Knecht: College closures/mergers are not on the table

After the Board of Regents voted 8-5 to take the closure or merging of any colleges off the table, Sen. Steven Horsford ordered Chancellor Dan Klaich to prepare a report that includes closures and/or mergers. 

In today's Nevada Appeal, Regent Ron Knecht, who made the original motion to take closures and mergers off the table, has an excellent, excellent response.

After somewhat incomplete budget reduction plans were presented in March, it was clear that the governor's proposed cuts could be better accommodated by reductions at each institution than by cannibalizing any of them. So, at our March meeting, I moved to discontinue consideration of all such options. Some other regents expressly agreed that the destructive options are unnecessary and would be worse than institutional cuts, and the motion passed, 8-5.

And why did Horsford want college closures on the table? Politics.

The first concern is that tax-and-spend partisans may want to keep in play the destructive options to pressure the governor and Republican legislators to support increased taxes. The second concern is that our two universities may be promoting these options to mitigate their own cuts, even though budget processes already favor them over the rest of the system.

There's a reason NSHE is known for hyperbole. Unfortunately, this time legislative leadership is making them spin tall tales.

Eating the rich will leave you hungry

An absolutely terrific video by Bill Whittle rebuts Michael Moore's claim that America's budget deficit could be solved by taking money from "the rich."

Horsford mulling proposing a gross receipts tax

J. Patrick Coolican of the Las Vegas Sun had a conversation with Senate Majority Leader Steven Horsford this week. During the conversation, Horsford mentioned some of the tax increases he was considering, including a gross receipts tax.

• Expand the sales tax to services, which make up a significant portion of economic activity but go untaxed. The rate could be dropped to make the effect less regressive.

• Adopt the Texas franchise tax, which is a modified gross receipts tax on business and that allows for some deductions; or the Ohio commercial activity tax, which is a more pure gross receipts tax on business. Veterans of the 2003 tax fight, which went well into the summer and provided no permanent fix, are no doubt groaning. (Nevada is one of a few states in the country without some kind of corporate income or gross receipts tax.)

• Grab more money from local government while giving those entities more autonomy over their own taxes and spending.

While expanding the sales tax in a revenue-neutral manner would echo part of an NPRI recommendation, it's unlikely that Horsford's looking for a revenue-neutral expansion of the sales-tax base.

It's Horsford's consideration of a gross receipts tax that deserves the most consideration — and condemnation — here. Let's start with the basics: What is a gross receipts tax?

Gross receipts taxes have a simple structure, taxing all business sales with few or no deductions. Because they tax transactions, they are often compared to retail sales taxes. However, they differ in a critical way. While well designed sales taxes apply only to final sales to consumers, gross receipts taxes tax all transactions, including intermediate business-to-business purchases of supplies, raw materials and equipment. As a result, gross receipts taxes create an extra layer of taxation at each stage of production that sales and other taxes do not — something economists call “tax pyramiding.”

The Tax Foundation has a full explanation of the consequences of "tax pyramiding" and other structural problems with the gross receipts tax here, but this negative consequence is especially worth highlighting, as Nevada's politicians acknowledge the need for private-sector investment and growth.

Competitiveness: A gross receipts tax interferes with the capacity of individuals and businesses to compete with those in other states and other parts of the world. The tax embedded in prices grows as the share of a production chain within the state increases, so there is incentive to purchase business inputs from outside the state. It discourages capital investment by adding to the cost of factories, machinery, and equipment, and the disincentive increases as more of those capital goods are produced in the taxing state. This tax structure does not promote the growth and development of the state.

In summary, the economists at the Tax Foundation strongly denounce the gross receipts tax.

There is no sensible case for gross receipts taxation. The old turnover taxes — typically adopted as desperation measures in fiscal crisis — were replaced with taxes that created fewer economic problems. They do not belong in any program of tax reform.

Previously, Horsford changed his stance on imposing a corporate income tax, from supporting to opposing, because he recognized the inherent instability in the corporate income tax.

A review of the literature and the problems inherent in any gross receipts tax should encourage Horsford to make the same change regarding a gross receipts tax.

Regardless of how many tax dollars you want the state to have, a gross receipts tax distorts the marketplace, is inequitable and, overall, is a destructive tax instrument.

There is no sensible case for gross-receipts taxation.

Former governor Miller makes the case against class-size reduction

That's not what former governor Bob Miller intended to do in his column today on class-size reduction. But while I was reading through his piece, it was impossible not to notice that Miller had no evidence — beyond parent surveys and numerous assertions — to back up his claim that class-size reduction benefits students.

The first phase of class-size reduction was put in place for kindergartners and first-graders in the 1990-91 school year. ...

[W]e preserved class-size reduction, because it was a cornerstone of our commitment to helping every child in Nevada succeed in school.

This has been a significant financial commitment by the state to provide the best opportunities for our children and their future. Since its inception, about $1.8 billion has been invested in class-size reduction. Hundreds of thousands of our students have benefited from it. Every survey conducted has found parents believe strongly in smaller classes, and that their children are better off because of them.

