this boom-bust cycle and, if so, what specific programs grew too large during the boom part of the cycle and need to be cut back?
• The Las Vegas Sun reports that the state has given out over $45 million in tax incentives to solar and geothermal projects to create 89 permanent jobs. The Nevada Department of Business and Industry has given away hundreds of millions of tax dollars over the years to businesses. Why is it the government's role to pick the winners and losers in an economy through tax incentives, and would you support the elimination of these taxpayer subsidies?

Is there another question you want our politicians to answer? If so, leave it in the comments.

Judgment Day...for bad teachers.

Will robots replace bad teachers?


Many Americans seem upset that jobs are being "outsourced" overseas. Others are upset with Mexicans who immigrate, legally or otherwise, and are taking "American jobs." Both groups are worried about cheap labor "taking our jobs."

Surprisingly, however, no one today seems worried about the arguably greater threat of robots. After all, robots don't require sleep, food or smoke breaks, and they don't even earn a salary.

Actually, to date, robots have considerably improved the lives of almost everyone. Yes, robots have displaced workers on a lot of jobs, but goods made robotically are generally of superior quality and considerably cheaper, benefiting consumers. Even workers can reap the benefits, since those who remain in the increasingly roboticized factories earn higher wages from their increased productivity.

Now, out of Japan, comes the world's first robotic teacher. Saya, as the robot is known, has very limited capabilities. Currently she can only call roll, yell at students when they make too much noise, and lecture directly from the book-making her already as capable as many of America's worst teachers.

Watch out, teacher union bosses—robots are coming to take the jobs of your dues-paying members!

Judgment Day—when we can effectively determine if robots will be effective teachers—may still be many years away. But we can be certain that teacher unions will work hard to keep robots from becoming certified. After all, certification requirements are there largely to keep out many qualified individuals and have the unintended consequence of excluding minorities.

Clark County irritated by the LVRDA

The Las Vegas Redevelopment Agency (LVRDA) is trying to create a tourism improvement district within the city’s redevelopment zone.That would allow the LVRDA to issue sales tax anticipated revenue (STAR) bonds in order to provide corporate welfare subsidies to private developers.

The bonds would be paid back by diverting 75 percent of sales taxes within the tourism improvement district away from other state and local government coffers. It would effectively allow city officials to appropriate money that would otherwise go to the county, the school district, the police department, the fire department and the state and use that money to provide “incentives” to their friends in real estate development. At a time when state and local governments are facing serious fiscal difficulties, the use of STAR bonds by the LVRDA would be particularly egregious.

The LVRDA already uses tax-increment financing to siphon property taxes away from other governmental services. Use of STAR bonding would simply give the LVRDA another funding source to build things like mob museums and palatial new city halls and to give handouts to private developers – all while depriving legitimate government services of financial support.

Clark County officials have now taken notice of the fact that the LVRDA is sticking it to them. They have recently criticized the LVRDA for depriving county government of tax revenue. Clark County Commissioner Chris Giunchigliani has accused the LVRDA of trying to “double-dip” by trying to take sales taxes as well as property taxes. Hmmm, sounds familiar.

Commissioner Giunchigliani has further acknowledged that if the projects the LVRDA wishes to fund were truly worthwhile, “then the developer would build it without these incentives.” Apparently, she thinks that the LVRDA’s subsidies simply amount to corporate welfare. Hmmm, that sounds familiar, too.

Perhaps if more state and local policymakers took note of the way in which tax dollars are being wasted in Nevada, they wouldn’t claim to need additional revenues.

Assemblywoman Koivisto: Please close the schools that fail to educate children

At a recent legislative hearing, a witness remarked that Nevada should cut taxes and spending. A sound solution, considering there are few, if any, examples in history where cutting taxes and government spending actually hurt the economy.

Assemblywoman Ellen Koivisto (D, Clark County 14), however, responded briskly. She asked, "Which elementary, middle and high schools we should close because we have no money to keep them open?"


First, Nevada has plenty of money. The governor's proposed budget will spend approximately $9 billion in a single year—about $3 billion will come from the General Fund. As has often been pointed out, the true situation facing the state only concerned a 1 percent decrease in spending (now a 5 percent increase in spending, "thanks" to a federal stimulus). The real question isn't how much we spend, but how efficiently we spend it. Unfortunately, many politicians want to increase taxes without ever answering that question.

