Posts Tagged ‘Lawrence’

Nevada Think Tank Says Complicated Public Education Funding Plan Masks Real Per Pupil Spending

By Sean Whaley | 6:01 pm September 12th, 2011

CARSON CITY – So how much are Nevada taxpayers shelling out to educate children attending the state’s 17 public school districts this year?

And if the answer is not easy to ascertain, is it time to consider revising the 44-year old Nevada Plan, the admittedly complex formula used by the Legislature every two years to fund public education?

The Nevada Policy Research Institute, a conservative think tank, recently weighed in on this issue, noting that many people, including policy makers, are either confused or deliberately misleading on the issue of per pupil funding in the public schools.

“To make informed public-policy decisions, taxpayers and policymakers should be aware of what they are really spending to educate children in the Silver State,” said Geoffrey Lawrence, author of the NPRI article called “Confusion is the Plan.”

This chart showing how the Nevada Plan works makes the complexity of the plan clear.

Nevada lawmakers are about to embark on a comprehensive study of public education funding as a result of the passage of Senate Bill 11 from the 2011 session, so there may be the opportunity to bring some clarity to the issue.

Sen. Barbara Cegavske, R-Las Vegas, agrees that Nevada officials should come to agreement on how to calculate per pupil spending. But of greater concern is how the money is spent, she said.

Sen. Barbara Cegavske, R-Las Vegas.

“To even talk about money, to me, is irrelevant,” Cegavske said. “You need to talk about how are we going to better educate kids so they are successful. You can give them a diploma, but if they can’t do the work or they don’t have the strategic intellect that employers look for, what good is spending the money.”

Assemblywoman Debbie Smith, D-Sparks, said while complex, the Nevada Plan has served the state and its students well.

“It’s one of the few areas in the education world where we are acknowledged nationally for our equitable funding plan,” she said.

But the upcoming study will provide an opportunity to review it to see if it needs adjustment, Smith said.

Assemblywoman Debbie Smith, D-Sparks.

The biggest concern in the NPRI article was a suggestion that maybe public schools don’t require the level of funding they now receive based on the per pupil analysis, she said.

“I think public schools in this country are the great equalizer,” Smith said. “I think it is perfectly acceptable for us to look at our funding formula periodically and also to make sure we’re able to talk similarly about the way we explain numbers.”

Crunching the numbers

Lawrence suggests that when all sources of funding are included in per pupil expenditures, the dollars spent are much higher than some would have you believe.

His analysis shows that for the 2011-12 school year, the Clark County School District plans to spend a total of $12,369 per pupil ($9,152 on current expenditures), while the Washoe County School District plans to spend $11,390 per pupil ($10,441 on current expenditures).

This is far more than the average of $5,263 for 2012 and $5,374 for 2013 approved by the 2011 Legislature. This is because the state funding is only one piece of the Nevada Plan funding puzzle. Locally generated property and sales taxes, along with other revenues, add to this total.

The funding process starts with a determination of what level of basic support is needed for each pupil. Then local reviews are estimated to determine how much they will contribute. The state provides the remainder.

But there are also funds that are “outside” the Nevada Plan, including federal funds and school construction spending.

Lawrence says that with a graduation rate of less than 50 percent, taxpayers need to know how much they are spending, and what they are receiving in return. He questioned whether private schools could achieve better results with less funding.

Washoe County Schools Superintendent Heath Morrison, while questioning some of the numbers used in the NPRI article, agrees that Nevada would be better served if everyone could agree on a uniform set of numbers for public education spending.

“Everybody’s got different numbers and everybody is using different numbers,” he said. “And so it really gets complicated in terms of trying to make some baseline comparisons, which I think is really necessary.

Washoe County schools Superintendent Heath Morrison.

“So I applaud NPRI’s article in terms of trying to say, there are a lot of numbers out there and we really ought to use accurate numbers,” Morrison said.

Morrison said it was fair of NPRI to comment on Nevada’s woeful 50 percent graduation rate, but the Washoe district has worked hard on improving that number, which now stands at 63 percent, well above the state as a whole. That number will jump again and get close to the national average of 71 percent when the latest rate is announced Wednesday, he said.

The Nevada Plan has achieved its goals

While admittedly complex, Ray Bacon, executive director of the Nevada Manufacturers Association and a long-time education reform advocate, says the Nevada Plan has worked to equalize funding among the state’s 17 school districts and headed off potential lawsuits that have plagued dozens of other states.