If something were a cornerstone of my "commitment to helping every child in Nevada succeed in school," I'd want to know whether my commitment actually helped Nevada's children succeed in school.

Unfortunately, Nevada's educational performance has been stagnant for decades, despite its class-size reduction program and massive spending increases in education. Nevada now has the nation's worst graduation rate, 41.8 percent. The data also shows that from 1997 to 2007, Nevada's graduation rate declined by nearly 24 percentage points.

To be fair, you can't draw causation from this, because many factors influence graduation rates. If class-size reduction were as important as its supporters assert, though, one would expect to see some (positive) impact on graduation rates.

Instead, Nevada's scores on the NAEP fourth-grade reading exam have been stagnant from 1998 to 2009, while Florida, which passed a series of dramatic reforms starting in 1999, has seen its scores skyrocket.

On the other hand, 32 is the average class size in South Korea, which routinely outscores the United States on international tests. Large class sizes are an intentional part of South Korea's education system, because larger classes allow highly effective teachers to teach more students.

Research has also shown that teacher quality is a much greater factor than class size in determining student achievement.

Government programs need to be judged by their results.

By failing to provide any evidence that class-size reduction leads to better outcomes, Miller actually makes the case that Nevada's class-size reduction policy needs to go.

Assembly Democrats have a plan ... to get a plan

In the Army, they say that "A plan beats no plan," but I don't think this is what they meant.

Speaker John Oceguera said Tuesday that the Assembly will have a tax debate sometime after early May, whether or not he has the two-thirds votes necessary to raise taxes.

“We will have a revenue discussion … There will be a discussion on revenue whether there is two-thirds or not,” Oceguera told the Las Vegas Sun. “At some point we need to stand up and ask Republicans, ‘Is this really the state you want?’ ” ...

Oceguera said he will wait until after May 2, when the Economic Forum, a group of five business leaders, sets official spending projections. ...

Oceguera said there is no secret tax plan.

Yep, Assembly Democrats now have a plan to get a plan in six weeks.

First, if someone ever says Nevada needs longer sessions or annual sessions, please remind him of this. By their actions, Assembly Democrats are making the case that Nevada's sessions are too long.

Second, this should put to rest any accusations that Gov. Brian Sandoval, Republicans or believers in limited government aren't "willing to have a conservation," because they won't support tax increases. Sandoval has a budget plan and believers in limited government — like, shameless plug, NPRI — have many ideas to limit spending and spend the money we have more effectively.

Nevada's liberal politicians have ... Bueller? Bueller? Oh, wait — they have a plan ... to get a plan. How could I forget?

If you're going to accuse someone of not wanting to have a conversation, you should at least have something to say.

Third, Democrats probably do have a (secret) tax plan. Horsford wanted to raise $1.5 billion in taxes last summer. They just don't want you to know about it, à la the end of the 2009 Legislative Session.

By not releasing their plan publicly, Democrats are likely trying to avoid the political opposition a specific tax-hiking proposal would bring.

That means that to stop a tax hike, believers in limited government must remain vigilant and lawmakers who are opposed to job-killing tax increases must stand their ground.

And those lawmakers won't be alone. More than 680,000 people voted for a no-new-taxes candidate for governor in 2010.

Sandoval and the 680,000+ voter island

Last night, Gov. Sandoval appeared on “Face to Face” and was interviewed by Jon Ralston. In response to Monday's higher-education rally, feelers being put out by Assembly Minority Leader Pete Goicoechea and some recent comments made by Tray Abney of the Reno Sparks Chamber of Commerce, Ralston challenged Sandoval about honoring his promise not to raise taxes (video after the jump, 4:06 mark).

Ralston: So let me get this straight. I'm going to come at you again with this. You have the business group [the Reno Sparks Chamber of Commerce] saying this [they'll agree to tax increases in exchange for reforms]. Essentially the Las Vegas Chamber of Commerce has taken a fairly similar position. The Assembly Republicans have written a letter saying, "If you talk about reforms to the Democrats, we'll be willing to talk about not sunsetting those, those tax increases."

You're alone. You're an island, Governor. You're the only guy in the state who's not willing to have a conversation about reform versus taxes. You're alone. No one agrees with you.

Sandoval: I disagree. ...

Ralston: Who agrees with you?

Sandoval: ... What's new?

Ralston: Who agrees with you?

Now, Sandoval does a fine job answering this in the interview, but there are a couple of points here I want to make.

First, this isn't a question about the merits of Sandoval's proposals. It's really just a gut-check for Sandoval's level of political courage, analogous to the "everyone's doing it, so why aren't you?" taunts familiar to any current or former grade-school student.

Second, the premise of Ralston's question is simply false. Who's on the no-new-taxes island with Sandoval?

Let's start with his main gubernatorial opponent, Rory Reid. That'd be an interesting episode of Survivor, but they're hardly alone.