But to answer Koivisto's question, of which schools to close, the answer is simple: Close the poorly performing schools. They aren't helping students.

When businesses fail to satisfy customers, those customers don't return. Either a company will figure out how to attract and keep customers—or it will go out of business. Public schools, on the other hand, are not held accountable for their results, since most parents have no choice regarding where or how their child is educated. Schools that fail face no threat of closing, because their funding is not tied to satisfying parents or actually educating students.

Nevada can remedy this error by offering each student in a failing school a scholarship to attend the school of his or her choice—whether private or public. If a school's attendance rate drops significantly because students have chosen to leave the school, then that public school should be closed. Like businesses that can't convince customers to shop in their stores are closed, so should schools that cannot convince parents that they can educate children.

Below is a list of Nevada schools that have been listed as "In Need of Improvement" for three or more years. A school that has been so designated for three or more years has failed to make "Adequately Yearly Progress" for at least four years. "Needs Improvement" is the nice way of saying: "You've failed to teach your students adequately."

Simply giving schools a verbal designation does little to spur achievement or innovation. But when faced with competition-as when students in failing schools are offered scholarships to attend private schools-traditional public schools are forced to reform and actually start educating their children. Some of such schools will be forced to close, but most will figure out ways to raise their game significantly and teach their students.

Again: Schools that fail to teach students should be closed. Assemblywoman Koivisto, here is the list of schools you asked for-those that could be shut down:

Carson City

Empire Elementary School
Carson Middle School

Churchill County

Churchill County High School

Clark County

Adams Elementary School
Carson Elementary School
Cozine Elementary School
Craig Elementary School
Cunningham Elementary School
Elizondo Elementary School
Fitzgerald Elementary School
Fong Elementary School
Harris Elementary School
Herr Elementary School
Herron Elementary School
Hollingsworth Elementary School
Lake Elementary School
Long Elementary School
Manch Elementary School
McCaw Elementary School
McWilliams Elementary School
Pittman Elementary School
Priest Elementary School
Reed Elementary School
Ronnow Edison Elementary School
Rundle Elementary School
Stanford Elementary School
Tate Elementary School
Robert Taylor Elementary School
Warren Elementary School
Watson Elementary School
Wengert Elementary School
Tom Williams Elementary School
Wooley Elementary School
Wynn Elementary School
Bridger Middle School
Brinley Middle School
Brown Jr. High School
Cashman Middle School
Cortney Jr. High School
Cram Middle School
Fremont Middle School
Garside Jr. High School
Gibson Middle School
Harney Middle School
Johnson Jr. High
Keller Middle School
Knudson Middle School
Lied Middle School
Monaco Middle School
O Callaghan Middle School
Robison Middle School
Sawyer Middle School
Sedway Middle School
Swainston Middle School
Von Tobel Middle School
Washington Continuation Jr. High School
West Preparatory Academy Middle School
White Middle School
Woodbury Middle School
Clark High School
Academy for Individualized Study
Basic High School
Bonanza High School
Burk Horizon Southwest High School
Chaparral High School
Cheyenne High School
Cowan Behavioral Jr. Sr. High School
Del Sol High School
Desert Pines High School
Durango High School
Eldorado High School
Las Vegas High School
Mojave High School
Palo Verde High School
Rancho High School
Silverado High School
Summit View Junior/Senior High School
Valley High School
Western High School

Elko County

Northside Elementary School
Southside Elementary School
West Wendover Elementary School
Owyhee Jr. High School

Nye County

Rosemary Clarke Middle School

Washoe County

Libby C. Booth Elementary School
Rita Cannan Elementary School
Katherine Dunn Elementary School
Lemmon Valley Elementary School
Virginia Palmer Elementary School
Silver Lake Elementary School
Smithridge Elementary School
Sun Valley Elementary School
Veterans Memorial Elementary School
William O Brien Middle School
Fred W. Traner Middle School
Washoe Middle School
North Valleys High School
Sparks High School
Washoe High School

Death tax deception

Dick Patten, president of the American Family Business Institute and occasional NPRI writer, has a new piece out for Human Events in which he takes President Obama to task for his skullduggery over the death tax.

Writes Patten:

Footnotes are generally used to disclose sources or to explain an obscure fact. They are not used to recommend massive tax policy changes. Yet this is just what Obama does in his Fiscal Year 2009 Budget Proposal.

