NPRI's report card: How did your legislators do?

Most Nevada lawmakers receive low marks for 2011 Legislative Session

Just over one-third of Nevada's lawmakers compiled voting records that were generally friendly to Silver State taxpayers during the 2011 Legislative Session, a new report from the Nevada Policy Research Institute finds.

The report, titled The 2011 Nevada Legislative Session: Review & Report Card, also includes a detailed review of the session, documenting the events that culminated in Gov. Brian Sandoval and four Senate Republicans breaking their no-new-tax pledge and agreeing to extend a number of “sunset” taxes in exchange for minor reforms in education and to the Public Employees’ Retirement System.

The report’s author, Geoffrey Lawrence, deputy director of policy at NPRI, based his analysis on the ranking system that the National Taxpayers Union uses to rate members of Congress. The rankings are based on a scale of zero through 100, with the high end of the scale indicating a greater commitment to keeping taxes low, limiting the growth of government and implementing sound education reforms. Legislators who score above 50 are generally considered allies of economic liberty.

Only 22 of the 63 members of the Legislature earned scores above 50 percent. Sen. Don Gustavson, a Republican, earned the distinction of “taxpayer’s best friend” with a score of 89.1 percent, while Assemblywoman Peggy Pierce, a Democrat, had the lowest score at 26.52 percent.

“While it’s unfortunate that many legislators disregarded the interests of taxpayers during the session, it’s encouraging that the number of taxpayer-friendly legislators grew from 11 in 2009 to 22 in 2011,” said Lawrence. “Given Nevada’s economic challenges and the negative impact of the record-breaking tax increases passed in 2009, it was good to see Nevada’s lawmakers become more concerned about taxpayers’ concerns.

“Improvement is not enough, however. Citizens will still be impacted negatively by the significant tax increase approved by lawmakers this year. Many of the reforms ‘traded’ for taxes are either minor or written so narrowly, as in the case of collective bargaining reforms, that they apply to almost no one. Some of the best reforms lawmakers approved — removing the cap on empowerment schools and performance-based budgeting, for instance — passed on their own merits.

“The 22 legislators who did earn high scores in this analysis ought to be applauded for their commitment to sound fiscal and education policies,” added Lawrence. “Nevadans would benefit if the 2013 Legislature as a whole would follow the lead of these 22 individuals.”

The full report is available at http://npri.org/docLib/20110627_2011_NV_Review_and_Report_Card.pdf.
Underlying documentation for the rankings of lawmakers is available at http://npri.org/docLib/20110627_2011_Review_and_Report_bill_tracking.xlsx.

NPRI's 2009 Nevada Legislative Session Review & Report Card is available at http://www.npri.org/docLib/20090924_2009LedgeReportCard-Web.pdf.

Government spending v. economic growth

Cato's Steve Hanke has a great article today detailing the impact of federal spending policies on the nation's economic performance (although Rothbard and I would diverge somewhat from his outlook on monetary policy). Hanke demonstrates how the historical evidence confirms that government spending restraint is directly related to economic growth - to the chagrin of Washington's growing population of Keynesian apologists.

Many WriteOnNevada readers, however, might be most interested in the statistics Hanke provides on different presidential administrations' record on fiscal discipline. Hanke examines federal spending as a percentage of GDP and shows how that percentage has changed under each post-war administration. I've reproduced the results below:

1. Clinton -3.9
2. Eisenhower -1.6
3. Nixon -0.9
4. Reagan -0.4
5. Carter 0.3
6. Kennedy/Johnson 0.6
7. H.W. Bush 0.8
8. Nixon/Ford 1.8
9. Johnson 2.0
10. W. Bush 2.5
11. Obama 3.1

From this table, one might conclude that the Clinton Administration presided over the most fiscally conservative period of the post-war era, while the Bush and Obama Administrations have been the most frivolous. Of course, there are a number external factors that affected each administration. The Clinton Administration, for instance, benefitted from the end of the Cold War and the resulting reduction in military spending facilitated by that event, among other factors.

Not coincident to the spending policies enacted by each administration, however, is the record of economic growth. The economy grew rapidly and living standards skyrocketed during the 1990s whereas the record of economic performance under the administrations that oversaw an increase in federal spending, as a percentage of GDP, has been dismal.

Hayek wins again.

Problems with the Legislature come from politicians with power, not the process

In his Sunday column, leftist pundit Jon Ralston calls for full-time legislators who meet every year, because, he argues, "The Legislative Process" inevitably causes poor decision making.

Welcome to The Legislative Process, banned in 49 states but still the longest-running show in Nevada. (Yes, yes — I know other capitals have their own quirks and even abominations. But there’s no place like home.) ...

This is a process designed to produce lawmakers of generally low capacity because nothing much is expected of them. And, with some notable exceptions, they generally deliver on those expectations.

So we have a process that pays lawmakers too little so they can be influenced too much ($10,000 biennially with perks), a process that deliberately constrains deliberation (120 days?) and a process that inevitably will produce unintended consequences (again, too many to list).

While Ralston assigns the blame for the legislators' poor decisions to the process, the problems really stem either from legislators behaving badly or legislators having their hands in areas they shouldn't.

Let's consider some examples of poor behavior Ralston cites and consider the cause of that behavior.

• The Legislature exempted itself from the open-meetings law: Clearly, this is an example of legislators behaving badly. Paying legislators more and having them meet every year wouldn't solve this problem, it would exacerbate it.
• Too much lobbyist influence: Now, Ralston argues that this results from lobbyists taking advantage of inexperience legislators, so let's consider whether lobbyists have any influence in full-time legislatures, like the U.S. Congress.
  