There are also the 680,000-plus Nevada voters who cast their ballots for either no-new-taxes Sandoval or no-new-taxes Reid. Suddenly, the island is looking a lot like Nevada.

Then there's the entire Republican Senate caucus, which has signed a letter clearly stating their opposition to tax increases: "[Y]ou have our unwavering support for your [Sandoval's] plan to balance the budget while fighting job-killing taxes."

And even one of Sandoval's main political opponents, Sen. Steven Horsford, agreed with the governor. It might get awkward on this mythical island.

"I won't support tax increases -- not when the private sector is losing revenue and losing jobs," Horsford told the Review-Journal's editorial board in September [2008].

"The general fund needs to be managed in a way that doesn't allow growth beyond population growth and inflation."

At least, that was Horsford's position when he was running for office. He violated that promise in 2009 and is leading the charge to raise taxes again this session.

Sandoval also has a plus-21-point gap between his approval and disapproval ratings.

So, who's on the no-new-taxes island and agrees with the governor? Outside of the Carson City cocoon — most voters, apparently. Looks like those supporting taxes are really the isolated ones (again, outside of the Carson City bubble).

The real question is: "Who doesn't agree with the governor, and why didn't they vote, run for office or, if they did run, be honest in their campaigns?

Video of the interview after the jump. The above exchange starts at the 4:06 mark.

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Atlas Shrugged the movie

Our friends at the Reason Foundation have a behind-the-scenes review of the first installment of the upcoming trilogy of Atlas Shrugged movies. Atlas Shrugged: Part I premiers in theatres on April 15 and is sure to ignite enthousiasm - particularly within the Tea Party movement, whose supporters frequently sport t-shirts bearing the question, "Who is John Galt?"

This movie series should also inspire controversy from across the political spectrum. Already, the "progressive" intelligentsia is labeling the film "socially dangerous." Well...at least the ideas portrayed by the film are dangerous for the national-socialist agenda to which the modern American Left adheres.

However, I'm guessing that some of the film's biggest critics will come from the political Right. Ayn Rand's most loyal disciples, the "Objectivists," are notoriously difficult to please and I would expect them all to voice dissatisfaction with any attempt to adapt Rand's masterpiece to the silver screen. This trait has also inspired many of the more prominent Objectivists to lead intellectual attacks against philosophies similar, but not identical, to their own (i.e. libertarianism). Libertarians have responded to these attacks in kind over the years, which has fostered some level of antagonism between the two schools of thought. In fact, perhaps the most critical attack on the Objectivists was made not by the Left, but by none other than Murray Rothbard: "The Sociology of the Ayn Rand Cult."

As an Austro-libertarian myself, I have never made a secret of my affinity for Rothbard. However, I will be the first one through the door to see Atlas Shrugged on opening night and I look forward to seeing the excitement the movie will generate.

Sunshine Week: A review of AB 257

Editor’s note: In honor of Sunshine Week, a national effort to promote a dialogue about the importance of open government and freedom of information, the Nevada Policy Research Institute is going to be examining bills in the Nevada Legislature that would impact the state’s open-meeting law, public-record requests or other transparency issues. Sunshine Week is a national effort to promote a dialogue about the importance of open government and freedom of information.

Assembly Bill 257, while short and simple, would have a tremendous impact on the public’s ability to participate effectively in government. If passed, this bill would allow the public to comment on each agenda action item as a public body addresses it and before a vote is taken. Currently, public bodies are required to hold only one public-comment period. That period can — and often does — come after voting has taken place.

Currently, the Clark County School District utilizes the public-comment process proposed by AB 257. School board President Carolyn Edwards, who spearheaded CCSD’s change in format, welcomes the idea of AB 257. She says that while there were some issues in the beginning, the process has made for better board decisions: “I wouldn’t want to go back because I think we make good decisions…” And while the CCSD school board takes public input on non-action items, which is not proposed under AB 257, Edwards thinks comment on these items is important as well because they may very well become action items later. “It helps you think about the needs and concerns,” she said.

AB 257 would also require a public-comment period on non-agenda matters to come just before adjournment. This would allow the public to know exactly when general comments will be heard. Many times, public bodies hold general comments during the middle of a meeting, after all votes are taken, or the chair, at his or her prerogative, will simply move public comments during the meeting. Often those wishing to speak have missed their opportunity because the meeting moved along quicker than expected or the chair moved the comment period. By placing the item at the end of the meeting, individuals will know exactly when comments will be taken and can plan accordingly.

Finally, this bill would make the public-input process uniform across all public bodies, allowing the public to learn one set of procedures and utilize them effectively across the state. Many times a public speaker, who is used to the procedure of one committee, will be confused about what is expected, because currently, each entity has its own way of taking public comment.

Does Nevada have a diversified tax structure?

You tell me.

Now a revenue-neutral tax-reform package, like what NPRI has proposed, would be a good idea

— in part, because it broadens the sales tax base.