“Is it a perfect formula? The answer is no,” he said. “But it works and it has kept us out of the lawsuit hell since 1967 or whenever it started, and we’re one of the few.

“Does it need to be adjusted? The answer is absolutely,” Bacon said. “Because what the economic situation was in 1967 is not what it is today.”

Where inequities do exist is with the schools within the districts themselves, although the federal No Child Left Behind Act has remedied some of that, he said.

Morrison agrees that the plan has worked as intended to send additional funding to Nevada’s rural school districts, which have expenses despite smaller student populations, from transportation costs to offering comprehensive programs.

But it does not address the more recent reality faced primarily by the two larger urban districts, which is educating children with poverty and mobility issues or who are not English proficient, he said.

“I think the old Nevada Plan probably benefits the rural districts, and I would hate to see that impacted negatively, but it also doesn’t address the huge increase in percentage of kids who come with those additional learning needs and clearly they have resource issues,” Morrison said. “And so as we look at that plan I think that is something that has to be revisited.”

Craig Stevens, director of government relations for the Nevada State Education Association, agreed that the demands for educating Nevada’s urban student population is not adequately addressed by the Nevada Plan.

The upcoming legislative study is the result of a bill sought by the Clark County School District to consider a weighted enrollment formula to take into account the different educational needs of children in the larger districts, he said.

“Not every student is the same and some cost more to educate,” Stevens said.

But the biggest concern the association has with the Nevada Plan is that the funding is like a see-saw – when local funding increases, state funding is correspondingly reduced, he said.

“In the good times and local revenues are up, really and truly unless that overall number – the basic per pupil – goes up, it’s a zero sum game,” Stevens said. “It’s really not taking into account what the economy is doing.”

One point of contention among Nevada officials is whether to count money spent on school construction, or on the repayment of school construction bonds, in the per pupil total.

NPRI included these expenditures as part of the total.

Cegavske said there is no question that these expenditures should be part of the total.

“To take any part of it away, I think, is disingenuous,” she said. “It all comes out of taxpayer dollars and they need to know how that money is being spent.”

Smith agrees the construction money needs to be accounted for, but separately from per pupil spending to evaluate student achievement. Counting construction costs in Nevada, which led the country in growth for 20 years, would not provide a fair comparison to a state that had slow or no growth, she said.

But Lawrence says the cost of buildings and related expenses are factored into the cost of private school tuition, and so should be counted for a fair comparison on the cost of providing an education.

“The costs of constructing a facility, and heating and cooling and everything, they are necessary expenditures for delivering public instruction, unless you’re going to do it outside in the heat, which I don’t think anybody’s advocating for,” he said.


Audio clips:

Sen. Barbara Cegavske says the more important issue is what taxpayers are getting for their money:

091211Cegavske1 :27 spending the money.”

Cegavske says school construction should be counted in per pupil costs:

091211Cegavske2 :17 is being spent.”

Assemblywoman Debbie Smith says Nevada’s public education funding plan has served the state well:

091211Smith :20 one school district.”

Washoe County schools chief Heath Morrison says the NPRI article raises an important issue about finding common ground on reporting per pupil spending:

091211Morrison1 :18 use accurate numbers.”

Morrison says the Nevada Plan does not take into account the cost of educating some students with special learning needs in the larger districts:

091211Morrison2 :20 to be revisited.”

Ray Bacon of the Nevada Manufacturers Association says the Nevada Plan has helped the state avoid education equity lawsuits unlike many other states:

091211Bacon :33 it is today.”

Craig Stevens of the NSEA says the association does not like the Nevada Plan because funding levels do not increase in times of economic growth:

091211Stevens :21 and vice versa.”

NPRI author Geoffrey Lawrence says school construction costs must be included in per pupil funding to provide for a fair comparison with private schools:

091211Lawrence :18 is advocating for.”



Conservative Nevada Think Tank Grades Lawmakers On Taxes, Education Reform

By Sean Whaley | 2:00 am June 28th, 2011

CARSON CITY – A conservative Nevada think tank gave passing scores to 22 Republicans in the just-concluded 2011 legislative session, handing out failing scores to four other GOP lawmakers and all 37 Democrats in a report card released today.

The report card produced by Geoffrey Lawrence of the Nevada Policy Research Institute formulated the grades based on each lawmaker’s voting record on legislation related to economic freedom and education reform. The 78 specific bills used in the analysis are available for review at the group’s website.