  OpenSecrets reports that in 2010, 12,998 lobbyists spent $3.5 billion lobbying Congress and federal agencies. Good thing Congress isn't part time, or those numbers would really be out of control.
  
  Lobbyists exist because the people in the state legislatures and the U.S. Congress have enormous power — the power to tax, regulate and make things legal or illegal. Ideally this power would be used to create a low and uniform tax and regulatory burden that would allow government to fulfill its core functions and citizens to pick the winners and losers in the marketplace. Elected officials have greatly expanded the use of governmental power, and the most effective way to affect legislative decisions is through lobbying and campaign contributions.
  
  If you want to limit the influence of lobbyists, limit the power of government.
  
  Establishing a system where legislators are more dependent on their jobs as legislators would only increase their reliance on the lobbyists who could help them get elected or defeat them.
• The push for a government-funded, Las Vegas arena during the last few days of session: There was nothing inherent in "The Legislative Process" that made Senate Majority Leader Steven Horsford drop this bill, SB501, during the last few days of the session. As you can tell by the bill number, 500 bills in the Senate were introduced before this one. This was a decision by an individual and hardly something you can blame on the process.
  
  A corollary to this example is the Democrats’ tax-hike proposal, which they introduced 90 days into the 120-day session. While Ralston praised this proposal, he did bemoan the Democratic leadership's decision to introduce it with only a month left in the session. (NPRI had a dramatically different take on the merits of that proposal.)
  
  But that's the point — introducing it 90 days into the session was a decision. If Nevada had a 180-day session, they still could have chosen to introduce it on day 150. 
• Lawmakers took unreported junkets to London and accepted foreign campaign cash: The issue here is the amount of power lawmakers have. If you give lawmakers more power (through longer sessions), lobbyists will have more incentive to get access to them.

One of Ralston's recommendations — "ensure there is a waiting period for any legislation before it is voted upon" — is an excellent idea that would improve transparency in the Legislature. TransparentNevada asked a question related to this topic of candidates in 2010.

Liberals have long clamored for ideas similar to the others Ralston suggests: "Pay legislators more and make them full time" and "[m]eet every year."

These aren't just academic questions, either. In the 2012 general election, voters will have a chance to approve or reject AJR5, which would allow the Legislature to call itself into session without the governor's approval and would be the first step toward the Legislature meeting annually.

As demonstrated above, the poor decisions, processes and outcomes in the Nevada Legislature stem from either individual choices or the overreach of governmental authority.

Giving these same flawed politicians more power by expanding the length of the session and making legislators full time would exacerbate, not improve, these problems.

For more on how government oversteps its bounds, encouraged by both businessmen seeking an unearned advantage and those seeking government wealth redistribution, I encourage you to read The Law by Frederic Bastiat, available online and for free here.

Here's just a taste of Bastiat's brilliance.

[French political philosopher Guillaume] Raynal's instructions to the legislators on how to manage people may be compared to a professor of agriculture lecturing his students: "The climate is the first rule for the farmer. His resources determine his procedure. He must first consider his locality. If his soil is clay, he must do so and so. If his soil is sand, he must act in another manner. Every facility is open to the farmer who wishes to clear and improve his soil. If he is skillful enough, the manure at his disposal will suggest to him a plan of operation. A professor can only vaguely trace this plan in advance because it is necessarily subject to the instability of all hypotheses; the problem has many forms, complications, and circumstances that are difficult to foresee and settle in detail."

Oh, sublime writers! Please remember sometimes that this clay, this sand, and this manure which you so arbitrarily dispose of, are men! They are your equals! They are intelligent and free human beings like yourselves! As you have, they too have received from God the faculty to observe, to plan ahead, to think, and to judge for themselves! [Emphasis added]

Speaking truth to leftist deniers: American is broke (with fancy charts from Heritage)

American is broke. This shouldn't come as a surprise to anyone who's looked at the national debt clock recently, but the unwillingness of some individuals to admit this or, worse, disparage those who point out this fact is shameful.

Consider what liberal columnist E.J. Dionne Jr. writes in the Washington Post:

Just one problem: We’re not broke. Yes, nearly all levels of government face fiscal problems because of the economic downturn. But there is no crisis. There are many different paths open to fixing public budgets. And we will come up with wiser and more sustainable solutions if we approach fiscal problems calmly, realizing that we’re still a very rich country and that the wealthiest among us are doing exceptionally well.

Two points here. First, the statement "[w]e're not broke" really hinges on the definition of broke. Dionne is right that America has enough money pay its bills today (through unsustainable amounts of borrowing), but he's wrong — and being wrong here has serious long-term consequences — if you define broke as not having money to meet your long-term debt obligations.

On an individual basis, imagine a man with no savings making $40,000 year who has $20,000 in student loans, $25,000 in credit card debt and $15,000 in car debt. Is he broke? Maybe not, he might be able to make minimum payments and scrap by without declaring bankruptcy.

Now imagine that same man is making a $600 a month mortgage payment, but he has a balloon payment of $250,000 due in six months. This would be fine if his home was worth the $300,000 he paid for it, but because of the downturn in the market, his home is only worth $100,000. Is that man broke? Yes, yes and yes. And if he was your friend and family member, I hope you'd have to common decency to tell him so, instead of letting him live in denial for just a little while longer and worsen the inevitable crash.

He can (barely) make his payments today, but in the very near future he won't have the money needed to meet his obligations. He's broke.

That man also represents the United States of America.

Second, Dionne's "there is no crisis" line would be like telling the man in the story above that everything will work out if he makes no or minimal changes to his spending patterns. Sorry, America doesn't have that kind of time.

And here's where the charts from the Heritage Foundation's excellent 2011 Budget Chart Book come in. America's national debt is set to skyrocket.