But far too often, when leftists say "diversify the tax structure," what they really mean is, "Add a new tax" —with a corporate income tax or gross receipts tax being perennial favorites.

As you can see, adding a new tax isn't necessary to obtain a diversity of taxes in Nevada. (And regardless, a stable tax structure is more important than the number of taxes you have.)

NSHE now trying to tell the truth; some worried honesty will hurt them politically

There's an amazing article today in the Las Vegas Sun on the Nevada System of Higher Education. Written by David McGrath Schwartz, it details the efforts of some in NSHE to tell the truth.

Higher education is trying a new approach to proposed budget cuts: honesty.

After three years of reacting to proposed budget cuts with vague prophecies of doom — thousands of layoffs, eliminating athletic teams and the closure of popular schools — the higher education system is trying to provide detailed and more realistic scenarios for what would happen under Gov. Brian Sandoval’s budget.

Of course, if you've been reading Write on Nevada, you know about both Chancellor Dan Klaich's admission of past hyperbole from individuals in NSHE as well as how some officials in higher education — including Klaich — have continued to overstate those cuts.

Officials who are committed to telling the truth should be acknowledged and praised — and it’s a sad commentary that something as basic as truth telling must now be recognized, because it's been so rare.

Klaich's stark confession of past hyperbole was a great starting point. It's not Klaich's fault that former chancellor Jim Rogers frequently exaggerated. Klaich's admission of past mistakes is the first step toward an honest debate.

Regent Ron Knecht should also be noted for creating a spreadsheet that contains the last 12 years of NSHE operating budgets. This kind of accurate and easily accessible information lets anyone fact-check statements made by higher-education officials.

And why do some in the higher-education establishment oppose honesty? Because being honest would make it harder to scare people into action.

But in their effort to be forthright, some higher education officials worry they are hurting themselves politically by making cuts appear less dire. ...

Whether it’s higher education, Nevada K-12 schools or health and human services, campaigning against budget cuts is an exercise in mobilizing supporters to clamor for services and pressure policymakers.

It's easier to mobilize supporters if you lie to and scare them. That's why I've repeatedly urged citizens in Nevada not to be manipulated and to fact-check what they hear and read.

Unfortunately, NSHE's newfound commitment to honesty (although some, like Knecht, have been honest throughout) is not shared by all special-interest groups.

The budget reductions for UNLV, UNR and CSN are on the table. Let the debate, now with accurate information and alternative suggestions, begin.

Sunshine Week: A review of AB 239

Editor’s note: In honor of Sunshine Week, a national effort to promote a dialogue about the importance of open government and freedom of information, the Nevada Policy Research Institute is going to be examining bills in the Nevada Legislature that would impact the state’s open-meeting law, public-record requests or other transparency issues. Sunshine Week is a national effort to promote a dialogue about the importance of open government and freedom of information.

Assembly Bill 239, a bill revising Nevada's open-meeting laws to require public bodies to post agenda-item support documents, meeting minutes or audio recordings, and meeting videos on their websites, could increase public oversight of state and local public bodies by making supporting documents accessible 24 hours a day. However, despite these efforts to make public-meeting information more accessible, it appears the onus could still rest on the public and not the public body to initiate publication of the information.

Currently, the law requires a public body, such as a city council or school board, to provide individuals with a copy of any agenda-supporting documents provided to public-body members — but only if that individual requests those documents.

Under AB 239, a public body would be required to also post these supporting documents online at "the date and time the public body first provides the supporting material to a person who requests the supporting material." This language could reasonably be interpreted to mean that if no person makes a request for the documents, the public body has no obligation to post the materials online.

At first glance, it would seem that AB 239's alternative requirement to post supporting documents online at "the date and time the public body first makes the supporting material available to the public," would fix that potential loophole.

However, as often times happens to NPRI — at least with the Clark County school board — public-body members receive supporting documents which are not included in the package of materials initially offered to the public. This practice, which leaves the false impression that members of the public have all the documents that elected officials receive, would raise the question of whether the public body, under AB 239, would be obligated to post online the information given to the elected officials, but not the public.

If lawmakers wanted to eliminate any wiggle room in AB 239, they should model the law after NRS 241.020 (4) which requires all public bodies that maintain a website to post notice of their meetings online. If AB 239 required that all public bodies that maintain a website post all their supporting documentation online, these loopholes would be eliminated.

Sunshine Week: A review of AB 159

Editor’s note: In honor of Sunshine Week, a national effort to promote a dialogue about the importance of open government and freedom of information, the Nevada Policy Research Institute is going to be examining bills in the Nevada Legislature that would impact the state’s open-meeting law, public-record requests or other transparency issues. Sunshine Week is a national effort to promote a dialogue about the importance of open government and freedom of information.

Assembly Bill 159, which revises provisions relating to public records, appears to succinctly eliminate the significant obstacles government entities often hurl at members of the public who request public records.