Tops in the analysis was Sen. Don Gustavson, R-Sparks, with a score of 89.1 percent out of a possible 100. He was followed by Sens. Greg Brower, R-Reno, and Michael Roberson, R-Las Vegas, with scores of 88.63 percent. Sens. Elizabeth Halseth, R-Las Vegas, with a score of 88.15 percent, and James Settelmeyer, R-Gardnerville, at 87.68 percent, rounded out the top five.

Sen. Don Gustavson, R-Sparks, won top honors in the NPRI report card./Nevada News Bureau file photo

The 12 lawmakers with the highest scores were all Republicans who voted against a measure to extend a package of taxes for two more years, six in the Senate and six in the Assembly.

“I think that will make my constituents very happy,” Gustavson said of his grade. “The business community as well.”

The state was not in a position to raise taxes this past session, although a majority of lawmakers ended up supporting such a policy, he said.

“We need to keep business going by not raising their taxes,” Gustavson said.

At the other end of the scale, Assemblywoman Peggy Pierce, D-Las Vegas, received the lowest score of 26.52 percent. Pierce authored a number of tax measures in the 2011 session, including a proposed tax on services and tax hikes on cigarettes and alcohol.

Assemblyman Tick Segerblom, D-Las Vegas, another one of the low scoring Democrats, called the grade a badge of honor.

“If they don’t like me it means I’m doing something right,” he said.

Segerblom said he campaigned on increasing taxes and is a strong supporter of education and unions, positions supported by his constituents.

“They can read the score and if they don’t like my grade and don’t like the way I voted they can obviously vote me out,” he said. “But I think I voted just like my constituencies wanted me to.”

Assemblyman Tick Segerblom said the low grade from NPRI is a badge of honor./Nevada News Bureau file photo

Segerblom said based on his grade with the NPRI he intends to run for the state Senate in Clark District 3 being vacated by Sen. Valerie Wiener, D-Las Vegas, who must step down due to term limits.

Senate Majority Leader Steven Horsford, D-Las Vegas, scored the highest among Democrats at 35.55 percent, and Assemblyman Lynn Stewart, R-Henderson, scored the lowest among Republicans at 43.98 percent.

Lawrence said the group’s 2009 report card reflected higher scores for some Democrats over Republicans. This session party affiliation and ideology went more hand-in-hand, with Republicans as a group acting in a more fiscally conservative way, he said.

Settelmeyer said he appreciates the types of pro-business measures included in the NPRI analysis.

“They tend to reflect the business friendly community that we’re trying to promote in the state of Nevada,” he said.

Roberson said he is pleased with the high grade from a group that supports free market approaches to education and fiscal policy. But he is disappointed at the level of reform finally approved by the Legislature to end the session.

“I don’t think the reforms were nearly as far reaching as I would like to see,” he said. “The governor proposed some really great education reforms that didn’t even get a vote taken.”

With Democrats in control of both houses, Republicans will focus on winning majorities in the next election cycle, Roberson said. The freshman lawmaker will head GOP efforts to win the Senate majority in 2012.

In addition to votes on several education reform measures and the budget, including a tax package that extended 2009 revenue hikes set to sunset June 30, other examples of bills used in the evaluation included a proposal to charge a fee on auto insurance policies to create a subsidized program for low-income residents of Clark County, and a measure to subsidize the development of wind and solar power.

The auto insurance measure passed the Assembly but never saw a vote in the Senate. The subsidy bill was vetoed by GOP Gov. Brian Sandoval.

The grading system is adapted from one used by the National Taxpayers Union to grade Congress. The NTU methodology allows bills of greater significance to be weighted accordingly. Lawrence said NPRI adapted the grading system to include such elements as education reform.

The 2011 session was one where Sandoval and many Republicans were adamantly opposed to new taxes, with many Democrats pushing for new or increased revenues to further fund public education and other programs.

This paradigm shifted after the Nevada Supreme Court rejected the Legislature’s taking of $62 million from a Clark County water quality fund in the 2010 special session. Sandoval and some lawmakers expressed concern about the legality of using other local funds proposed as part of the new 2011-13 general fund budget that takes effect this Friday.

The ruling led to an agreement to extend the taxes set to sunset, but a number of reforms, including several to public education, were made part of the agreement. Payroll taxes for the states’ small businesses were also eliminated.