Slog through the budget to page 127, and see footnote 1, which states, "[T]he estate tax is maintained at its 2009 parameters." What does this mean?

Under current law enacted by the Bush tax relief of 2001, the death tax is scheduled to be repealed for one year in 2010. Due to complex Senate budget reconciliation rules, the tax then comes back at the rate of 55% in 2011. Obama's footnote assumes that Congress will cancel the temporary repeal and make the death tax permanent at the rate of 45%.

President Bush and most of the Republicans have been fighting to make repeal permanent for the last eight years. This change would render all those efforts asunder.

That's a pretty significant policy proposal. Why is Obama hiding it deep in his budget in a footnote? Is there a reason to be so secretive?

Oh, right. Obama has probably heard that taxes which punish people for saving and investing don't help the economy.

The whole piece, as with just about all of Patten's work, is worth checking out.

Education experts break down Obama’s speech

Dr. Jay P. Greene and Dr. Matthew Ladner, two education experts blogging on www.jaypgreene.com, applaud Obama for his speech on education, but hope he backs up the rhetoric with action and real reform.

Dr. Matthew Ladner (vice president of research at the Goldwater Institute and policy fellow at the Nevada Policy Research Institute) critiques and criticizes President Obama's idea that everyone should attend college. Ladner notes that fewer than 30 percent of all jobs in 2004 even required a college degree.

Meanwhile, Dr. Jay P. Greene (University of Arkansas) criticizes President Obama's speech, noting he emphasized great ideas, like merit pay for teachers, but argues that Obama's speech doesn't reflect his legislative agenda. Dr. Greene wonders why, if charter schools and merit pay for teachers are so important, does Obama's legislative agenda push more spending on school construction and more funding for Head Start—both of which generate no long-term gains in student achievement.

Of course, Obama also made no mention of the attempt by Congress to kill the D.C. voucher program, which offers scholarships to low-income students to attend private schools of their parents' choice.

Having his cake and eating it too

Governor Gibbons created a budget that included a $292 million tax increase in the form of a room tax hike in Clark and Washoe counties. The value of that tax has since been downgraded to $233 million. However, the governor, after including the tax hike in his budget will now refuse to sign the bill implementing the tax hike. By not signing it within 5 days, he will allow the bill to go into effect automatically.

According to the governor’s communications director, "It would violate his principles by signing a tax increase. He won't veto it. He will abide by the decision of the people."

So why did he build a budget that would rely on the tax hike?

The governor appears to be playing games with the voters of Nevada, who put him in office in large part due to his pledge to not raise taxes. It’s easy to talk about no tax increases when coffers are flush, but perhaps less so when resources are limited and the governor’s office is forced to set priorities and make tough decisions.

For now, it looks like the governor wants to have his cake and eat it too.

Big spenders, poor performance

Despite being big spenders, UNR and UNLV perform poorly when it comes to graduating their students.

The University of Nevada, Reno has the 25th highest instructional spending per full-time student in the U.S., according to the database of the Education Trust. Nevertheless, when UNR is compared on rates of graduation within six years, the school ranks just 211th.

The University of Nevada, Las Vegas faces a similar discrepancy. Ranked 190th out of 506 schools in instruction spending per full-time student, UNLV ranks 327th for six-year graduation rates.

UNLV's instructional spending per full time student is $526 above the national median, but graduation rates are 5.8 percentage points below. In fact, 316 public colleges and universities in the Education Trust database spend less on instruction than UNLV, yet UNLV can only beat 176 of them on six-year graduation rates.

While UNR's graduation rate is 2.8 percentage points above the median, the school spends considerably more than most universities on instruction, at $5,747 per student above the median. That difference, totaled, exceeds the entire instructional spending levels of 262 public colleges and universities! To put it another way, UNR spends twice as much per student on instruction as do 77.4 percent of such schools (about 392).

This raises the question: What on earth are they doing with that money?

Underfunded? Hardly. Underperforming? Most certainly. Don't believe this report? Check The Education Trust database yourself at http://www.collegeresults.org/search_basic.aspx.

Click here to see NPRI's higher education graduation rankings.

