NPRI analyst: As tax-study scheme crumbles, lawmakers should consider ‘One Sound State’
LAS VEGAS — A fiscal policy analyst with the Nevada Policy Research Institute said today that the Interim Finance Committee’s partial cancellation of its contract with Moody’s Analytics, which the IFC hired to study the state’s tax structure, means that the legislature is now essentially paying for a spending wish list from the Nevada Vision Stakeholder Group with no plan for determining how to pay for it.
“From the beginning, the legislature’s agenda has been clear: spend tax dollars to create a wish list of government spending and use that wish list to justify massive tax increases during the 2011 Legislative Session,” said Geoffrey Lawrence, the NPRI analyst. “Now the Interim Finance Committee has decided just to let the Nevada Vision Stakeholder Group develop five-, 10- and 20-year spending goals without any concern for how to pay for them.”
The Nevada Vision Stakeholder Group is comprised mainly of government officials, union members and others who profit from government largesse. The group is scheduled to complete its “quality of life” report by September 15, 2010.
“This new scenario must be a dream-come-true for leftist politicians,” said Lawrence. “Just in time for the 2010 elections, it allows them to make grand promises about achieving ‘quality-of-life’ goals without requiring any actual proposals for how to fund them. Just as they did in 2009, those politicians, once in office, will likely propose massive new tax increases that will only exacerbate Nevada’s boom-and-bust spending cycle.”
Lawrence noted that Senate Majority Leader Steven Horsford has already signaled his support for a corporate income tax, which is not only the most volatile of all major tax instruments available to state governments, but would also transfer wealth from Nevada’s successful job creators to a group that failed even to complete a study about how to raise taxes.
“If the legislature and the IFC can’t even complete a tax study, then why should citizens trust them with more tax dollars?” said Lawrence.
“Fortunately, there is a tax study that has been completed, and it didn’t cost Nevada taxpayers a dime,” continued Lawrence, in reference to the “One Sound State, Once Again” tax study he authored for NPRI earlier this year. “The NPRI study offers a series of revenue-neutral recommendations that would broaden, stabilize and simplify Nevada’s tax structure and smooth out Nevada’s boom-and-bust spending cycles.”
With news breaking yesterday that Nevada's on-again, off-again tax study is on again, it has never been more important for Nevada's voters, candidates and elected officials to understand and pay attention to the debate over taxes in Nevada.
While the legislature's tax study is likely to call for a substantial increase in taxes and the creation of a corporate income tax, there is a better way. NPRI fiscal policy analyst Geoffrey Lawrence has written an alternative tax study called "One Sound State, Once Again." Its revenue-neutral recommendations to broaden and stabilize Nevada's tax base include broadening and lowering the sales tax, eliminating the modified business and insurance taxes and instituting tax and spending control to stop Nevada's boom-and-bust spending cycles.
Bell, Calif., City Manager Robert Rizzo started his job at $72,000 a year, and thanks to 12 percent increases per year, saw his salary rise to nearly $800,000. He will retire with a pension of $650,000 per year - highest in California state history. His assistant made $376,000 a year. Bell's sheriff made $457,000 per year - and oversaw a mere 33 police officers (and his force is under investigation for voter fraud).
It isn't uncommon for government workers to be overpaid and underworked, but it also appears to be less common for government workers to game the system to maximize their pensions. Rizzo just scammed the system better than anyone in California history.
I've always said the Mob didn't get arrested, they just got elected. Nevada better do something fast, before we end up like our left-coast neighbor.
Update, July 29: The Las Vegas Sunis reporting that the tax study is half dead. The portion of the tax study analyzing the state's revenue structure will not be completed, but the portion where special interests create a dream lists of projects (the Nevada Vision Stakeholder Group) will live on and present their final report by September 15.
It's alive!
Last week the Nevada News Bureau reported that the Legislative Counsel Bureau had sent Moody's Analytics, the firm hired by the Interim Finance Committee to perform Nevada's tax study, a notice of default. The notice said Moody's had 10 days to produce the report or the contract would be terminated.
But the NNB article noted that Lorne Malkiewich, director of the LCB, said an agreement could still be worked.
And the LCB has confirmed to me today that an agreement between the LCB and Moody's is currently being negotiated to complete the tax study on an extended timeline. Malkiewich told me that he expects the official announcement to come within the next day or two.
When I asked him if the revised timeline would be released at the same time a reworked contract was announced, he was noncommittal.
Bell, one of the poorest cities in Los Angeles County, pays its top officials some of the highest salaries in the nation, including nearly $800,000 annually for its city manager, according to documents reviewed by The Times.
In addition to the $787,637 salary of Chief Administrative Officer Robert Rizzo [...] Assistant City Manager Angela Spaccia makes $376,288 annually, more than most city managers.
[...]
The district attorney is investigating Bell over the hefty compensation of its City Council members -- about $100,000 a year for part-time positions. Normally, council members in a city the size of Bell would be paid about $400 a month, Demerjian said. (Emphasis mine)
The city manager, mayor and council members all initially defended their exorbitant salaries, claiming they were just being reasonably compensated for efficiently running their city.
City Council members in Bell unanimously agreed Monday to give up their controversial $96,000-a-year salaries and instead draw $673 a month — a 90% decrease.
What instigated these salary cuts and sudden change of heart in the city's politicians? Salary information obtained under the California Public Records Act.
This is just another example of why public record laws are necessary to ensure that local governments are run honestly. Without information empowering the public, these officials would have continued to draw exorbitant salaries.
Teacher unions support teaching evolution, unless attacking evolution helps them politically. Ah yes, abandoning science and education for political practicality – smell the hypocrisy?