Lawrence said some of the reforms passed in the session on their own merits are more significant than those included as part of the budget and tax deal.

He cited the performance-based budgeting bill sought by Assemblywoman Debbie Smith, D-Sparks, another measure expanding empowerment schools and a third strengthening the charter school process as examples of legislation that could have far reaching consequences.

Of the reforms included in the budget deal, Lawrence said: “It is arguable that Sandoval and legislative Republicans would not have been able to secure the education and labor reforms they received had they not reversed their position and embraced taxes. However, each of the reforms had merit on its own and should not have required an 11.5 percent increase in the overall state tax burden for lawmakers to consider its passage. Time will tell if the deal was worth its price.”

Audio clips:

Geoffrey Lawrence of NPRI says the most important reforms are unrelated to the budget deal:

062811Lawrence1 :06 the budget deal.”

Lawrence says the reforms that are part of the budget deal will have to be evaluated long term:

062711Lawrence2 :10 they actually materialize.”

Assemblyman Tick Segerblom says he voted the way his constituents wanted him to vote:

062711Segerblom1 :10 wanted me to.”

Sen. Michael Roberson says he is disappointed with the level of reforms approved in the 2011 session:

062711Roberson1 :16 a vote taken.”

Roberson says the GOP goal is to win majorities in both houses of the Legislature:

062711Roberson2 :19 in the Legislature.”

Sen. James Settelmeyer says he appreciates NPRI’s bill priorities:

062711Settelmeyer1 :21 get more jobs.”

Settelmeyer says some of the measures approved this session will likely have to be re-evaluated next session:

062711Settelmeyer2 : 14 of an idea.’”



Nevada 49th Lowest In Tax Burden, But 28th In Tax Collections, New Study Says

By Sean Whaley | 3:12 pm February 25th, 2011

CARSON CITY – Nevada residents bear the second lowest state and local tax burden of any state at 7.5 percent, behind only Alaska at 6.3 percent, according to a new report from the Washington, D.C.-based Tax Foundation.

But an analyst for a conservative Nevada think tank says the state’s tax collections are near the national median, and any suggestions by some policymakers that residents should pay more to fund government programs are not borne out by the study.

Nevada has consistently ranked in the top five least taxed states since the foundation first began reporting the data nearly two decades ago.

Residents of New Jersey, New York and Connecticut paid the highest state and local rates in the nation in fiscal year 2009, giving up 12 percent or more of their incomes to the tax collector, the study found.

The report also analyzes the taxes paid by residents of one state but collected in another, such as California residents who visit Nevada to gamble.

Not surprisingly, it shows Nevada collects much of its tax revenue from out-of-state visitors.

As the study points out: “Major tourist destinations like Nevada and Florida are able to lower their residents’ burden to the state by taxing tourists, who are likely to be non-residents. Nationwide, over a quarter of all state and local taxes are collected from non-residents.”

In Nevada, the state ranked 28th in terms of total state and local tax collections per resident, the report found.

But only $1,988 in taxes were paid by each Nevada resident. Another $1,799 in taxes per each Nevada resident were collected from non-residents. These two categories taken together put Nevada at the 28th place ranking in total state and local tax collections.

Geoffrey Lawrence, deputy director of policy at the Nevada Policy Research Institute, said the study clearly shows a low tax burden for Nevada residents, but a level of tax revenue that is near the median of the 50 states. The report for 2009 also does not include the major tax increases approved by the 2009 Legislature for the current two-year budget.

The 2009 tax increase will expire on July 1, 2011, unless extended by the Legislature. Gov. Brian Sandoval is opposed to any such extension and has voted to veto any tax increase approved by lawmakers.

“Regardless of who bears the burden of taxes, lawmakers still have the money to spend,” Lawrence said. “Not including the largest tax hike in Nevada’s history, the Tax Foundation report still shows that Nevada has more money to spend per capita than 22 other states. As this report proves, in terms of tax collections, Nevada is not a ‘low-tax’ state.”

Even so, some Nevada lawmakers are citing the study as proof that Nevadans are under-taxed, he said.

“So when you talk about government being somehow underfunded in Nevada, I just don’t see how that really is the case,” Lawrence said. “I would agree that a lot of funds are spent inefficiently here in Nevada.”

Sandoval has submitted a $5.8 billion general fund budget that he says contains no new taxes or fees, but some of his funding alternatives, such as shifting the cost of programs to local governments, have been criticized by lawmakers, county governments and school officials.