Rothbard on Bush, Obama

I’ve been reading Murray Rothbard’s America’s Great Depression recently to see what kind of insights into the current recession might be gleaned, given all of the noteworthy similarities. As he lays the theoretical underpinning of his argument, he offers the following passage, which I thought was pretty telling:

If, in fact, we list logically the various ways that government could hamper market adjustment, we will find that we have precisely listed the favorite "anti-depression" arsenal of government policy. Thus, here are the ways the adjustment process can be hobbled:

1. Prevent or delay liquidation. Lend money to shaky businesses, call on banks to lend further, etc.

2. Inflate further. Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments, which, in their turn, will have to be liquidated in some later depression. A government "easy money" policy prevents the market's return to the necessary higher interest rates.

3. Keep wage rates up. Artificial maintenance of wage rates in a depression insures permanent mass unemployment. Furthermore, in a deflation, when prices are falling, keeping the same rate of money wages means that real wage rates have been pushed higher. In the face of falling business demand, this greatly aggravates the unemployment problem.

4. Keep prices up. Keeping prices above their free-market levels will create unsalable surpluses, and prevent a return to prosperity.

5. Stimulate consumption and discourage saving. We have seen that more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved-capital even further. Government can encourage consumption by "food stamp plans" and relief payments. It can discourage savings and investment by higher taxes, particularly on the wealthy and on corporations and estates. As a matter of fact, any increase of taxes and government spending will discourage saving and investment and stimulate consumption, since government spending is all consumption. Some of the private funds would have been saved and invested; all of the government funds are consumed.[15] Any increase in the relative size of government in the economy, therefore, shifts the societal consumption-investment ratio in favor of consumption, and prolongs the depression.

6. Subsidize unemployment. Any subsidization of unemployment (via unemployment "insurance," relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.

In highlighting these policies, Rothbard is pointing specifically to the 1929-1933 period of the Great Depression and criticizing the interventionist policies of the Hoover Administration. These ill-advised polices were subsequently expanded on by the Roosevelt Administration, causing the Depression to drag on for the remainder of the decade.

One would do well to note the similarities to the current recession as many of these interventionist policies were actively pursued by the Bush Administration and are now being expanded upon by the Obama Administration. In fact, the only policies highlighted here that have not, as yet, been implemented on a large scale are price and wage controls. Hence, we should perhaps all be on the lookout for these anti-recovery policies to rear their head in the near future.

Answering Assemblywoman Ellen Koivisto's question

She asks, and NPRI answers.

But after hearing another witness call for spending cuts, not tax increases, an irritated Assemblywoman Ellen Koivisto, D-Las Vegas, asked:

"What elementary schools do you want us to close? What middle schools, what high schools should we close because there is no money?"

Actually, there is lots of money for education.Aside from the waste NPRI has reported on here, here and here, inflation-adjusted, education spending per student has tripled in the last 50 years.

Educational acheivement? Not so much. Over 40 percent of fourth graders can't read at grade level. Less than 60 percent of students graduated in 2004.

But back to Assemblywoman Koivisto's question.

What elementary schools do you want us to close? What middle schools, what high schools should we close?

Close the schools that have failed to educate Nevada's children. Fire the teachers who harm Nevada's children by failing to educate them. Get rid of the administrators who keep too much money out of the classroom.

You ask, Assemblywoman Koivisto, and we are happy to answer. You don't want to allow schools, teachers and administrators who are failing our children to continue to harm them, do you?

"But how," Assebmlywoman Koivisto might ask in response, "am I or is any politician supposed to know who the bad teachers are, which administrators harm the educational future of Nevada's children, which schools should be shut down and which schools should be expanded?"

Exactly. You, any lawmaker, or any education bureaucrat can never know those things. But parents can. That is why it makes no sense for politicians like Assemblywoman Ellen Koivisto to control the educational funding in this state. Forty percent of our kids can't read, but she doesn't know which schools to shut down or what schools to expand.

If parents were given a scholarship of $8,500 (the state currently pays over $10,000 a year for each child's education) and allowed to use that money at any school in Nevada (or for virtual schools or homeschooling) then Koivisto's problem would be solved. All parents would decide where to send their children. If the school were doing a good job, it would be rewarded with students and the funding they provided. If a school were not doing a good job, parents could take their children elsewhere. Those schools could be closed.

NPRI has a detailed analysis of this plan here.