According to FactCheck.org, "the teachers’ PAC gave $1.5 million to 10 PACs, which in turn gave nearly $1 million to True Republican PAC. Joe Cottle, a lobbyist for the teachers’ group, is the treasurer of five of the PACs, and Rudy Davidson, a former education lobbyist and a contributor to A VOTE, was treasurer of four others. Such PAC-to-PAC contributions are legal. Cottle told us they are necessary in cases when a candidate or group doesn’t want to be publicly associated with AEA — which is unpopular in some circles, particularly in a Republican primary — but wants its money, or when the AEA wants to help moderate Republicans."
After the money was laundered through teacher union front groups, it was used to attack Byrne with political ads stating that Byrne supports teaching evolution, something the teacher union also supports. Now that’s hypocrisy.
After peaking at Nevada's lengthy application I can tell you I'm not really all that surprised, but, Nevada is not a finalist for the remaining $3.4 billion in the Race to the Top grant. Nevada acted like NCLB required policies were amazing reforms to help turn around struggling schools and didn't provide much else in the way of reform. It also didn't help that Nevada has a dismal education history.
Now the real question is whether or not the state legislature will be motivated to push through education reform, despite not being able to win the money.
Yes, Nevada should grade public school teachers using value-added assessment. Yes we should expand charter and empowerment schools. However, we probably shouldn't adopt the common core standards, on principle, but we should look toward strengthening our education standards.
Correction: fixed spelling mistake that resulted in a pun...
Let’s assume that a third of the world’s population really believes mankind has the power to adjust the Earth’s thermostat through lifestyle decisions …
Now, if those True Believers would give up their cars and big homes and truly change the way they live, I can’t imagine that there wouldn’t be some measurable impact on the Earth in just a few short years. I’m not talking about recycling Evian bottles, but truly simplifying their lives. Even if you were, say, a former Vice President, you would give up extra homes and jets and limos. I see communes with organic farms and lives freed from polluting technology.
Then, when the rest of us saw the results of their actions—you know, the earth cooling, oceans lowering, polar bears frolicking and glaciers growing—we would see the error of our ways and join the crusade voluntarily and enthusiastically.
The Brookings Institution has an idea to save Las Vegas: increase exports. OK, but how? This is kind of like telling retailers that the secret to making money is to sell more stuff. Thanks, Captain Obvious.
The Las Vegas Review-Journal article mentions that the Brookings Institution and the University of Nevada, Reno are offering a business course (for 600 dollars) to help people improve their ability to export goods globally. International trade is rife with tariffs, quotas and other protectionist measures that stifle trade, destroy wealth and harm consumers. So a course on how to navigate the pitfalls of international trade is helpful, but not the best solution to rebuilding Nevada’s economy.
Here’s a better idea: free trade zones. The United States has hundreds of free trade zones which range in size from hot dog stands to a few city blocks. These, however, only benefit a handful of people. Embarrassingly, China – a communist dictatorship – has 15 free trade zones and a dozen special economic zones each inhabited by millions of Chinese people. These economic zones feature lower taxes and fewer regulations and are driven by the invisible hand of market forces (rather than the very visible backhand of big government). They make up just a fraction of the land mass and population of China, but the bulk of the nation’s economic growth.
So how would it work? All goods imported into the free trade zone would enter duty free. Everything. Zero percent tariffs. Nada.
Not only would this provide a major tax cut to consumers and visitors to Nevada, but industry in the Silver State would be able to produce goods and ship them abroad (or even to the rest of the U.S.) at a lower cost and thus a more competitive price. In Nevada, consumers and producers would win – unlike under most government policies, where a handful of powerful and well-connected special interests win at the expense of consumers and taxpayers alike.
Those already outraged by the president's health care legislation now have a new bone of contention -- a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny. …
Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.
Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.
This provision, intended to mine what the IRS deems a vast reservoir of uncollected income tax, was included in the health care legislation ostensibly as a way to pay for it. The tax code tweak is expected to raise $17 billion over the next 10 years, according to the Joint Committee on Taxation.
A firm hired by the Nevada Legislature to produce a report on the state’s revenue structure has been sent a notice of default for failing to turn in the document by a July 1 deadline.
Lorne Malkiewich, director of the Legislative Counsel Bureau, said the notice was sent Wednesday to Moody’s Analytics, the contractor hired to perform the study. The company has 10 days to respond by producing the final report or the contract will be terminated, he said.
Malkiewich said an effort was made to negotiate an extension with the West Chester, Penn., based firm without success.
Wow. Only note of caution is this line.
Malkiewich said an arrangement may still be worked out with Moody’s.
Assuming this isn't just a power play by the LCB to get Moody's to delay the report until after the election for no additional compensation, this is big news.
*Most Americans view unions unfavorably, but because the American public respects and admires the teaching profession, the teacher unions have become adept at drawing on this positive sentiment to appear more friendly and less self-interested.
Wearing pastels doesn't make Darth Vador any less evil and talking about "the children" doesn't make unions any less self-interested.
Not only do the teacher unions have more power and influence than the largest corporations on earth, but they protect bad teachers in the classrooms and block meaningful reforms that benefit students. Bad teachers pay dues and, well, education reforms decentralize power and reduce union influence.
Read the Education Next article titled "Invisible Ink in Teacher Contracts" to learn more about the power and influence of the teacher unions.
Thanks to the economic downturn, Social Security is running a temporary cash-flow deficit today. That deficit will turn permanent in just six years. Of course, in theory, the Social Security Trust Fund will pay benefits until 2037. That's not much comfort to today's 35-year-olds, who have faithfully paid into the program their entire working lives but will face an automatic 27 percent cut in benefits unless the program is reformed before they retire.