Lawmakers who convened Feb. 7 for the 2011 session have also heard testimony on the many program cuts in Sandoval’s budget, and the consequences of those spending reductions on everything from mental health needs to higher education.

Sandoval has said he does not want to increase the tax burden on residents or struggling businesses. Job creation is the way for Nevada to grow out of its current financial difficulties, he has said.

Audio clips:

NPRI analyst Geoffrey Lawrence says Nevada’s level of government funding is on par with other states:

022511Lawrence1 :09 you see elsewhere.”

Lawrence says Nevada government is not underfunded:

022511Lawrence2 :19 be better organized.”

Sandoval Administration Moves Forward With Priority-Based Budgeting Process

By Sean Whaley | 3:35 pm February 3rd, 2011

CARSON CITY – While there has been a lot of criticism directed at the details of Gov. Brian Sandoval’s proposed spending plan, there is acclaim for his development of a new budgeting process designed to ensure state agencies get results with taxpayer dollars.

The “Priorities and Performance Budget” completely changes the way the spending information is presented, said state Budget Director Andrew Clinger.

The single budget volume breaks out the spending for state agencies into activities, provides a ranking of the priority of the activities and where possible, includes measurements of how well objectives are met to achieve the goals of the spending priorities.

Clinger, in presenting the new budgeting format to lawmakers at a hearing last week, said much remains to be done to make the process complete, particularly in the use of “performance measures” to assess how well state agencies are meeting their goals. But it should help lawmakers in their budget review this session, he said.

“It really changes the discussion of the budget from looking at line items and talking about how many PCs (personal computers) or how many fax machines, and it really begins to look at what is it that we’re doing, what outcomes do we expect, and what are those outcomes costing us, and are we doing it in the most efficient and most effective manner possible,” Clinger said.

Senate Majority Leader Steven Horsford, D-Las Vegas, said he likes the new budget analysis.

“He (Clinger) did it without dollars and I think that’s great,” he said.

Efforts to change the way Nevada prepares its two-year budget have been attempted in the past. In 2009, outgoing Assembly Speaker Barbara Buckley, D-Las Vegas, pushed such a measure through the Legislature, but it was vetoed by former Gov. Jim Gibbons, who cited a failure to fund the cost of the effort.

The Legislature in this interim period then undertook its own fundamental review of budgets, many proposals which ended up in Sandoval’s two-year, $5.8 billion spending plan.

In his State of the State address, Sandoval said of the new budget process: “We articulate not only what level of priority each program or service carries, but the performance measures by which it will be judged. In the coming biennium, this initiative will expand to include public participation through websites and other tools as we ask Nevadans to further rank spending priorities. Even more robust performance indicators will therefore be established.”

The fundamental review was initiated under the direction of Gibbons as the 2011-13 budget was being developed this past summer. In a memo sent out by Clinger in June to agency officials, he outlined the new process: “We must create a budget process that looks first at the outcomes citizens expect. Some of the questions this new budget building approach needs to answer are: What is the proper role of state government? What services must we provide? What is the most efficient way to provide those services? And, what is the best way to pay for them?”

Horsford said he is pleased that Gibbons and Sandoval moved forward with the new review process.

“I’m glad that they followed through with the legislative intent as we passed it in 2009,” he said.

The Nevada Policy Research Institute, in a report released last month, called Nevada’s traditional budget process broken and called for fundamental change to bring about reasonable spending and improved performance in public education and other government services.

Geoffrey Lawrence, deputy director for policy at the free market think tank, said Nevada’s current “baseline” budgeting process, where every program is carried forward every two years with spending increases factored in for inflation or caseload growth, helped bring the state to its current financial crisis.

Lawrence described the new budget method outlined by the Sandoval Administration as not perfect, but offering a “refreshing departure from many poor budgeting practices of the past.”

He called it the first performance-based executive budget in Nevada history.

But it does have one shortcoming, Lawrence said.

“Sandoval fails to enumerate policy objectives in terms of priority,” he said. “Instead, government programs are lumped together in categories labeled ‘high,’ ‘medium’ and ‘low’ priority. Oddly, Sandoval’s budget team only put $143,914 of general fund spending in the ‘low’ priority category — while everything else received a ‘medium’ or ‘high’ priority demarcation. This reluctance to establish a clear-cut and meaningful hierarchy of spending undermines the value that this new approach adds.”