(Click to enlarge)

And what's the main driver of that skyrocketing debt? Medicaid, Medicare and Social Security.

(Click to enlarge)

And can we tax the rich to get of this mess? Only if you can magically get "the rich" to pay 223 percent of their income in taxes. Good luck with that.

(Click to enlarge)

So why does this matter? Are you following what's happening in Greece right now? Our debt-to-GDP ratio will approach theirs in less than 15 years.

(Click to enlarge)

So what can we do about this crisis, aside from consistantly standing up to sovereign-debt-crisis deniers like Dionne and Michael Moore? Heritage also has an alternative budget plan.

(Click to enlarge)

Heritage's budget plan, Saving the American Dream, is available here. The only other budget plan I'm aware of that would fix America's debt crisis is the one presented by Rep. Paul Ryan, A Roadmap for America's Future.

These charts and the crisis they depict is staggering. America's so broke, the AARP is now open to cutting Social Security benefits.

It's (way past) time to admit America's broke and take steps to fix the problem.

Step 1: Cut spending.

Are you an unemployed teen? Thank the AFL-CIO

Nevada's teenage (16- to-19-year-old) unemployment rate is a staggering 34.5 percent, the second highest in the nation. And while many factors influence economic decisions and statistics like unemployment, Nevada's inflated minimum wage is a substantial factor in teenage unemployment.

In Nevada, one of about a dozen states with a minimum wage higher than the national rate, minimum pay has jumped 60 percent since 2006, from $5.15 to $8.25 for uninsured hourly workers. (For hourly workers with employer-sponsored health insurance, the state's rate equals the national rate.) The minimum-wage gains far outstrip broader pay trends, which have been flat.

Employers have responded to higher minimum wages in three ways: They've replaced their lowest-skilled workers with technology — consider self-checkout grocery lines — and they're making higher-paid workers do more, such as restaurants asking waiters to bus their own tables. They've also gravitated toward more experienced workers. All of those approaches displace teens, Saltsman said.

Increased unemployment isn't just hitting teenagers, it's impacting all lower-skilled workers. Why?

Because if you're a lower-skilled or inexperienced worker, often times you aren't worth $8.25 an hour. But if individuals work hard for a year gaining skills and experience, many will end up earning more than $8.25 an hour. The tragedy is that Nevada government — through a constitutional amendment, no less — prohibits employers from hiring 18- and 19-year-olds (under-18 employees are exempt from the state minimum wage) at what they're actually worth, thereby negatively impacting not just their ability to earn summer spending cash, but also their ability to gain valuable experience.

"A job is more than a paycheck. Some people call it an invisible curriculum," said Michael Saltsman, a research fellow at the Employment Policies Institute, a nonprofit research group in Washington, D.C. "It's what you get from learning to report to a manager, working with customers and assuming the responsibilities that come with that first job. Teens who don't have that are taking a step back, and they'll be at a disadvantage relative to their peers who have experience."

And why does Nevada have a job-killing minimum wage enshrined in its constitution? Well, Danny Thompson, executive secretary treasurer of the Nevada State AFL-CIO, brags on his bio that "Danny was also the architect of the successful Constitutional Amendment to raise the minimum wage in Nevada."

While some voters also bear responsibility for approving the minimum-wage constitutional amendment in 2004 and 2006, Thompson and the AFL-CIO were the driving force behind the higher minimum wage and the loudest voice opposing Sen. Joe Hardy's SJR2, which would have removed the minimum wage from the constitution.

So if the inflated minimum wage is so important, surely Thompson applied it to all union workers ... right? Nope, Thompson and the AFL-CIO specifically excluded employees working under a collective bargaining agreement.

All of the provisions of this section, or any part hereof, may be waived in a bona fide collective bargaining agreement, but only if the waiver is explicitly set forth in such agreement in clear and unambiguous terms. [Emphasis added]

So while AFL-CIO lobbyists argue that repealing the minimum wage will take "income away from individuals struggling to put food on their tables," they're totally fine with taking that income away if those individuals are paying union dues.

Hypocrites.

Are you an unemployed teenager? Thank the AFL-CIO.

Letter from San Diego teacher to teachers' union

Sarah Mathy, a young teacher in the San Diego Unified School District recently sent a letter her union president, criticizing the union for throwing highly-effective, but junior teachers under the bus in order to protect less-effective, but more senior teachers. Here's an interesting excerpt from her letter:

Dear Mr. Freeman - In March I was asking you to negotiate with (the district) so that many (all?) of the layoffs could be avoided. I called for things such as extra furlough days and opening the health benefits package negotiation. I wanted our union to get creative about the endless possibilities for solving this problem so that jobs are saved and kids are served.

But so far, all I have received are layoff notices #1 and #2 from (the district), and emails from (the union) calling me to more action and more rallies.

This is not what I want.

And the unspoken but clear message being sent to me from (the union) is that you are a union that wants to prioritize the interests of the senior, not junior, members. That when (the union) is not "winning" the battles with (the district), it will put the junior members out in the name of protecting the senior.

All along, it has seemed like a very logical fix to me to negotiate with (the district) so that the weight of this budget crisis is distributed on the shoulders of all teachers, not just on a few hundred. That is solidarity. That is "together we are stronger." I feel instead like (the union's) hostage and not (the district's), as you mentioned in a recent email blast.

So the questions become: "WHO is (the union) working for?" and "WHAT is (the union) working for?" Unfortunately for my situation, the WHO seems to be the senior members, and the WHAT is status quo for salary and benefits for those who will remain.

That will not work in this current fiscal crisis. You need to negotiate with (the district) and launch a campaign to convince union members that this is the best option.