But even that figure is misleading, because the Trust Fund contains no actual assets. The government bonds it holds are simply a form of IOU, a measure of how much money the government owes the system. It says nothing about where the government will get the money to pay back those IOUs.
Even if Congress can find a way to redeem the bonds, the Trust Fund surplus will be completely exhausted by 2037. At that point, Social Security will have to rely solely on revenue from the payroll tax — and that won't be sufficient to pay all promised benefits. Overall, the amount the system has promised beyond what it can actually pay now totals $15.8 trillion.
Moreover, Social Security taxes are already so high, relative to benefits, that Social Security has simply become a bad deal for younger workers, providing a low, below-market rate of return. Many young workers will end up paying more in taxes than they receive in benefits. They will actually lose money under the program.
And contrary to widespread belief, workers do not actually own their Social Security benefits. They are left totally dependent on the goodwill of the 535 politicians in Congress to determine what they'll receive in retirement. Benefits are not inheritable, and the program is a barrier to wealth accumulation. The program unfairly penalizes African Americans, working women, and others. In short, it is a program crying out for reform.
From 1976 until the start of the Great Recession in December 2007, Nevada's unemployment rate was, on average, 0.1 points lower than the national average. Over the last two and a half years, however, unemployment has climbed dramatically in Nevada, even setting a record for the BLS monthly state unemployment series. What happened?
Clearly the housing bubble played a large role. Nevada, like California, Florida and Arizona, enjoyed a massive housing and construction boom that collapsed like a house of cards. But that isn't all. The drop in tourists' disposable income is also hurting the Silver State. However, the overlooked culprit is probably the Nevada Legislature. Nevada's legislature implemented two of the state's largest tax hikes in state history within one single decade.
Taking money from wealth-producing sectors of the economy to prop up wealth-consuming sectors (like the government) is very likely lengthening the economic troubles in Nevada.
For months, lawmakers, political candidates and the public have awaited the first report of the Nevada Vision Stakeholder Group and the firm hired by select legislators for an associated tax study.
However, the report — contractually due July 1 — is nowhere to be found. …
Predictably, political candidates are already hiding behind the not-yet-delivered NVSG/Moody's recommendations for higher taxes in order to avoid revealing their own stance on the higher-taxes issue. Most notably, gubernatorial candidate Rory Reid has said he is waiting on those recommendations before taking a position.
Now, in an interesting twist, the initial report by Moody's has been delayed indefinitely. Legislative staffers say the contract — which set July 1, 2010 for the initial report's delivery — is being amended to reflect this delay. However, they are mum on any new timetable, while news reports say the report's publication may be delayed until after the November elections. Clearly that would mean higher-tax proponents don't want to level with Nevada voters.
July 1 has passed with neither a strategy for improving quality-of-life indicators nor a completed tax analysis. In fact, legislative staff is renegotiating a contract with the firm that was hired, Moody’s Analytics, and a divided Vision Stakeholders Committee is at a standstill. …
Legislative Counsel Bureau Director Lorne Malkiewich said last week it’s unlikely both the committee report and tax analysis will be done before the Nov. 2 election. His staff is negotiating a contract extension he hopes won’t cost the state more money.
The deadline for the report and the study would be staggered, and could stretch past November.
Ah yes, only in government would you pay more for a late product. And why is this delay politically helpful for those who want to take more of your money next year?
This delay could provide political cover for candidates, particularly state Senate candidates backed by the Senate Democrats. Had the study come out with recommendations for a broad-based tax increase, those candidates would be forced to take a position. That could be incendiary in a year Democrats are desperately trying to hold on to their slim majority in the Senate.
Legislators who lie to or mislead voters about their intention to raise taxes should be ashamed of themselves and taken to task by the voters. As Brian Greenspun says, "From that I learned politicians who have only a seat to lose — no bodily injury at risk — can and should be equally candid with the voters." Coming tomorrow: why liberal legislators likely orchestrated this delay — choosing their political advantage over leveling with the public on their plans to try and raise taxes in 2011.
It matters because genuine alternative teacher certification puts better teachers into the classroom, and as many studies have shown, teacher quality is the most important school-based factor in student achievement.
Ira Madnikoff seemed to be just the kind of social studies teacher the Clark County School District was eager to hire. He came from Florida with four years’ experience and a strong track record, and he had a law degree to boot.
But when Madnikoff went to the Nevada Education Department’s Las Vegas office in 2007 to see about getting a teaching license, he was in for a shock — in the eyes of the Silver State, he wasn’t qualified. The Clark County principals who had expressed interest in bringing him on board were out of luck. …
Until recently, Nevada has not offered reciprocity to teachers who went through alternative licensing programs in other states on the grounds that the expedited process didn’t meet Nevada’s standards.
That’s where Madnikoff ran into trouble.
In Florida, Madnikoff’s bachelor’s degree in criminal justice, completing additional education classes and passing the required competency exams were enough to satisfy that state’s alternative licensing requirements. In Nevada, however, his college classes apparently didn’t qualify him to teach social studies to grades six through 12. His law degree won him no extra credit. And Madnikoff said he never got a straight answer as to what classes would help him make up the deficit.
His law degree, and his experience teaching high school honors and Advanced Placement classes, were considered a plus by the private school, which has allowed him to develop advanced curriculum to challenge his students.
New numbers from the state Department of Employment, Training & Rehabilitation show unemployment of 14.2 percent statewide in June, up from 14.1 percent in May. Joblessness in Las Vegas surged to 14.5 percent, up from 14.1 percent in May.