Audio clips:

State Budget Director Andrew Clinger says the new budgeting process provides more useful information:

020311Clinger1 :17 for those activities.”

Clinger says it changes the discussion of the budget from line items to outcomes:

020311Clinger2 :19 effective manner possible.”

Clinger says the new budget process helps prioritize agency activities:

020311Clinger3 :11 agency is performing.”

Senate Majority Leader Steven Horsford says he is glad Clinger followed through with the new budget review process:

020311Horsford :07 it in 2009.”

Nevada Think Tank Says Fundamental Budget Reform Needed

By Sean Whaley | 2:00 am January 20th, 2011

CARSON CITY – Nevada’s budget process is broken and needs fundamental change to bring about reasonable spending and improved performance in public education and the delivery of other government services, a free market think tank says in a new report.

The report, released today by the Nevada Policy Research Institute, says Nevada needs to move to performance-based budgeting. Policy makers also need to give agency administrators more authority over spending in exchange for measurable performance improvements.

Nevada’s current “baseline” budgeting process, where every program is carried forward every two years with spending increases factored in for inflation or caseload growth, has helped bring the state to its current financial crisis, says Geoffrey Lawrence, deputy director for policy at NPRI and author of the report, “Better Budgeting for Better Results.”

The current process has generated spending requests from agencies totaling $8.3 billion for the upcoming two-year budget even though general fund revenues are projected to bring in only $5.3 billion.

Lawrence says in the report: “. . . an inherent flaw in the baseline budgeting method is that it incorporates an implicit assumption of perpetual spending increases for all programs, even if they’re obsolescent, and even during years when revenue growth is insufficient to fund those assumed increases.”

“If lawmakers adopt the more aggressive reform proposals offered here, they will realize more than $3.5 billion in potential savings through simple changes in policy design or implementation measures – and do so without negatively impacting the quality of government services,” he says.

Gov. Brian Sandoval said Wednesday he had not seen the NPRI study but that he embraces the concept of performance-based budgeting. Just rolling up costs on existing programs every two years doesn’t work, he said.

“That’s part of the reason where this budget deficit figure came from,” he said.  “You’re going to see a different approach with regard to . . . performance indicators that I think will be refreshing.”

Despite the gulf between budget requests and revenue reality, Sandoval has said he will balance the state general fund budget without tax or fee increases. But increased fees for college students, which would have to be approved by the Board of Regents and which the NPRI report supports, and the use of some local taxes to fund state programs, are expected to be part of his budget solution.

Sandoval will unveil his budget on Monday in his state-of-the-state address.

Assembly Speaker-elect John Oceguera, D-Las Vegas, had not yet reviewed the NPRI report either. But in an email statement provided via his office, Oceguera said all workable ideas are welcome to help solve the state’s financial problems.

“At this stage of the process we can’t rule anything in or out,” he said. “We have to see what the governor proposes. We have to take a close look at the budget and figure out what’s working and what’s not working. We have some big decisions to make.”

While moving toward the objectives outlined in the NPRI report would require the Legislature to give up some of its broad authority over how agencies and the education system spend their tax dollars, other states have done just that, Lawrence said.

Both Washington state and Iowa have implemented budgeting reforms under Democratic leadership, he said. Nevada’s Legislature is controlled by Democrats. Sandoval is a Republican.

“All lawmakers should be able to get on board with that because what they perceive as priorities may differ, but everyone wants to know that when you allocate funding towards a specific project that you are going to get results for it,” Lawrence said.

In the report, Lawrence says performance-based budgeting was developed by Washington Gov. Gary Locke and resulted in a general fund spending reduction of $2 billion.

This new budgeting process would require lawmakers to identify a prioritized list of broad policy objectives, agree on the proper methods for evaluating progress to the objectives and tie funding to successful achievement of the objectives.

Lawrence says one method of getting state administrators to embrace this process is to use Iowa’s “Charter Agency” model, where officials are charged with meeting performance goals in exchange for greater flexibility in how they spend their funds.

Under this model, an agency director might chose to use the services of a private-sector payroll company than the state Personnel Department, he said.

“There definitely is a case to be made that the incentive structure within the bureaucracy needs to be changed significantly in order for government to more efficiently realize the Legislature’s own priorities,” Lawrence said.

Many of the specific recommendations contained in the report are likely to get a mixed reaction from lawmakers, such as ending the class-size reduction program in the lower elementary grades and eliminating all-day kindergarten in Clark County. The study says the programs have not resulted in improved student performance.