Under AB 159, oral requests for public records would be given the same timelines, notifications and access as written requests. While current law seems to provide for this, some government entities only recognize written requests for records. For example, just last month, the Clark County school board publicly denied two verbal public-records requests made at a public meeting, including one made by NPRI, stating the request "must" be made in writing. Despite the school board's subsequent change of position, the board’s public record still indicates a mandate for written requests.

In another significant clarification, AB 159 would require the person who has legal custody of a public record to prepare a copy of the public record, if requested. This clarification prevents government bureaucrats from denying someone a copy of a record because the requestor has no way to make his or her own copy. This clarification could also save staff time and resources, because it would allow a person to inspect a larger file of public records onsite, identify the few records of interest and have the staff copy just those records. This would eliminate the need for staff to shuffle through the larger file to locate the few records the requester actually wants copied.

Public oversight and government accountability would also be improved under AB 159, which would: require copies of public books and records to be made available immediately upon request, in certain circumstances; limit the fee that may be charged for a copy of a public record in the custody of a law library operated by a governmental entity to 10 cents per page; require that copies of minutes and audio recordings of public meetings be made available to the public upon request and at no charge; reduce the fee a county clerk charges for copying records, proceedings or papers; and eliminate the fee a county clerk charges for searching records or files in the office of the county clerk.

The truth about pre-K (hint: it doesn't work)

At last night's education committee hearing, both Clark County Superintendent Dwight Jones and Washoe County Superintendent Heath Morrison indicated they are proponents of spending government money to provide pre-K services. Several liberal lawmakers have also previously indicated they are big fans of pre-K.

Each claims that funding pre-K increases student achievement.

Except it doesn't. Consider Georgia, which has had universal, state-subsidized pre-K since 1992.

Scores from the NAEP Fourth Grade reading test.

Or consider Oklahoma, which has had universal, state-subsidized pre-K since 1998.

Scores from the NAEP Fourth Grade reading test.

Now compare this to the reforms Florida instituted in 1998, and the ensuing results.

There's no contest. Why would anyone choose pre-K over the proven reforms of Florida? Bueller... Bueller...

Now, advocates of pre-K will cite small-, small-scale studies to justify this enormous expense, but those studies have significant limitations, which the Heritage Foundation's Lindsey Burke details here. She also explains here how government-funded pre-school could crowd out private alternatives.

In fact, the research in these papers is so important, I'm going to link to them again:

• Does Universal Preschool Improve Learning? Lessons from Georgia and Oklahoma
• More Government Preschool: An Expensive and Unnecessary Middle-Class Subsidy

The next time someone advocates pre-K as a solution to Nevada's education problems, remind him or her about Georgia and Oklahoma. There's no need to repeat a failed experiment.

State-subsidized pre-K is an enormously expensive program that produces little to no lasting increase in student achievement.

UNR President Glick misleads on the size of university's past budget reductions

In an open letter to University of Nevada, Reno staff on proposed reductions, UNR President Milt Glick wrote:

Since 2009, the University’s annual general fund appropriation has been cut $44 million, or 20 percent.

That statement is false, as you can see easily by looking at the last 12 years of operating budgets for the Nevada System of Higher Education.

There are two ways you could define UNR's annual general fund subsidy — as either the total amount of subsidy UNR gets from the state, or the amount of money going to UNR proper, excluding auxiliary programs like athletics and the Medical School. Either approach reveals Glick’s claim to be false.

Consider the total subsidy UNR has received in the past three years.

Fiscal Year 2009: $199.6 million
Fiscal Year 2010: $182.5 million (includes stimulus money used in place of a general fund subsidy)
Fiscal Year 2011: $175.6 million

Going from $199.6 million to $175.6 million per year is a $24 million, or 13.7 percent, reduction.

Consider the total subsidy UNR (excluding auxiliary programs) has received in the past three years.

Fiscal Year 2009: $130.6 million
Fiscal Year 2010: $121 million (includes stimulus money used in place of a general fund subsidy)
Fiscal Year 2011: $117.9 million

Going from $130.6 million to $117.9 million per year is a $12.7 million, or 10.8 percent, reduction.

I assume that Glick would justify his statements by saying he's referring to "cuts" from the amount UNR wanted, which is a) ridiculous (for example, your pay didn't get cut just because your boss didn't give you the raise you wanted) and b) not what he wrote.

Statements like Glick's are the reason why NSHE Chancellor Dan Klaich recently said:

I think we have been guilty of hyperbole in the past, where we get the first dollar of a cut and we would like you to believe that the sky is falling in. And here we are a few years later and, lo and behold, the sky is right where it started out. It has not fallen in.

Video of Klaich's comment after the jump.

This is just another example of why Nevadans — citizens and policymakers — need to fact-check the statements coming from many of those in higher education. Many higher-education officials are doing their best to earn a new kind of BS degree.

Semi-related and worth reading: Glenn Cook's recent editorial, “Bluster surrounds debate over salaries, benefits.”