Nationally, unemployment fell from 9.7 percent to 9.5 percent from May to June, though economists credited much of that drop to discouraged workers giving up the hunt for jobs. …
All other states' jobless data won't be out until Tuesday, so it's not clear whether the Silver State will retain the No. 1 ranking it grabbed from Michigan in May. But Michigan officials have already announced that the Great Lakes State posted a jobless rate in June of 13.2 percent, down from 13.6 percent in May.
That title sounds like hyperbole, doesn't it? And I would agree, except that that's exactly how Brian Greenspun framed his column in Sunday's Las Vegas Sun.
I no longer feel sorry for good and decent politicians who honestly believe that they must “shade the truth” or, in the vernacular, tell a lie when asked by their constituents whether they, like those who run against them, will promise the voters something for nothing.
There is no question that the voters are in the kind of mood today that demands politicians adhere to the “no new tax” pledge that seems to be the litmus test for any elected office. Voters, for good reason after years of seeing bloated government and ever-decreasing services, have resorted to a black-and-white process when it comes to their votes.
If you favor increasing taxes, you are out. If you pledge to hold the line or even reduce them, you are almost a shoo-in — practically with no other experience or prior qualifications needed.
And although I agree that no good government comes from attitudes like those I have described, I still don’t feel sorry for politicians who won’t come clean. They owe it to the voters to tell them the truth, even if it means defeat at the polls and results in really bad government for the people. I say this because I have taken a much greater risk to tell the truth to a voter. I have risked bodily harm — and I survived. So, if I can tell the truth, so should any politician who wants my vote. [Emphasis added]
“Bodily harm” sounds serious, doesn't it? I thought Brian was going to reveal that he talked politics while confronting an armed robber or preventing a carjacking. Nope. Instead, he talked to his … errr … personal rolfer while getting a massage. I'd give you the funny parts here, but for three things.
Second, I feel bad for Brian. Can you imagine publicly claiming you exhibited bravery for talking to your own (presumably contracted) employee and self-identified friend?
Third, I strongly agree with this part of Brian's conclusion — politicians "can and should be equally candid with the voters."
Right Pride calls on State Senate Majority Leader Steven Horsford to back up comments with actions Mark Ciavola, President “Given Senator Horsford’s newfound desire to protect Nevada business owners from oppressive taxation, Right Pride calls on Senator Horsford to sponsor and shepherd through a bill in the 2011 legislative session to repeal the modified business tax.”
(Las Vegas, NV) – Today, Right Pride called on State Senate Majority Leader Steven Horsford to back up comments he made at a Lambda Business & Professional Association luncheon on Wednesday concerning Nevada’s modified business tax. During an election forum, Sen. Horsford blamed Republicans for implementing the state’s tax in 2003, expressing opposition to it on the grounds that it taxes businesses regardless of their ability to pay. [Emphasis added] The tax was roughly doubled during the 2009 legislative session as part of the largest single-session tax increase in Nevada’s history, pushed through by Democrats including Horsford.
“We support Senator Horsford’s new position on the modified business tax,” said Mark Ciavola, president of Right Pride, Nevada’s only organization representing gay conservatives and their allies. “Continuing to target businesses with new taxes will stunt our economic recovery by preventing business owners from putting Nevadans back to work.”
Senator Horsford, speaking to an audience of gay and lesbian business owners, also denied that he sponsored a bill (SB 432) designed to ensure Nevada is prepared to implement a net profits tax, business transaction tax or any alternative business tax, which now sits in the Committee on Finance.
“Given Senator Horsford’s newfound desire to protect Nevada business owners from oppressive taxation, Right Pride calls on Senator Horsford to sponsor and shepherd through a bill in the 2011 legislative session to repeal the modified business tax,” Ciavola concluded.
I haven't been able to find the release on Right Pride's website, but if I do, I'll post a link. Also, I've contact Sen. Horsford for comment. I will post his response as soon as and if I get it.
This could be great news for taxpayers, because Sen. Horsford is exactly right that the modified business tax is terrible for businesses — it's essentially a payroll tax and it punishes business that seek to add workers or increase their pay.
Billy Raye, a 51-year-old unemployed bike courier, is looking for work.
Fortunately for him, the Mid-Atlantic Regional Council of Carpenters is seeking paid demonstrators to march and chant in its current picket line outside the McPherson Building, an office complex here where the council says work is being done with nonunion labor.
"For a lot of our members, it's really difficult to have them come out, either because of parking or something else," explains Vincente Garcia, a union representative who is supervising the picketing.
So instead, the union hires unemployed people at the minimum wage — $8.25 an hour — to walk picket lines. Mr. Raye says he's grateful for the work, even though he's not sure why he's doing it. "I could care less," he says. "I am being paid to march around and sound off."
My favorite part: The union paid the nonunion picketers minimum wage. Oh, and it gets better. Here's how the union tries to defend itself.
The union's Mr. Garcia sees no conflict in a union that insists on union labor hiring nonunion people to protest the hiring of nonunion labor.
He says the pickets are not only about "union issues" but also about fair wages and benefits for American workers. By hiring the unemployed, "we are also giving back to the community a bit," he says.
So this union thinks that the minimum wage is a fair wage? Good to know.
I think a principled union should pay its union employees to protest the first union hiring nonunion employees. Any nominations for a principled union? Bueller? Bueller?
Organisers of next month's Aviva London Grand Prix at Crystal Palace had hoped to stage the first 100 metres head-to-head of the season between Bolt, Tyson Gay and Asafa Powell but the triple Olympic champion is set to shun the meeting because it would expose him to a huge tax bill.
Unless the tax rules are relaxed, athletics administrators fear British fans will be denied the chance to see the sport's biggest star in action again until he returns to the capital in two years' time to defend his Olympic titles.