The proposal also recommends changing Nevada’s collective bargaining law to allow local governments to reduce public wages to bring them more in line with the private sector. This one proposal would account for much of the savings identified in the report, anywhere from $656 million to $2.7 billion.

Still other suggestions, such as establishing a tax credit program for private school tuition that the study suggestions could save $1 billion over a decade, would require major legislation.

Lawrence said these are just suggestions for lawmakers as they begin the 2011 session, and that the change to the budgeting process, with other accompanying reforms, are the focus of the report.

“Nevada lawmakers should approach the 76th legislative session knowing that a wide range of options are available that would allow them to improve the efficiency with which state services are delivered,” Lawrence said.

Audio clips:

Geoffrey Lawrence of NPRI says the budget reforms in the report should be welcomed by all lawmakers:

012011Lawrence1 :25 Legislature’s own priorities.”

Lawrence says state agencies need incentives to improve:

012011Lawrence2 :16 results for it.”

Gov. Brian Sandoval says the current budget process has helped create the budget gap:

012011Sandoval1 :06 figure came from.”

Sandoval says he is pursuing improved budget performance indicators:

012011Sandoval2 :10 will be refreshing.”

New ‘Piglet Book’ Cites Wasteful Spending By Nevada State And Local Government Agencies

By Nevada News Bureau Staff | 5:27 pm September 30th, 2010

Nevada’s state and local governments have wasted millions of taxpayer dollars over the past two years through lavish and wasteful spending – in some cases by outright theft – according to a new study from the Nevada Policy Research Institute (NPRI) and Citizens Against Government Waste (CAGW).

The report, titled “The Nevada Piglet Book 2010” and authored by NPRI fiscal policy analyst Geoffrey Lawrence, details what he calls numerous examples of government waste over the past two years, including credit-card abuse, a sweetheart land deal for a former Las Vegas city councilman and local governments spending millions of dollars to lobby the state legislature.

“Contrary to the cries over the past two years that all levels of Nevada government have been ‘cut to the bone,’ this report reveals that government waste and inefficiencies are widespread,” Lawrence said. “What’s worse is that the millions of dollars in waste revealed in this report are likely just the tip of the iceberg.”

The study’s findings resulted from hundreds of public records requests to state and local governments and a review of dozens of city, county and state audits. The study reveals that many wasteful practices that NPRI documented previously in “The Nevada Piglet Book 2008” continue even today – despite politicians’ pledges to be more responsible with public money.

Among the questionable spending identified in the report are high public employee salaries and benefits, particularly for many firefighters who work in Southern Nevada, the failure of several agencies to perform their assigned tasks and inappropriate purchases by individual public employees.

The report also highlights the costs incurred by local governments to lobby the Legislature. During the 2009 session, Nevada local governments spent $3.2 million to lobby lawmakers in Carson City over a four-month period, including $951,324 spent by county governments, $1,061,473 spent by cities, and $509,337 spent by school districts. Special districts, such as the Southern Nevada Water Authority, also spent $618,191 on lobbying.

Erik Pappa, director of public communications for Clark County, said in response that county has changed its practices regarding lobbying the Legislature.

“We are no longer using paid lobbyists,” he said. “We rely upon county staff to provide information to state legislators.”

Lawrence said government agencies need to be more transparent.

“Until all levels of government become more transparent and put their spending checkbooks online for citizens to examine, as other states already have done, this type of waste will continue,” he said.

Lawrence noted that since the Texas Comptroller’s Office began putting itemized expenditure data online in 2007, Texas taxpayers have realized $51 million in cost savings simply by identifying areas of wasteful or inefficient spending.

The state of Nevada has posted much of its spending information for public review.

“The Nevada Piglet Book 2010 barely scratches the surface of the mountain of taxpayer dollars wasted by Nevada’s state and local government bureaucracies,” said Tom Schatz, president of Citizens Against Government Waste. “Nevadans deserve a more fiscally responsible and transparent state government. From sweetheart deals for local politicians to exorbitant salaries for government employees, there is plenty of fat that can be trimmed.”

The Nevada Policy Research Institute is a free-market think tank that seeks private solutions to public challenges facing Nevada, the West and the nation. Citizens Against Government Waste is a Washington, D.C.-based non-profit organization dedicated to eliminating waste, mismanagement and inefficiency in government.