I don’t think you will have as much opposition to a contract renegotiation as you may think. Many of my colleagues unaffected by layoff notices believe in some form of contract modifications so we all can have our jobs.

We work in a dynamic profession with multi-faceted students, and I want my union to mirror that. With some salary or benefit alteration, we can all keep the jobs we love to do, live comfortably and take care of our families, and make sure students get the most of everything. This has to be an AND situation, not an EITHER/OR.

So I trust that with the same confidence and care with which you engaged my concerns in March, that you move (the union) into a new chapter where we can feel more like brothers and sisters, instead of the haves and have-nots.

Sincerely,
Sarah Mathy
Teacher for 6 years at Central Elementary

Mathy's comments are directed at the San Diego teachers' union, but the same observations could be made of virtually any union in the public or private sectors. The primary objective of a union is to pursue above-market wages and this typically means a crowding out of junior employees or new entrants to an industry as more wages are absorbed by senior workers. Murray Rothbard frequently pointed to the role of unions in exacerbating unemployment problems. Mathy is simply giving an insider's voice to the objection that Rothbard and other notable economists have recognized for decades.

Fortunately for Nevadans, recent legislation passed by the state legislature (AB229) requires Nevada school districts to at least consider criteria additional to seniority when making layoff decisions. According to the bill's language, school boards, when considering workforce reductions, "must not base the decision to lay off a teacher or an administrator solely on the seniority of the teacher or administrator and may consider certain other factors." [Emphasis added.]

Certainly, the language highlighted here is not very strong, but it at least begins to move in the right direction by giving an extremely minimal assurance that Nevada's children will have access to effective teachers and not just those who have gone through the motions for a longer period of time.

Hat tip: Education Action Group Foundation.

Liberal columnist Paslov: Give higher-ed subsidies or civilization will end

I know that headline sounds like a joke, but it's not. That's the theme in Eugene Paslov's latest column, titled “The loss of civilization.”

Chris Bayer's letter to the governor (Nevada Appeal on May 28) charged the chief executive, “Please stand up for civilization, including funding for the arts, the schools, the libraries and museums. There is no good future, no economic growth, no advancement by individuals, no shared dreams without these things.” Mr. Bayer's voice is one to which we should all pay attention. It is the voice of rationality, of reason, of survival.

One can imagine there was such a voice among Loren Eiseley's ancient humanoids [referencing an anecdote earlier in the piece] — a voice that spoke out to preserve its teachers and artists. But that voice was silenced by a dull, arching club, destroying forever a piece of civilizations' future.

A discouraging incident occurred recently in Carson City. A 34-year experienced professor, who created and operates one of the most successful musical theater programs in the nation, was told that her contract would end in 2012. Stephanie Arrigotti is an exceptional artist. She is an extraordinary teacher. Her program is an economic driver for the community. Imagine, if you will, the vacant, dull eyes of those who are only concerned about cutting budgets, mindlessly swinging a symbolic club to crush the artistic life out of our community. This decision must be reconsidered. ...

Our future is at risk. Let's not symbolically "club to death" our teachers and artists, our voice for a civilized community.

Apparently, Paslov missed the memo from Nevada System of Higher Education Chancellor Dan Klaich that NSHE is trying to cut down on the hyperbole, because this claim is so laughable, it's embarrassing.

While the subsidy NSHE gets from the state did get reduced in the recent budget agreement, total spending on NSHE is going back to the level it had in the pre-historic days of ... 2008. Or, if you're just comparing the state subsidy, you end up in the land-before-time days of ... 2003.

I remember those days. We didn't have the iPhone 4, the Cosmopolitan hotel, flying cars or anything.

I can't go back. Please, no ... save civilization. How did we ever have the Declaration of Independence, aqueducts or Shakespeare without Nevada's higher-education subsidizes?

The real sham here is Paslov's form of argumentation. If you don't agree with him on the amount of higher-education subsidies, you aren't a thoughtful person with a respectful disagreement. No, you're a barbaric, club-wielding zombie — with " vacant, dull eyes" — trying to "symbolically ‘club to death’" teachers and artists.

You can't debate someone like Paslov, because his argument isn't about debate. It's about demonizing his opponents — fiscal conservatives — with accusations so ridiculous that even intellectually honest leftists should be embarrassed.

Lest you think I'm being too harsh, Paslov isn't just a random citizen. Along with being a regular columnist, he's also a former Nevada state superintendent of schools. Indirectly, this does help explain exactly how Nevada tripled its inflation-adjusted, per-pupil spending over the past 50 years, while still getting the same results.

And if you don't agree with me, you must be a club-wielding barbarian who wants civilization to end.

U.S. is in even worse shape financially than Greece

Headline from CNBC.

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco's Bill Gross told CNBC Monday.

Much of the public focus is on the nation's public debt, which is $14.3 trillion. But that doesn't include money guaranteed for Medicare, Medicaid and Social Security, which comes to close to $50 trillion, according to government figures.

The government also is on the hook for other debts such as the programs related to the bailout of the financial system following the crisis of 2008 and 2009, government figures show.

Taken together, Gross puts the total at "nearly $100 trillion," that while perhaps a bit on the high side, places the country in a highly unenviable fiscal position that he said won't find a solution overnight.

Pimco, by the way, runs the world's largest bond fund. As Gross said later in the article, "We've got a problem and we have to get after it quickly."

The U.S.'s debt, from overspending and future unfunded liabilities in Medicaid, Medicare and Social Security, is a crisis, and perhaps the biggest crisis is how many in the public aren't unaware that the U.S.'s level of spending isn't sustainable.