"I wouldn't be optimistic about seeing Bolt compete on British soil this year and there is a strong chance he won't be back until 2012," said an insider close to the negotiations with the Jamaican.
Since April, foreign sports stars competing in Britain are liable for a top rate of income tax of 50 per cent but, controversially, the tax is charged not just on the money they earn in Britain but on a proportion of their worldwide sponsorship income.
Premiums for certain types of health insurance have started to escalate more rapidly than in recent years even though very few parts of the new federal health care law have gone into effect.
While some industry observers say it's too early to predict how broad the impact will be, others fear that the rate hikes hint how the Patient Protection and Affordable Care Act will rearrange the insurance market. …
But local brokers report instances of small groups or individual coverages where premiums have risen in percentages from the mid-teens to the mid-20s, double or more than the average in recent years.
"We are seeing rate increases right now," independent broker Larry Harrison said. "I think there's definitely going to be more increases because of the mandates."
Independent broker Dwight Mazzone said some of his clients were hit with premiums for family coverage topping $1,000 per month, but were able to reduce it to about $800 by soliciting other quotes.
He is advising his clients to budget for 15 percent to 20 percent premium increases.
It's costing a bundle for local power utility NV Energy to comply with a state law that requires it to buy green energy.
New filings from the company show that it plans to pay 8.6 cents to 13.5 cents per kilowatt hour to buy electricity from seven renewable-power projects included in the 20-year integrated-resource proposal it has pending before the Public Utilities Commission of Nevada.
That price runs two to four times higher than the 4 cents or so per kilowatt hour that the utility paid over the past 18 months for its wholesale power, which comes mostly from natural-gas generation. …
But everyone acknowledges what the contracts show: Green power costs more than its fossil fuel-generated counterparts.
And it's only going to get worse in the future.
State law requires the utility to obtain 12 percent of its electricity from renewable sources in 2010; NV Energy executives said recently that they expect to surpass that mandate and get 14 percent of their juice from clean sources this year.
The renewable portfolio standard maxes out at 25 percent in 2025.
A) Microsoft B) ExxonMobil C) Wal-Mart D) American Bankers Association E) National Association of Realtors F) AFL-CIO G) National Education Association
If you said G) National Education Association, give yourself a gold star. In fact, according to Mike Antonucci, author of the recent Education Next article "The Long Reach of the Teacher's Union," the NEA spent $56.3 million in the 2007-08 election cycle, more than all of the above combined!
Between the NEA and AFT (the other major teacher union), the unions spent $71.7 million on political campaigns during the 2007-08 election cycle. The NEA almost always fronts money for politicians and voter initiatives to raise taxes or to fight tax cuts and tax-limitation measures. Naturally, the unions also fight against parental choice and charter schools, both of which limit their influence by decentralizing control over education.
During the 2007-08 election cycle, the teachers unions spent $812,000 in Nevada. Teacher union spending in Nevada amounts to $34.68 per teacher, ranking 11th highest in the nation.
The NEA also funds many left-wing organizations like America Votes, the Economic Policy Institute, People for the American Way, the Center for American Progress, and Media Matters. The NEA also funds dubious academic research centers like Arizona State's Education Policy Research Unit, which is highly critical of charter schools and conservative/libertarian organizations, and the left-wing Great Lakes Center for Education Research, which pretends it's not an NEA front group even though the bulk of its funds come directly from the NEA.
“We have an NBA team under contract,” Milam said, declining to name the franchise. But the deal will take effect only if “other pieces of the puzzle fall into place: One of those pieces will be that a building (arena) is approved,” he said.
The key to Milam’s plan is persuading Clark County to revive its redevelopment area and fund the arena using what is known as tax-increment financing.
Milam is scheduled to make his case to county commissioners at an Aug. 4 meeting.
Commissioners last month discussed arena proposals — three plans have been floated this year — but did not vote on whether they would support construction of any project. Based on their remarks, there appeared to be little support for any arena plan requiring public assistance. …
Milam’s plan calls for resurrection of the county redevelopment district. Developers would then be allowed to keep increases in property tax revenue over current levels. Taxes derived from the district to support the arena would be capped at $125 million.
Now if a developer wanted to build an arena with private money, that would be fine. The problem is raising taxes on others to subsidize private development. And as tempting as it would be politically for commissioners to "create" jobs (and a basketball team) by raising taxes on the arena's neighbors, it wouldn't be the right move economically.
The 4,000 construction jobs that Milam says would be created would be temporary, and the 7,000 jobs he says would be created either directly or indirectly from the stadium would be mostly part-time and low-paying hourly jobs.
For many years the “economic boom” idea of building stadiums seemed to make sense and city after state pumped billions of taxpayer’s dollars into such projects. But starting in the early 2000s, economists began to have enough data to show that the claims of beneficial end result of building stadiums was not as advertised.
In fact, these days economists that disagree amongst each other about so much have developed a wide consensus based on the belief that sports teams in and of themselves are not great economic engines for a city and that building giant new stadium complexes are not the automatic boon to the area such as they were sold.
The reason that these stadiums are not as great an investment as previously thought is threefold according to Andrew Zimbalist, the Robert A. Woods professor of economics for Smith College and renowned sports economist. Zimbalist spoke in early 2009 to Freakanomics author, Stephen J. Dubner in the pages of The New York Times.
For one thing, Zimbalist says, the money that will be spent on the events held at the new sports arena or stadium is money spent by local residents. This is not new money but money that would simply have been spent on other entertainment in the metropolitan area if the stadium didn’t exist. Secondly, the big money that goes to players, owners and investors does not stay in the area but is invested elsewhere. Third, the city or state is often chipping in up to a third of the continuing costs and this is tax money wasted, not revenue made. …
There are other problems with these projects, as well.