Nevada's Bait & Switch

William P. Ruger & Jason Sorens at the Mercatus Center at George Mason University have just published "Freedom in the 50 States: An Index of Personal and Economic Freedom." It analyzes and ranks all 50 U.S. states on a variety of economic, social, and personal variables. Of the Silver State, it says:

Nevada has a reputation as a “libertarian state,” mostly because of legal prostitution and gambling, but perception does not meet reality. Nevada scores a disappointing 32nd place on personal freedom and 24th overall. On fiscal policy the state is overall about average. However, the state is about two standard deviations better than average on fiscal decentralization, one standard deviation better than average on government employment, and more than two standard deviations worse than average on government employee wages (they make 18 percent more than private industry). Gun and alcohol laws are fairly relaxed, and marijuana laws are better than average, except for the possibility of life imprisonment for a single conviction. The state falls down, however, in imposing the strictest private school regulations in the country: mandatory state approval of all schools, mandatory state licensure of all teachers, and detailed curriculum control. Home school laws are far less restrictive, but notification requirements are still somewhat onerous relative to other states. Additionally, the asset forfeiture regime is the worst in the country. The burden of proof is on the claimant, who must prove that the property was not used in a crime. Smoking bans are virtually complete in public places, restaurants, and workplaces (bars are exempted). Labor laws are relatively good, except for the prevailing wage law. Health insurance mandates are more than a standard deviation worse than average. As of 2006, Nevada had not reformed eminent domain, but they have since done so.

Surpise, surprise

Members of the Las Vegas City Council voted Wednesday to keep two ballot initiatives proposed by the Culinary Union off of the July ballot.

One of the ballot initiatives would have required a vote on any lease-purchase agreements the city entered into on behalf of its redevelopment agency. Because the proposed new $267 million city hall that would bear Mayor Oscar Goodman’s name would be constructed using a lease-purchase agreement, the measure would give voters a say in whether city officials should build themselves a new palace at $881 per square foot — while forcing new debt on taxpayers to do so.

The project has sparked controversy among local taxpayers and some union members because the city already will face a $150 million deficit over the next five years and has recently reduced benefits for some city workers. The new city hall would likely lead to tax increases during a recession.

The second ballot initiative would prevent the redevelopment agency from issuing new debt and would require voter approval for all future projects of the redevelopment agency. According to the city’s lawyer, the initiative is “legally defective” because it would take power away from the redevelopment agency. Imagine that.

City officials voted to keep an initiative that could potentially limit their power off of the ballot. Ironically, they voted to keep the electorate from voting. Can we say oligarchy?

As Chris Bohner, research director for the Culinary Union, observed, “"It's a sad day when elected officials are afraid of the voters."

Got despotism?

Parents want to be able to choose their child's school

Not just in Nevada, either.

Vermont citizens—by a large margin—want to be able to choose what school their child attends.

Nearly nine out of ten Vermonters (89 percent) prefer choosing a school for their child among options that include private schools, charter schools, virtual schools, and homeschooling. There is a consensus for a range of schooling options. This high figure is consistent with what we have learned from previous state surveys asking the same question, most recently in Oregon (87 percent), Montana (90 percent), Maryland (82 percent), and Oklahoma (83 percent)...

About half of Vermonters favor a tax-credit scholarship system. When asked if a proposal were to be made in Vermont to create a tax-credit scholarship system, 52 percent of respondents say they favor a scholarship system funded by individual and business charitable donations. The results indicate significantly more support for universal eligibility of tax-credit scholarships versus financial need-based scholarships. (58 percent vs. 43 percent, respectively) This is true regardless of respondents' income levels. For example, Vermonters with household incomes under $25,000 agreed with universal eligibility compared to financial need-based eligibility, 53 percent to 36 percent. (emphasis original)

A similar survey conducted by the Friedman Foundation for NPRI last year showed parents in Nevada feel the same way.

Only one out of ten Nevadans say a regular public school is the top choice for their child's school. Citizens want more school options. This finding is consistent across major demographic categories including age, race/ethnicity, gender, and geographic region-never rising above 16 percent for any one subgroup...

A majority of Nevadans (53 percent) favor allowing parents the option of using public funds to send their child to a private school. Favorability elevates to significantly higher levels for 36 to 45 year-olds (62 percent) and 46 to 55 year-olds (63 percent).