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State politicians work nationwide to pull the rug out from voters

Steve Malanga has a great article in City Journal decrying the "taxonomy of fiscal gimmicks, evasions, and ploys" that state lawmakers have used nationwide in order to avoid a legitimate reconciliation of state budgets.

Malanga points out that state lawmakers who are sweeping capital improvement funds, borrowing against future revenue streams, papering over debt, and engaging in other fiscal chicanery are, consequentialy, defrauding the voters who have given a clear mandate to reduce state spending. In many states, lawmakers are pursuing these dubious strategies in order to explicitly circumvent spending constraints put in place directly by voters - short-circuiting the clear intent of the electorate.

As Malanga puts it:

Facing scary revenue drops that left their budgets dangerously unbalanced after years of runaway spending, states have employed an unprecedented number of fiscal gimmicks over the last two years to try to make up the difference. They have swiped revenues dedicated to maintaining roads or enhancing emergency medical systems; sold future lottery proceeds for cash today; grabbed unclaimed money in personal bank accounts; and redefined taxes as fees to get around constitutional limits on tax hikes. And they’ve justified these moves by claiming that voters are in no mood for the spending cuts or explicit tax hikes necessary to shrink deficits legitimately—even though the tricks often circumvent budget restrictions that the voters themselves enacted.

It's clear that most of these strategies are currently being used, or likely will be used, by policymakers Carson City. Yet, policymakers in the Silver State need to remember the reason they were put into office and stop using gimmicks to prop up unsustainable spending. It should have been clear at the outset that the 30-plus percent increase in real, per-capita General Fund spending that lawmakers embarked on between 2003 and 2009 was unsustainable. Now, voters have given lawmakers a clear mandate to reverse that increase.

This is not the time to play games - particularly when a detailed roadmap for reducing spending is readily available.

Audio: Klaich admits NSHE's past hyperbole

For the past couple of weeks, I've been citing this quote by Chancellor Dan Klaich whenever someone would overstate the impact of Gov. Brian Sandoval's proposed reductions to the Nevada System of Higher Education.

I think we have been guilty of hyperbole in the past, where we get the first dollar of a cut and we would like you to believe that the sky is falling in. And here we are a few years later and, lo and behold, the sky is right where it started out. It has not fallen in.

And now, for your listening pleasure, I have audio of his statement.



Unfortunately, those involved with the higher education system continue to make hyperbolic remarks. The latest:

Sen. John Lee, D-North Las Vegas, said hopelessness over long-term unemployment and pent-up anger about a funding imbalance that favors universities over community colleges has unemployed construction workers and others who are seeking retraining at their wits' end. ...

"We will have to do as they did in Egypt, fight for those rights," Lee told the group, who didn't respond other than to thank him for his testimony.

Umm ... yeah. Can't you see the similarities between fighting an oppressive regime and fighting to get more of the state funding pie? Chancellor Klaich did tactfully decline to agree with Lee's call to arms, though.

What's worse is that in the same article, the reporter, Benjamin Spillman, misreports the size of the NSHE operating budget, which makes the proposed funding reduction look larger than it actually is.

Republican Gov. Brian Sandoval's budget proposal would cut the system's operating budget from the current level of $556 million to $395 million by 2013.

False. The NSHE's current operating budget is $1.744 billion. Don't believe me? Check out the budget for yourself (second tab). What the $556 million figure refers to is the subsidy NSHE receives from the state, which is less than 32 percent of its operating budget.

In total, the reduction in state support proposed by Sandoval is less than 10 percent of NSHE's operating budget — and that's before you factor in tuition increases.

Crisis? Only if you're using hyperbole.

Reid skirts stupid law

The big news circulating on the blogosphere today involves Rory Reid's apparent evasion of campaign finance laws during his recent gubernatioral bid. For those who have not seen it, Jon Ralston first broke the story here.

Reid and his staffers set up an Economic Leadership PAC and encouraged donors to contribute to the PAC, saying it would be "an effort to assist his campaign." The campaign then set up 91 shell PACs and shuffled money from the Economic Leadership PAC, in $10,000 increments, through the collage of shell PACs and then into Reid's campaign account. This effectively allowed Reid to skirt campaign finance laws that limit contributions from a single source to $10,000.

It's clear that Reid's scheme at least violates the spirit, if not the letter of the law. Reid claims the scheme was vetted with Secretary of State Ross Miller beforehand although Miller, according to Ralston, "could not confirm that the Reid campaign cleared the machinations with his office."

However, while it is incumbent upon public officeholders and candidates (both roles filled by Reid) to uphold the law, I would be remiss not to point out the questionable constitutionality surrounding campaign finance laws that limit an individual's freedom to contribute. Contributing to the campaign of a political candidate is a fundamental and essential component of individuals' right to free speech, where those individuals are subject to democratic government. (I won't get into a discussion here of Locke's definition of natural rights and whether a democracy or a republic is the best means of safeguarding those rights. For those who are interested, see Hoppe's Democracy: The God that Failed.) As such, the majority of campaign finance laws are, in fact, a curtailment of individuals' First Amendment right to free speech.