If you think you can help the public understand the sovereign debt crisis, check out this contest sponsored by the Powerline blog. The person who can most effectively and creatively dramatize the significance of the federal debt crisis will win $100,000. Full details here.

And hurry, the situation's not getting any better.

Good sign: Superintendent Jones demands honesty on graduation rates

What's the first step toward recovery for an individual in Alcoholics Anonymous? Admitting you have a problem.

What's an encouraging first step for the Clark County School District? Admitting that it has a huge graduation problem — and, by implication, huge problems throughout the entire system.

When Dwight Jones was hired last November to be superintendent of the Clark County School District, he promised honesty and transparency to win over a distrustful and suspicious community.

Now, School District officials are acknowledging what critics have long suspected — that high school graduation figures have for years been inflated to paint a better picture than actually existed.

“We’ve known for a long time the community has been challenging some of the data that the district was coming out with,” said Pedro Martinez, Jones’ recently hired deputy superintendent of instruction.

“We need to have the trust of the community, the parents and all of the district’s employees,” he said. “The reality is when the data are not clear, then frankly people mistrust it. The new superintendent came in and said we’re going to find out the real numbers. Whatever the truth is that’s what we’re going to put out there.”

The issue became pointed this week when Education Week magazine reported that Clark County’s public school graduation rate was 44.3 percent in 2008, not the 68 percent figure that had been reported under Jones’ predecessor, Walt Rulffes. That’s a difference of 24 percentage points. ...

Jones and Martinez have adopted a new formula to determine the district’s high school graduation rate. The formula is expected to lower this past year’s previously reported rate from 68 percent to 51 percent, a number they say reflects reality.

A graduation rate of 44.3 percent or 51 percent is a huge problem. But admitting that your graduation rate is substantially lower than the lie your predecessor told the public is great news. Great news.

You can't fix a problem you won't publicly admit you have. Between this show of honesty and his awesome-sounding growth-model plan, I'm cautiously optimistic that Superintendent Dwight Jones is serious about pushing substantial reforms, in contrast to the highly lauded but ultimately window-dressing education reforms we got out of the legislative session.

Jones' biggest obstacle to improving Clark County schools is going to be the Clark County Education Association, which, because of the Legislature's inaction, still has substantial power to hinder Jones' implementation of needed reforms.

Let us hope that by showing the community the depth of the problem CCSD has graduating any student — white, black, Latino, male or female — the public will stand up to the CCEA and support Jones as he implements changes to increase student achievement.

Teacher earning $58,000 a year, including benefits, claims he'd starve without a second job

This Las Vegas Sun story, of course, never mentions how much he makes, but check out the sympathy it gives to the teacher.

By day, Daniel Avellino teaches math and reading to 20 students in his second-grade class at Roberts Elementary School in Henderson.

By night, the 31-year-old is an actor at the Las Vegas Mob Experience, playing the role of a casino security guard who “beats up” alleged card cheaters in front of hundreds of tourists.

Avellino is one of a number of Clark County School District teachers who have taken up second jobs to make ends meet as the district tries to figure out how to plug a projected $150 million budget deficit next year.

“Last year, pay freeze. This year, a cut in pay. I don’t want to stick around to see what happens next year,” he said as the nine-month school year winds to an end today.

The article notes that Avellino has $50,000 in student-loan debt and over $10,000 in credit-card debt.

“Any disposable income I may have had has completely evaporated, and now they want to cut my pay,” he said.

The gig brings in about $1,000 to $1,500 each month — enough to give Avellino “some breathing room,” he said.

“Without this job, I’d be starving,” he said. ...

“It’s heartbreaking. I feel like I’m being forced out of this position, but you can only take so much. You have to say enough is enough.” [Emphasis added]

Read the full article to get a full sense of just how sympathetic reporter Paul Takahashi makes Avellino's situation out to be with a not-so-subtle undertone of "it's outrageous anyone would cut this hardworking teacher’s pay." The logical takeaway from that is "we need higher taxes."

So how much does Avellino make as a "starving" teacher? $20,000, $25,000 a year?

Nope. Over $58,000 a year (plus summers off) — $42,695 in salary, $9,179 in PERS contributions and a health-insurance plan currently worth $6,620.

Readers of the Sun story, though, don't find out that Avellino makes the equivalent of $48.62 an hour. And that's a shame, too, because that one simple fact — readily available on TransparentNevada and easily deduced from CCSD's own teacher salary schedule website — would change the entire tone of the story.

If you're earning $58,000 a year and can't afford to eat, you've got a debt and spending problem. You need Dave Ramsey, not a pay increase.

Although, if that's how Avellino wants to spend his money — fine. And if he wants to get a second (and third) job to pay for it, good for him.

But don't complain to the public — with the not-so-subtle implication being that taxpayers need to pony up more money — that you'd starve without a second job when you're making over $58,000 a year.

At a time when Nevada's unemployment rate is 11.9 percent and its actual jobless rate is near 24 percent, complaining about making $58,000 a year (with summers off) shows how out of touch some government employees are.

Texas billionaire pretty upset Nevada didn't give him $1.4 billion

It looks like Texas developer Chris Milam is taking his ball(parks) and going home.

The deal to buy land west of Interstate 15 for a three-stadium sports complex has collapsed, ending a Texas developer's plans for the $1.95 billion project across from Mandalay Bay. ...

"The discussions ended. It's not happening," [John] Knott [executive vice president of the CB Richard Ellis Global Gaming Group] said, blaming the collapse on the Nevada Legislature's failure to approve a bill that would have allowed Clark County to create a special taxing district for one of three alternate and competing Las Vegas stadium projects.

Aside from the numerous, numerous studies showing that government-subsidized stadiums are a horrible waste of taxpayer dollars, giving a private developer $1.4 billion for a private stadium would have been crony capitalism at its worst.