For one thing, the jobs created are for the most part low paid, part time and offer no benefits. Because of this “jobs” are not really created by a sports complex. Also, very few ballparks have been much of a boon to surrounding businesses. Few people that attend sports events stay around the area in which the stadium sits to shop, eat, or look for other entertainment. They go to the park and then they leave. About the only thing locals get are traffic nightmares and litter.
The prospect of an enlarged Las Vegas redevelopment area received a cool reception Tuesday, with West Las Vegas residents wondering why the supposed economic benefits haven't materialized there while large projects are under way elsewhere.
The chief concern was jobs. One of the goals of a redevelopment area, which is set up to encourage private investment in struggling areas, is to match residents of the area with jobs created by the investment.
The city of Las Vegas has not measured up to its own goals in that category, acknowledged Bill Arent, the city's business development director. …
"They haven't been met for any of the projects that have been awarded," said state Sen. Steve Horsford, D-Las Vegas, referring to the jobs goals. Without a clear demonstration of benefits, he said to general applause, "I for one do not believe that this expansion should occur."
It not only confirms the recommendations of the Nevada Policy Research Institute's "One Sound State, Once Again" study, it destroys the case liberals try to make for a corporate income tax or gross-receipts tax.
[A] corporate income tax is not a good choice if revenue stability is the goal. As the table below shows, corporate income taxes have proven to be the most volatile of the major taxes, as measured by year-over-year revenue changes. …
This showing of extremely volatile corporate income tax receipts nationwide is consistent with the Nevada Policy Research Institute's calculations for Nevada, and it is consistent with other scholarly work on the topic. Such volatility can be problematic for state budgets, where predictability and year-over-year revenue smoothness is preferred to maintain annual spending commitments. This is especially troubling for a state that has a bi-annual budgeting procedure. …
An important study released last year by the Organization for Economic Growth and Development (OECD) found that of the various taxes a country can impose, "Corporate taxes are the most harmful tax for economic growth."[3] The administrative and compliance costs of corporate income taxes are also considerable, and scholars across the political spectrum have called for the abolition of state corporate income taxes. ...
The chief economic problem with gross receipts taxes is the pyramiding nature of the tax. [5]That is, since the tax applies each time a business sells its goods or services, the tax "pyramids" on products as they move through the production process. The longer the production chain, the higher the effective tax rate on the final product. This produces major distortions in economic decision-making, with notably negative impacts on low-margin, high-volume businesses. …
Thus, a gross receipts tax badly distorts and interferes with business investment decisions, leading to lower economic growth and job growth. Sales, income and property taxes do not have the same tax pyramiding feature, making them more economically efficient taxes. An increase in any of those taxes would cause far less economic harm than a gross receipts tax that raises the same amount of revenue.
So what does the Tax Foundation think of NPRI's proposal to broaden and lower the sales tax rate?
Nevertheless, sales tax broadening can eliminate many unjustified exemptions, and if done without favoritism for particular industries and in a way that reduces the overall sales tax rate, can improve the stability of the sales tax while generating new revenue or paying for tax reductions elsewhere.
The Tax Foundation does warn of the dangers of businesses trying to carve out exemptions for their specific industries, and while this would be a problem, it's a problem that you face in any tax system. Taxes should be uniform and low, and believers in the free market are always going to have to defend that principle against liberals and businesses who want a special advantage.
Once again, the Las Vegas Sun editorial board has ignored the facts in favor of political dogma. Citing Dr. Lawrence Katz, a Harvard economist, the Sun argues that we must continue the extension of unemployment benefits because there are few jobs available for each person who remains unemployed.
Yet Dr. Katz found in a 1990 report that "results indicate that a one week increase in potential benefit duration increases the average duration of the unemployment spells of UI recipients by 0.16 to 0.20 weeks." That's right, the Las Vegas Sun has argued for extending unemployment benefits by citing a Harvard economist who says increasing unemployment benefits increases the duration of unemployment. Dr. Katz isn't alone, as many economists agree.
The most damaging "contrarian" report the political left can point to is a memo from Federal Reserve Bank of San Francisco that found unemployment would have dropped a very modest 0.4 points without the unemployment insurance extension. Still, that represents 600,000 laborers.
So the Las Vegas Sun is most certainly wrong on this one. Extending the unemployment benefits will likely increase unemployment and continue to increase the duration of unemployment in the U.S. The Sun editorial board is advocating a policy that will harm American workers, not help them.
The Sun simply believes that because there are few jobs, we should extend unemployment benefits. But unemployment benefits, and other government policies, may actually be killing jobs. Part of the problem now is that our government is borrowing and taxing heavily to pay for unemployment benefits - this means less capital for businesses to create jobs. Furthermore, government subsidies, bailouts, licensing, tariffs, wage regulations and stimulus packages have done nothing but shift resources from high-valued uses to lower-valued uses. Thus, at best, they have created no jobs and at worst have actually destroyed jobs (more on this at Marginal Revolution).
Finally, maybe the Las Vegas Sun editorial board can explain why they seem to think that unemployment benefits, which could be kept for up to 99 weeks in some states, have had little to no effect on increasing the average duration of unemployment to a record-shattering 35 weeks?
The Institute for Justice defends a small Minnesota farm from anti-free trade statutes that prevent them from selling flowers, pumpkins and Christmas trees in their own hometown.
Government employees in Nevada continued to get healthy raises during 2009, while the average privately employed Nevadan took a pay cut, according to a new report from the Nevada Department of Employment Training and Rehabilitation. The raise gap was especially evident for those employed in Clark County.