It's possible that Reid's campaign broke the law, but it's also questionable whether the law itself is in conflict with constitutional provisions and/or the natural rights of individuals more generally. To put it succinctly: Reid may have broken the law, but the law may have broken the law first. If nothing else, this may give Reid standing to challenge the constitutionality of the tangled mess of campaign finance laws.

Note to the ACLU: U.S. Supreme Court has ruled that vouchers are constitutional

This morning I was listening to KUNR's “Beyond the Headlines” program. Host Brandon Rittiman interviewed Gov. Sandoval's senior policy adviser, Dale Erquiaga, on Sandoval's education reforms, including vouchers. He then had on Craig Hulse, from the Washoe County School District, and Allen Lichtenstein, from the ACLU, to respond.

One of the first objections Lichtenstein made to the voucher program was that it would be unconstitutional under the U.S. Constitution, because it would give public money to private schools. That assertion is wrong.

The U.S. Supreme Court ruled in Zelman v. Simmons-Harris (2002) that a well-designed voucher program that gives public money to private, religious schools is constitutional.

Ohio’s Pilot Project Scholarship Program gives educational choices to families in any Ohio school district that is under state control pursuant to a federal-court order. The program provides tuition aid for certain students in the Cleveland City School District, the only covered district, to attend participating public or private schools of their parent’s choosing and tutorial aid for students who choose to remain enrolled in public school. Both religious and nonreligious schools in the district may participate, as may public schools in adjacent school districts. ...

Held: The program does not offend the Establishment Clause. Pp. 6—21.

(a) Because the program was enacted for the valid secular purpose of providing educational assistance to poor children in a demonstrably failing public school system, the question is whether the program nonetheless has the forbidden effect of advancing or inhibiting religion. See Agostini v. Felton, 521 U.S. 203, 222—223. This Court’s jurisprudence makes clear that a government aid program is not readily subject to challenge under the Establishment Clause if it is neutral with respect to religion and provides assistance directly to a broad class of citizens who, in turn, direct government aid to religious schools wholly as a result of their own genuine and independent private choice. See, e.g., Mueller v. Allen, 463 U.S. 388. Under such a program, government aid reaches religious institutions only by way of the deliberate choices of numerous individual recipients. The incidental advancement of a religious mission, or the perceived endorsement of a religious message, is reasonably attributable to the individual aid recipients not the government, whose role ends with the disbursement of benefits. Pp. 6—11.

(b) The instant program is one of true private choice, consistent with the Mueller line of cases, and thus constitutional. It is neutral in all respects towards religion, and is part of Ohio’s general and multifaceted undertaking to provide educational opportunities to children in a failed school district.

While I'll refrain from making a joke about the ACLU's general counsel not being familiar with a major U.S. Supreme Court case on vouchers, the record does need to be clear and corrected.

A well-designed voucher program is constitutional under the U.S. Constitution.

Whether a voucher program is constitutional under the Nevada Constitution is a separate issue (I'd argue it is constitutional) and, at the moment, an irrelevant one, because Sandoval's voucher program would be passed as a constitutional amendment.

Overstating the impact of cuts to higher education (again!)

From the Reno Gazette-Journal:

Gov. Brian Sandoval’s recommended budget calls for a 17.6 percent cut to higher education from the current biennium budget — a number disputed by Chancellor Dan Klaich, who told a legislative budget committee the cuts are actually 29 percent. Sandoval’s cuts would subtract $162 million from the university system’s annual budget of $558 million, Klaich told lawmakers.

While you can play around with the percentages, saying that the "the university system’s annual budget" is $558 million is false. The university system's annual operating budget in Fiscal Year 2011 is $1.744 billion.

Don't believe me? See for yourself on TransparentNevada, where you can download the last 12 years of NSHE operating budgets.



Overstating the impact of budget cuts? Unfortunately, that seems to be standard operating procedure for those involved in NSHE. Maybe that's why, one month again, Chancellor Klaich said:

"I think we [NSHE] have been guilty of hyperbole in the past. Where we get the first dollar of a cut and we would like you to believe that the sky is falling in. And here we are a few years later and low and behold the sky is right where it started out. It has not fallen in."

I've previously praised Klaich for the honesty of the above statement, and I hope in the future, Klaich will do a better job of accurately reporting the facts.

How well does ending social promotion work?

This well:

We examined a policy in Florida that required third-grade student to perform at a certain level on the state’s reading test to receive an automatic promotion to fourth grade. Students who performed below the required level and repeated third grade made significantly greater academic progress than similar students who were promoted despite their lack of skills. The benefit of being retained grew so that by the end of the second year the retained students entered fifth grade knowing more than the promoted students did leaving fifth grade — this despite the fact that the retained students had not yet been exposed to the fifth grade material. [Emphasis added]

Read more here.