As for the results politicians probably care about the most:

Nevada voters are more likely to vote for a state representative, state senator or governor who supports school vouchers. Voters say they would be more likely to vote for a governor or legislator who supports school vouchers, with 35 percent saying "more likely" versus 25 percent saying "less likely."

Just a reminder: Nevada could implement a system of school choice that would allow parents to choose their child's school and save the state a billion over the next 10 years.

Gravity Check

By Patrick R. Gibbons

For the last several months, NRPI has been writing about the budget "crisis" and wondering exactly how a 1-3 percent decline in overall spending supposedly constitutes a crisis. (This commentary takes an in-depth look at that question.)

More than mere hyperbole and rhetoric are at work here. We're in this "crisis" because tax-consuming special interests regularly fight any efforts to control state or local spending, and the Nevada Legislature willingly goes along. Thus, in their most recent special session, lawmakers evaded the need to economize and instead used fund sweeps and accounting gimmicks to maintain expenditure levels. As it turns out, a records request to Budget Director Andrew Clinger's office reveals the state plans to spend some $3.8 billion from the general fund this fiscal year. That's $300 million more than budgeted and $1 billion more than projected revenue collections. Indeed, it appears that for the entire biennium Nevada will spend about $40 million more than was budgeted.

Basically, instead of scaling back spending in anticipation of a protracted economic recession with no recovery in sight, Nevada's government has been busily ramping up spending even more! This reveals the real engine behind crisis in Nevada: government itself.

Buildings don't teach kids

By Patrick R. Gibbons

Nevada spends over $10,000 per student in K-12 education, but policymakers and policy wonks don't want to talk about ALL the money we spend - in fact they want to ignore what we spend building and maintaining schools.

Nevada's capital outlays and construction costs per student are the 3rd highest in the country. We spend almost twice as much per pupil on building new schools than does the average state. Some say we have to spend so much because we grow so fast. But look at Arizona, the second fastest growing state in the country, they spend considerably less than we do.

Something has gone terribly wrong in Nevada. If Nevada was as efficient as Arizona, we'd save between $320 and $350 million a year on capital outlays. That money could go back to taxpayers or back to the classroom.

Since buildings don't teach kids, why are we spending so much on them?

We should all be so lucky

This recent article in the Reno Gazette-Journal details how Reno City Manager Charles McNeely is the highest paid city manager in Nevada. Among other things, his contract allows him to take up to 79 days of paid time off per year. That’s four months. McNeely is quoted as saying, “I have never been able to use it all.”

It must be nice to have so much time off that you can’t even get around to using all of it. Interestingly, City Councilwoman Jessica Sferrazza is quoted in the article as saying, “We work him to death.” Really?

NSHE needs to focus on results, not funding

As mentioned before, funding for the Nevada System of Higher Education has grown considerably faster than inflation. But has NSHE seen a comparably strong rise in student population, reducing state funding per student? Some people still feel government should maintain, or even increase, its per-resident or per-pupil funding, regardless of any possibilities of taking advantage of cost-saving ideas.

The reality is that Nevada's universities should be 21^st Century capable by now. Meaning: They should be able to take advantage of technology like the virtual classroom that allows them to drastically reduce the cost of educating students. The Virginia Tech Math Department, for example, uses computer modules to instruct students—creating cost savings of up to 75 percent for lower-level math courses.

The following graph looks at NSHE appropriations from the total budget and the general fund (adjusted for inflation to 2008 dollars) and compares them to the Full Time Student Equivalent (FTE). For the 2008-09 school year, we assumed that no students dropped out of college for the spring semester statewide—an assumption that artificially boosts average student FTE for the 2008-09 school year. The result is a rise in per student funding since 2001.

*Source: Nevada System of Higher Education. Figures are adjusted for inflation.

This rapid increase in NSHE appropriations has made the proposed budget cuts appear larger than they really are. Despite the pain, the Nevada System of Higher Education is likely to be no worse off than it was during the last recession—a situation that many businesses in Nevada would envy.

Notwithstanding the increases in per-student funding, NSHE graduation rates have remained dismally poor, with fewer than 50 percent of Nevada students graduating within six years.

Since more spending has not improved graduation rates, Nevada's policymakers need to reexamine the state investment in higher education. The current economic recession provides a great opportunity for policymakers to develop creative and innovative solutions to solve the state's problems. Will they?