"Nevada Employment and Payrolls 2009," when compared to the 2008 edition of the report, shows the average private sector wage declined $13 a week, from $804 to $791. Local government employees, however, got about $47 more a week than they did in 2008; their average pay increased from $949 to $996.
That's a pay cut of 1.6 percent for private workers, compared to a raise of nearly 5 percent for local government employees.
The difference was even more dramatic in Clark County.
Private sector wages dropped from an $808 average to $790 a week, while local government wages climbed from $990 to $1,052.
That's a 2.2 percent cut for private workers, compared to a 6.2 percent raise for the local government employees.
How do their salaries keep increasing? Salary increases for which government employees are eligible include: cost-of-living adjustments, step increases, longevity, merit bonuses and more money for increased certifications. Even if some increases are eliminated, public employees can still receive overall salary increases, because they get a raise from another category. That is why even when public employees offer "concessions," their salaries still increase. They aren't taking a pay cut or freeze, they are just taking a decreased increase or, as it's known in the private sector, a pay raise.
For instance, the Las Vegas firefighters union just approved a revised contract with $5.6 million in salary concessions. It sounds like firefighters will be getting a salary cut, but when you read the details of the contract, you find that most of these savings are from decreasing scheduled pay increases and that the firefighters are still receiving a salary increase in the upcoming year. Only in government do wage "cuts" result in a pay increase. The next time someone bemoans the state of Nevada's finances, remind them that it's a spending problem, not a revenue problem, and that the increase in public employee salaries is one of the first places elected officials should look to cut.
The respective education plans of Brian Sandoval and Rory Reid have come under scrutiny by the Las Vegas Sun. The Sun notes that both plans claim to be “revenue neutral” by using existing resources more effectively, and that both gubernatorial candidates are advocating more parental choice. In the end, the Sun takes a slightly more critical look at Sandoval’s plan by relying on some flawed reasoning or half-thruths.
*Social promotion is based on the idea that kids learn better if they have high self-esteem and confidence.
1) Sandoval wants to ban social promotion in the third grade. If the student isn’t reading at grade level, he or she is held back for some remedial education focused on reading.
What the Sun finds:“As for Sandoval’s plan for third-graders, the district is already retaining hundreds of students annually. And “the sword cuts both ways,” Superintendent Walt Rulffes said. “There is research that shows retained students are at a much higher risk of dropping out of school. Supplemental services are a better solution.”
Why this is wrong: We have no reason to disbelieve that Nevada’s public schools are retaining hundreds of students, but we have no reason to believe that retention is consistent, concentrated, goal-oriented or focused on test results rather than teacher discretion.
As for the research, Walt Rulffes claims that some research shows that retention can harm students, and indeed some research does make this claim. However, many of these studies suffer from serious methodological flaws. These studies examine the results of students retained by teacher discretion – rather than test results – making it very difficult to have an appropriate control group. Control groups (promoted students) should be as similar as possible to the treatment group (students who are held back), but with teacher discretion, students in the control group range widely in skills, from low achievers to high achievers. Thus, we do not have an apples-to-apples comparison between students who are held back and those who are promoted.
Stronger empirical analysis shows that retention strongly benefits students. Two studies on Florida’s social promotion ban found that retained students improved in both mathematics and reading and that after two years, many had caught up with their peers. Those students who were socially promoted fell further and further behind.
*The Brookings Institution, a left-of-center think tank, finds that there is no difference in effectiveness for certified, uncertified and alternatively certified teachers.
2) Reid wants to tie teacher tenure and recertification to performance. This is an excellent idea. Sandoval wants more alternative teacher certification and to increase certification reciprocity with other states.
What the Sun finds: The Sun takes no qualms with Reid, as the National Council on Teacher Quality even registers Nevada as a state where tenure is “virtually automatic.” The council also recommends tying teacher performance to recertification. Reid seeks both recommendations, which is great policy.
Sandoval wants to eliminate tenure and base teacher bonuses on performance. He also wants to make it easier for professionals to become teachers and expand reciprocity (accepting teacher certifications from other states). The Sun takes issue with Sandoval’s plan by stating, “Nevada already has reciprocity with other states when it comes to licensing, as well as the Alternative Route to Licensure program for individuals who have a bachelor’s degree and want to enter the teaching profession.”
Why this is wrong: The Sun’s take on Sandoval’s proposal is only partially correct. Nevada does indeed have reciprocity and “alternative” teacher licensing, but Nevada’s reciprocity is not granted to teachers of all states, limits teachers on how much experience they can transfer over to qualify on the pay scale, and forbids emergency, alternative, conditional, preliminary, provisional, restrictive and other licenses from other states. In fact, you pretty much need a standard certification that was earned through college coursework at an accredited four-year college or university. Obviously, Sandoval is correct: We can and should expand reciprocity.
As for alternative pathways to teacher licensures? That is a more complicated story. For several months, the Nevada Department of Education’s website on teacher licensing has stated “COMING SOON!” and underneath lists dead links to information on alternative pathways to teacher certification. When I called the Nevada Department of Education to acquire more information on alternative pathways, I was immediately redirected to the Clark County School District.
CCSD’s alternative program is restricted to future science, math and special-education teachers. Completing the program requires a bachelor’s degree with a 2.75 GPA or above, 120-150 hours of professional development, 30 hours of in-classroom time with a veteran teacher, three to nine credit hours of additional graduate work in education, plus the successful completion of the Praxis exams. This is a very limited and time-consuming alternative.