Credit where it's due: Horsford continues opposition to a corporate income tax

This isn't a new revelation since Senate Majority Leader Steven Horsford came out against a corporate income tax last year, but it's worth highlighting this again.

Senate Majority Leader Steven Horsford said Monday he no longer favors imposing a corporate income tax in Nevada, a sharp turnaround from a year ago when he railed in the Legislature against companies for not "paying their fair share."

"I've gone full circle," Horsford acknowledged in an interview with the editorial board of the Las Vegas Review-Journal.

Horsford's stated problems with the corporate income tax are that corporate income taxes are extremely volatile and hard to administer.

This stance doesn't mean Horsford's planning on honoring his promise to voters to not raise taxes during an economic downturn, however.

"I won't support tax increases -- not when the private sector is losing revenue and losing jobs," Horsford told the Review-Journal's editorial board in September [2008].

"The general fund needs to be managed in a way that doesn't allow growth beyond population growth and inflation."

It just means that he's looking for a less volatile and destructive tax. Two rumored alternatives are a gross receipts tax/franchise tax or a non-revenue neutral expansion of the sales tax.

There are many problems with a gross receipts tax. In fact, the Tax Foundation finds that:

There is no sensible case for gross receipts taxation. The old turnover taxes--typically adopted as desperation measures in fiscal crisis--were replaced with taxes that created fewer economic problems. They do not belong in any program of tax reform.

A non-revenue neutral expansion to the sales-tax could lead to government picking the winners and losers.

Horsford said he would consider a new sales tax on the $100 billion in services sold each year in Nevada.

The Las Vegas Chamber of Commerce argues the tax could target services relied upon by businesses and individuals with higher incomes, such as accounting and legal services. Depending on how it's structured, a sales tax on services could raise $500 million a year, supporters have said.

While it's great to see Horsford acknowledge the instability of the corporate income tax, taxpayers still need to be on the lookout.

Nevada's leftists still want more of your money. They just aren't telling you how they want to take it yet.

Sandoval proposes proven and substantive education reforms

 This is what real and substantive reforms look like.

The education reforms include a proposed constitutional amendment to offer private school vouchers and a system to grade schools based on student performance.

Gov. Brian Sandoval's education plan also includes the following:

• An accountability bill that would eliminate teacher tenure and do away with so-called "last in, first out" priorities when it comes to teacher layoffs.
• A proposed constitutional amendment to provide vouchers for parents to send their children to private schools.
• A system of evaluating schools with letter grades and ending social promotion, similar to reforms made in Florida under former Gov. Jeb Bush.

The bill drafts are forthcoming, so apply the usual "final judgment will have to wait until the actual language is produced" caveat.

That being said, similar education reforms in other states have produced dramatic results.
 
Evaluating schools with letter grades and ending social promotion are a couple of the policies Florida has instituted in the last 12 years. Florida's reforms have produced dramatic gains in student achievement. Nevada's students would benefit from these reforms as well.
 
Sandoval's proposal to eliminate teacher tenure and do away with "last-in, first-out" policies are especially important when you consider that teacher quality is the most important school-related factor in student achievement.

And Sandoval's voucher program is supported by overwhelming evidence that vouchers both save tax dollars and increase student achievement. Consider:

• Study after study has shown that choice-based education reforms (including vouchers and tuition tax-credit programs) improve student achievement.
• Ten high-quality, random assignment studies have been conducted on voucher programs. Nine found that some or all of the participants benefited academically from vouchers. One found no difference.
• Overview of the 10 studies and their results is here.
• No random assignment study has found students using vouchers did worse than students in public schools.
• In Washington, D.C., students who used a voucher increased their graduation rate by 21 percent.
• In Charlotte, N.C., students who used a $1,700 scholarship for one year scored 5.9 percentile points higher in math and 6.5 percentile points higher in reading than public school students who had not used the scholarship.
• Fifty-three percent of parents whose children used the scholarship gave their school an “A” compared to 26 percent of public-school parents.
• Parents love vouchers (and other school-choice programs).
• Of the five random assignment studies that have studied parental satisfaction, each has found large positive impacts.

If designed correctly, vouchers or tax credits can save Nevada money as well.

How do you design the program correctly? Unfortunately, you have to exclude all the kids who are currently attending private schools. Fair? No, but financially necessary and worth it once those kids are let into the voucher system a few years down the road.

During the campaign, Sandoval's opponent estimated a voucher program would cost about $100 million, based on the number of children currently enrolled in private schools.

“That number is a fallacy,” he [Sandoval’s senior adviser Dale Erquiaga] said. “It won’t cost $100 million. That would assume every child currently in private school will take a voucher. Well, in our proposal they aren’t all going to be eligible.”

There's a lot more to explore, including offering vouchers of greater value to low-income students, and we'll definitely be following this a whole lot more in the upcoming weeks.