Fortunately for taxpayers, Assembly Taxation Chair Marilyn Kirkpatrick and other members of the Taxation Committee were skeptical and effectively killed the enabling legislation that would have allowed Milam and other arena developers to gain taxpayer dollars from the Clark County Commission.

The whole issue of government-subsidized stadiums is a perfect example of what the political philosopher Frederick Bastiat, writing in The Law, called legalized plunder. Bastiat defines plunder as follows: "When a portion of wealth is transferred from the person who owns it — without his consent and without compensation, and whether by force or by fraud — to anyone who does not own it, then I say that property is violated; that an act of plunder is committed."

In the following passage, Bastiat does a great job defining legalized plunder, its dangers and what to do about it. Although Bastiat wrote this in 1850, notice how relevant his points are to our current political debates.

Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame, danger, and scruple which their acts would otherwise involve. Sometimes the law places the whole apparatus of judges, police, prisons, and gendarmes at the service of the plunderers, and treats the victim — when he defends himself — as a criminal. In short, there is a legal plunder, and it is of this, no doubt, that Mr. de Montalembert speaks.

This legal plunder may be only an isolated stain among the legislative measures of the people. If so, it is best to wipe it out with a minimum of speeches and denunciations — and in spite of the uproar of the vested interests.

How to Identify Legal Plunder

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law — which may be an isolated case — is not abolished immediately, it will spread, multiply, and develop into a system.

The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.


Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it. [Emphasis added]

For anyone interested in understanding the philosophical foundation of limited government, individual liberty and free enterprise, I cannot urge you strongly enough to read The Law. It's well-written, brilliant, short and available for free online.

After reading it, you will understand why both giving subsidies to businesses and wealth-redistribution programs are anathema to liberty.

If Milam wants to build stadiums in Las Vegas with his own money, good for him. Until then, Milam should take his quest for legalized plunder elsewhere.

AB376 will show if Sandoval is serious about his no-new-tax promise; Updated

After Gov. Brian Sandoval broke his no-new-tax pledge and brokered a deal to raise taxes by $620 million in the next two years, it's logical to wonder how fiscally conservative the governor is.

AB376 will give Nevadans an insight into the question. AB376, passed literally during the last minutes of the session, would allow the owners of the Reno Aces to charge additional taxes for their own benefit and add a $2 room tax to downtown hotels.

Proposals that will allow the Reno Aces to add a surcharge for parking, concessions and tickets passed in the last 2 minutes of the session that ended on its scheduled deadline of 1 a.m. Tuesday.

Also passing at the wire was a plan to charge a $2 room tax at downtown resorts to fund the renovation of the downtown National Bowl Stadium, Reno Events Center, Ballroom and Livestock Events Center. ...

The proposal to refurbish the bowling stadium is tied to critical tourism negotiations, city leaders said. At stake may be a 20-year commitment from the United States Bowling Congress to come to Reno each year for annual tournaments.

This bill has many of the same problems as SB501, which would have allowed Clark County to use tax dollars to subsidize a sports arena. I've previously described the problems with government-subsidized sports pork here.

The question is now this: "What will Gov. Sandoval do?"

AB376 clearly contains a tax increase. Here's some of the language from the bill.

An ordinance enacted pursuant to subsection 1 must impose a surcharge of $2 on the per night charge for the rental of a room in a hotel in the district that holds a nonrestricted gaming license.

Sandoval has previously opposed new taxes, with one glaring exception.

Is that exception a true exception or will that exception become the rule? Watching what Sandoval does with AB376 will give taxpayers a clear answer.

Update: I should clarify that AB376 is not a direct tax increase. It would enable the city of Reno, in the case of the Aces' tax increase, and the Washoe County commissioners, in the case of the hotel room tax increase, to raise taxes after a two-thirds vote of the respective local government bodies. (H/T to Ray Hagar for pointing this out to me directly.)

The point still stands, however — if Sandoval is serious about no new taxes as a policy (whether he prevents taxes from being raised directly or prevents enabling elected officials in Reno and Washoe County to raise them), he will veto this bill.

Other problems with the bill include the fact that giving tax dollars away to private business owners is neither the role of government nor an effective economic policy.

Irony: Sen. Kieckhefer votes for tax increases, because he ‘made a commitment’

Today, the Nevada Senate passed a $620 million tax increase. Freshman Sen. Ben Kieckhefer was one of four Senate Republicans to vote for the tax increase.

What's ironic here is a statement Kieckhefer made to Ray Hagar of the Reno Gazette-Journal. Hagar asked Kieckhefer if, after receiving numerous e-mails opposing his decision to raise taxes, the senator would reject tax increases.

The first-year senator from south Reno, who knocked off the sign-kickin’ Ty Cobb in the GOP primary, says he remains a solid vote for the budget deal.

“I made a commitment. I don’t plan on breaking it.” [Emphasis added]

While sticking to your commitments is an admirable quality, it's one Kieckhefer applies selectively. He did not keep the commitment he made to his constituents in 2010 — that he wouldn't vote for the sunset taxes — and he broke his word to them today.



Kieckhefer isn't the only Republican to break his word — Sen. Dean Rhoads, Sen. Joe Hardy, Sen. Mike McGinness and Gov. Brian Sandoval also fit that description.

NPRI statement on SB501: Government subsidized stadiums are economically harmful pork projects

NPRI spokesman: Government-funded stadiums are government pork at its worst

LAS VEGAS — In testimony submitted to the Assembly Taxation Committee on Senate Bill 501, which would allow Clark County to approve one of multiple proposals for a taxpayer-funded stadium, Victor Joecks, the communications director at the Nevada Policy Research Institute, offered the following remarks today:

Good afternoon, Madam Chair and members of the committee. My name is Victor Joecks and I’m the Communications Director with the Nevada Policy Research Institute. Thank you for the opportunity to testify on Senate Bill 501.