Florida, which Sandoval wishes to emulate, allows private non-profit organizations to train and certify teachers. The American Board for the Certification of Teacher Excellence (ABCTE) is one of those organizations. The course, which can take six to 10 months to complete, costs just $1,995 and includes course materials and relevant tests. Compare that to the $2,230 (plus books) it would cost to enroll in CCSD’s alternative program or the $4,836 (plus books) it might cost to get a second bachelor’s degree in education (assuming the cost of Fall 2010 in-state tuition at UNLV).
*The average modern school principal
3) Both Sandoval and Reid want to hold teachers and principals accountable. Principals will get more freedom to operate, but they will be given more responsibilities as well.
The Sun finds: “Ralph Cadwallader, executive director of the Nevada Association of School Administrators, said so far no one’s asked the state’s principals if they want the intensive additional responsibilities that come with empowerment models.”
And because Sandoval proposed tapping into bond and capital funds, “Principals say there are too many older campuses in the district that need major remodeling, and those bond dollars must be protected.”
Why this is wrong: Right now principals are not much more than security guards and bureaucratic paper pushers. It sounds crude, but because principals are subjected to so much bureaucracy and central control, that is effectively what they have become. Principals in Nevada are held accountable for filling out paperwork and not much else. Principals should be given more control over how the school operates, its budget, and its teachers and then be held accountable for the results. If principals don’t want the additional responsibilities that come with freedom and accountability, then they probably don’t deserve the $100,000-plus salaries we’ve been paying them.
In regards to the bonds and capital projects, CCSD sat on $1 billion last year. For what reason? We don’t need more schools (even though they did build three more). The reason schools become dilapidated and need frequent remodeling is that schools don’t take good care of their buildings. This isn’t a Nevada problem, it’s a national problem, and it stems from the fact that building maintenance is a separate, central-office fund. They have no incentive to use buildings efficiently or take care of them because they will always have more revenue from tax dollars and bonds. If the funds were broken down by student and then awarded to schools based on student enrollment, you would likely see local schools taking better care of their facilities.
4) Sandoval and Reid want more school choice. Reid proposes public school choice and Sandoval proposes choice for kids in failing public schools and a universal voucher program.
What the Sun finds: “No Child Left Behind already requires districts to offer transportation to alternate schools for students who want to opt out of low-achieving Title I campuses (which receive extra federal funding to serve students from low-income households). But while tens of thousands of Clark County students qualify, only a few hundred take advantage of the option each year.”
Why this is wrong: The Sun always points this out when the issue of school choice is brought up, but this isn't the whole story. It is true that No Child Left Behind requires students in failing schools to be given the option of a new school, but 1) the school must be considered failing two years in a row, 2) the school district gets to choose the alternative schools, 3) many districts have been criticized for inadequately advertising the fact that parents may move their children, 4) there is often a short, two-week window in which to transfer the child and 5) choice between uniform, centrally controlled public schools isn’t much of a choice, and parents might recognize that fact.
Just because Nevada has a very limited, poorly advertised choice program among uniform schools that few students participate in, does not mean we should not have an expanded choice program – especially one in which schools must compete for students.
5) The conclusion
Finally, the Las Vegas Sun paraphrases Dr. David Damore, writing, “But the burden is on Sandoval to prove that school vouchers would really have a significant effect, Damore said. In other states the vouchers have proven to be of little use to parents because the monetary value isn’t enough to cover the full cost of parochial or private school tuition.”
Why this is wrong: The burden is not on Sandoval to prove vouchers work; it has already been proven. Nine out of 10 empirical random assignment studies show that vouchers work (nine out of 11 if you include the latest study on the D.C. voucher program, although there is the caveat that the voucher resulted in a graduation rate that was 21 points higher than the control group). Additionally, 18 out of 19 empirical studies find that public schools improve when faced with voucher competition.
Damore’s conclusion that vouchers are of little use because the monetary value isn’t high enough is only a partial truth. The ACLU made a similar claim this year in testimony to the Nevada Legislature, but the reasoning is bogus. It's like arguing that you shouldn't have food stamps because the food stamps don't cover the cost of all the food you might eat.
Here is the reality. Pretty much every voucher and tax-credit program in America today offers just a sliver of the funds available to traditional public schools. This is by design. When voucher opponents fail to stop the program in its tracks, they work to limit the funds available in the hopes that they can make the program less attractive. The D.C. Opportunity Scholarship Program offered scholarships worth up to $7,500 while the district spent $28,000 per pupil. Incidentally, the average scholarship awarded in D.C. was just $6,600.
Finally, the majority of voucher programs in the U.S. are so overwhelmingly popular – despite the limited funds – that they require lotteries in order to choose which lucky kids will get the money to go to a private school. If parents didn’t find vouchers to be of much use, we wouldn’t need lotteries to sort out who could attend a private school with a voucher and who was stuck in the traditional public school. Additionally, maybe Dr. Damore can explain how vouchers aren't of much use to these parents and students protesting the cancelation of the D.C. Opportunity Scholarship Program:
*Other issues like privatization will be addressed at a later date. It is highly questionable whether CCSD has something resembling privatization, especially considering the fact that CCSD employs a legion of carpenters, plumbers, electricians, architects, mechanics, custodians and lawn-care laborers (you wouldn’t exactly call that privatization, would you?) Furthermore, I will note that separate budgets from the general fund do not mean those other funds can not make more efficient use of available resources. Additionally, the funds themselves are merely budgetary gimmicks, as the money can be moved around.
Write on Nevada is the blog of the Nevada Policy Research Institute. NPRI promotes free-market public policies and individual liberty in the Silver State. For more information visit npri.org.
The opinions expressed on this website are those of the individual authors and should not be construed as the official view or position of the Nevada Policy Research Institute.
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