I’d like to make three observations today.

First, despite what the developers may claim, these proposals are not an example of entrepreneurship or the free market. If these were free-market proposals, the developers would be risking their own money. (And if they were investing their own money, we’d be applauding them.) Instead, they wish to risk government tax dollars to build a business venture designed primarily to benefit them. At its core, this is crony capitalism. Government’s role is not to subsidize businesses — big or small — and these proposals are clearly subsidizes. Government’s role is to establish a uniformly low tax and regulatory burden and let individuals in the marketplace — not elected officials in Carson City or Clark County — choose the winners and losers.

Second, although this proposal may not require a direct tax increase (although one option does include a fee for parking spaces), tax-increment financing systematically channels tax dollars away from the legitimate functions of government, including K-12 education, public safety and roads, among other things, and into the hands of private business owners. This means non-subsidized businesses must bear a heavier tax burden.

Third, economists (at least those not directly employed by those seeking these subsidizes) have consistently found that taxpayer-financed stadiums do not provide the promised economic benefits. And I’d like to note that most of these stadiums and arenas had a major-league franchise from one of the four major sports, which no proposal under consideration today can guarantee.

Here is a sampling of what economists have said about government-financed sports stadiums:

The Budget Office of the City of New York: Research consistently finds that new stadiums do not produce economic growth in metropolitan areas. These results imply that stadiums do not lead to increases in tourism, nor do they serve as a significant attraction to non-retail establishments. To the extent that stadiums benefit the businesses near them, the benefits reflect the expenditures of metropolitan area residents.

National Taxpayers Union: Publicly funded stadiums are, at best, an inefficient investment of taxpayer dollars for the meager benefits produced and, at worst, massive payments to rich team owners and players at the expense of ordinary taxpayers.

I’d also like to note that this bill would require the contractors to pay prevailing-wage rates, which would artificially increase the burden on taxpayers.

Neil deMause, who studied the issue for 12 years, during which time $10 billion of taxpayer money was spent on 50 stadiums, co-authored "Field of Schemes: How the Great Stadium Swindle Turns Public Money into Private Profit."

He told a congressional oversight committee, "I have yet to find any independent economists — that is, ones not on the payroll of pro sports teams — who believe there is any significant positive impact to local economies from sports stadiums and arenas.”

Raymond Keating of the CATO Institute: “The economic facts, however, do not support the position that professional sports teams should receive taxpayer subsidies. The lone beneficiaries of sports subsidies are team owners and players. The existence of what economists call the "substitution effect" (in terms of the stadium game, leisure dollars will be spent one way or another whether a stadium exists or not), the dubiousness of the Keynesian multiplier, the offsetting impact of a negative multiplier, the inefficiency of government, and the negatives of higher taxes all argue against government sports subsidies. Indeed, the results of studies on changes in the economy resulting from the presence of stadiums, arenas, and sports teams show no positive economic impact from professional sports — or a possible negative effect.”

Here is what Brookings Institution Economist Robert Baade found after comparing projected returns from new sports stadium construction, “which frequently are estimated by stadium boosters, with the more objective estimates of returns from stadiums that were actually built reported in studies by economists. He finds substantial divergence, with the former generally predicting positive returns and the latter finding little or no impact.”

Also, researchers have consistently noted that the jobs created by stadiums are generally low-paying jobs that require minimal skills.

I’ve also compiled a list of just a few of numerous other economists and researchers who point out the problems with taxpayer-funded stadiums. I’ve submitted this research to your staff.

Thank you, and I’d be happy to answer any questions.

Additional findings:

• Economists and researchers note the problems with government-funded stadiums, http://www.npri.org/docLib/20110603_Additional_findings_on_government_funded_stadiums.pdf

Why do PBS and KNPR receive public funding?

That's the question raised yesterday by Cato's David Boaz, who calls PBS "a public menace." He raises some great points about the television station's questionable obsolescence:

What, in a world of hundreds of radio and TV channels, is so special about PBS and NPR that they should get $420 million a year of taxpayers' money?

When I was a boy growing up in western Kentucky, with three TV networks, it was understandable that people thought an "educational" network would add something important. But my brother's kids in that same little town later had access to hundreds of cable stations.

PBS used to ask, "If not PBS, then who?" The answer now is: HBO, Bravo, Discovery, History, History International, Science, Planet Green, Sundance, Military, C-SPAN 1/2/3 and many more.

Further, Boaz highlights that KNPR listeners are statistically much more affluent than the average American and asks why working- and middle-class taxpayers should be forced to subsidize the news and entertainment preferences of the rich. Good question - but subsidies for KNPR are but one of many regressive wealth transfers effected by federal and state governments. Others include: the Fed's inflationary policies that transfer real wealth holdings from American households to wealthy Wall Street bankers and the US Treasury, farm subsidies, subsidized universities, renewable energy subsidies and a plethora of other government programs designed to plunder the working and middle classes for the benefit of special interests.

Video: Sen. Kieckhefer promises not to vote to renew ‘sunset’ taxes

This video clip is from the April 20, 2010 edition of “Nevada Newsmakers," which featured a debate among the Republican candidates for Senate District 4.

In the video, then-candidate Ben Kieckhefer says he's against higher taxes and explicitly states he will not vote for renewing the "sunset" taxes.



After Gov. Brian Sandoval broke his no-new-tax promise by agreeing to renew the "sunset" taxes, some political pundits have reported that Sen. Kieckhefer will vote for the higher taxes and the budget deal.

I don't know how Sen. Keickhefer will vote.

What I do know is that in 2010, he promised his constituents that he would not vote to renew the sunset taxes.

Will he keep or break his word? We'll know in just a few days.

Bonus: Here's a Kieckhefer campaign advertisement. That first bullet point reads "Lower taxes, less spending."

Sandoval vetoes bill dumbing down high school graduation standards

The bill is AB456 and, as I wrote last week, it would have allowed students to graduate while failing a portion of the high school exit exam.

Today, Gov. Brian Sandoval vetoed the bill with the following comments.

"Although this bill may allow more students to graduate from high school, it represents diminished expectations for our students and lower standards for obtaining a high school diploma in Nevada," said Sandoval in his veto message.


"In my State of the State address, I said that our education system emphasizes too many of the wrong things. AB456 is another example of this paradigm and would send the wrong message to our students."

The bill would need a two-thirds vote to overturn Sandoval's veto, which it didn't have in the Senate when it passed the first time.

With only minor education reforms passing this session, Nevada didn't need to water down its standards any more.

Presidential candidates on Medicare reform

Cato's Michael Tanner, who recently headlined a series of NPRI Policy Luncheons, has an excellent review of the presidential hopefuls' stances (or lack thereof) on Medicare reform.

Specifically, he reviews each hopeful's reaction to Paul Ryan's plan for entitlement restructuring that would at least give a faint hope of long-term solvency to the federal government. It's definitely worth a read.

NPRI statement on budget deal that includes over $600 million in tax increases

NPRI analyst: Taxpayers the big losers in budget agreement
LAS VEGAS — In response to the announcement that Gov. Brian Sandoval and Democratic legislative leaders have reached an agreement on the state’s budget that includes over $600 million in tax increases, Geoffrey Lawrence, the deputy director of policy at the Nevada Policy Research Institute, released the following comments:

Taxpayers are the biggest losers in the deal announced today by Gov. Brian Sandoval, Speaker John Oceguera and Sen. Majority Leader Steven Horsford. As a result of this agreement and Sandoval’s breaking of his no-new-tax pledge, Nevada’s businesses and families will see their sales and business taxes increase.

At a time when Nevada’s effective unemployment rate lingers near 24 percent, this tax increase will lead to lower wages, more unemployment and higher consumer prices. Lifting the sunsets also underscores the dangers of a “temporary tax hike” — when government agencies use one-time revenues to fund ongoing operations, they become dependent on those revenues and the “temporary” taxes rarely expire.

With the sunset date being pushed to 2013, Nevada’s citizens will now have to wait at least two more years for their politicians to keep their word.

Lawrence acknowledged that eliminating the Modified Business Tax on the first $250,000 of salaries will benefit businesses, but also noted that the very need for that change highlights the inherent problems with the MBT, which penalizes employers for hiring workers.

Beyond its immediate and detrimental impact on taxpaying Nevada families, today’s agreement is strange from a policy standpoint. As recently as one month ago, Gov. Sandoval was advocating for a spending plan of $5.8 billion. After $440 million in new money became available in early May — following the Economic Forum’s meeting and the announcement of higher federal Medicaid match rates — Governor Sandoval used that new money to increase his proposed spending to around $6.3 billion. After the Supreme Court’s ruling called into question $657 million of his funding, the governor became unwilling to consider a spending plan similar to the one he was trumpeting just last month.

Ironically, Democratic leaders in the legislature said today that the agreement “responsibly funds education” even though the spending plan remains virtually unchanged from the plan they were condemning a week ago. Prior to the Supreme Court ruling, Democratic leaders called the governor’s funding proposals “unacceptable.” The only thing that has changed is the funding source — not the total level of funding. This suggests that levying tax increases was an end in itself for the majority party — and not increasing funding for education or health and human services.

As part of the budget deal, Democrats in the Legislature agreed to pass several reforms, including education changes. Lawrence said the reforms are beneficial, but they represent only a small step forward.

The reforms — especially those to revise teacher tenure policies and make it easier to identify and retain highly effective teachers, while dismissing those who perform poorly — are meritorious on their own and should not have had to be conditioned on $600 million in higher taxes. It’s as if lawmakers are saying they only care about decent education for children if they can be paid for it.

Also, the package of education reforms included in this agreement falls far short of the aggressive agenda of proven reforms announced by Sandoval in January. There is no movement toward school choice, it will take at least three years to remove ineffective teachers and social promotion will remain in place. Nor does this package include any reforms that would bring long-term cost-savings to even approach the additional taxes that will be imposed.

Lawrence also noted that before the session began, NPRI identified billions in potential savings through specific reforms in the areas of K-12 and higher education, Medicaid, public safety and labor reform. These recommendations would have provided more than enough savings to offset any impacts from the court’s ruling, said Lawrence.

Is a budget deal close? Update: Deal reached, hold onto your wallets

Update: Both Gov. Brian Sandoval and Sen. Majority Leader Steven Horsford have tweeted that a deal has been reached. Announcement coming at 2 pm. Head over to TweetNevada.com to follow the real time conversation and be sure to follow NPRI on Twitter at @NevadaPolicyRI.
____

So reports KSNV:

Sources in Carson City tell News 3 the deal was made Wednesday morning and is expected to go public sometime after 1 p.m.

Stay tuned or follow us on Twitter @NevadaPolicyRI for updates.

As Gov. Brian Sandoval has reversed his promise not to raise taxes, the budget deal will likely contain several hundred million dollars of tax increases and, according to the Review-Journal, spend around $6.5 billion to $6.8 billion, which would be an increase from the current biennium's $6.4 billion in general fund spending.