Support, Questions, Rejections Follow Call To Broaden Nevada Tax Base Using Expanded Sales Levy

By Sean Whaley | 1:15 pm June 3rd, 2010

CARSON CITY – A proposal to simplify, broaden and stabilize Nevada’s tax base by expanding and reducing the sales tax to include services from haircuts to legal advice is generating some support and plenty of questions from lawmakers and interest groups.

The proposal, presented Tuesday by Geoffrey Lawrence of the Nevada Policy Research Institute, would be revenue neutral and would lower the 6.85 percent state sales tax rate to 3.5 percent. As part of the proposal, the insurance premium tax and the payroll tax paid by businesses would be eliminated as well.

The NPRI proposal would even include food purchases as taxable items, but would also provide tax relief to residents up to the federal poverty line.

One potential challenge to the proposal is that voter approval might be required depending on how such a plan was drafted.

Lawrence, a fiscal policy analyst for NPRI, said his plan is intended to counter what is expected to be a call for a broad-based business tax by at least some members of the Legislature in 2011.

Lawmakers are facing a $3 billion shortfall and are awaiting a study of their own on how to respond to the anticipated revenue shortfall. The study by Moody’s Analytics funded by the Legislature’s Interim Finance Committee is due to lawmakers later this year.

Lawrence said his plan would stabilize and broaden Nevada’s tax base without further burdening Nevada’s taxpayers, and would also “strengthen our economy by eliminating the job-killing modified business tax.”

The NPRI study found that a corporate income tax is actually one of the least stable tax instruments available to state governments, and is significantly less stable than any tax instrument currently employed in Nevada. Adding a corporate income tax would therefore make the state’s tax structure more, not less, volatile, Lawrence says in his  report titled, “One Sound State, Once Again: Comprehensive fiscal reforms to again make Nevada strong, prosperous and free.”

The study also calls for spending reforms, including a priority-based approach to budgeting and limits on spending increases tied to inflation and population growth.

Several lawmakers commenting on the report have questioned its usefulness given that it is revenue neutral at a time when the Legislature is anticipating a $3 billion hole in the next budget.

But the proposal is a long-term approach to resolving the state’s revenue and spending issues and is not meant to be a quick fix, said Lawrence. A broader sales tax would bring in increasing revenues at the 3.5 percent rate as the Nevada economy recovers.

Assemblyman Ed Goedhart, R-Amargosa Valley, said he likes the approach, which follows a flat tax model that he and many voters would support.

“I think most Americans are tired of all these loopholes and exceptions,” he said. “The twisting of tax regulations to benefit a powerful constituency or lobby.”

A straight 3.5 percent tax on consumption would be a stable form of revenue, Goedhart said. There should be no exceptions, he said.

His one objection to the proposal is the provision to provide tax relief to low income residents.

“The cost of government applies to everyone,” said Goedhart, a member of the Assembly Taxation Committee.

Goedhart said such a plan in Nevada could serve as a role model nationally and help generate support for a similar change to the federal income tax.

The Legislature also needs to impose spending controls and look at other reforms, from prevailing wage laws to meaningful changes to the state health insurance and public employee retirement plans, he said.

Assemblyman Tom Grady, R-Yerington, said the study contains valuable information the Legislature can use as it tries to resolve its budget problems next session. But details would have to be spelled out in legislation before any such proposal could win his support, he said.

There are a number of sales tax exemptions currently, such as the one for farm equipment purchases, said Grady, a member of the Assembly Taxation Committee. Surrounding states have exemptions for farm equipment and not offering the same here would put Nevada companies at a disadvantage, he said.

The NPRI research is solid and gives lawmakers a starting point for a tax discussion next session, Grady said.

Sen. Mike Schneider, D-Las Vegas, said the proposal as presented wouldn’t bring in more money even though the state is facing a major revenue shortfall. He also questioned whether such a major change to Nevada’s tax structure could be accomplished in the 120-day session when so many other pressing issues are also on the table.

Add in redistricting and all the new lawmakers in the Senate and Assembly and the task would be challenging, he said.

“It would be a major undertaking,” said Schneider, a member of the Senate Taxation Committee. “I just don’t think, with the way our session is designed, that we can get that work done.”

A special session would probably be the best way to tackle such an issue, but whoever is governor in 2011 probably won’t want to call lawmakers back in for such a task, Schneider said.

Assemblyman Paul Aizley, D-Las Vegas, questioned how a revenue neutral tax proposal would help solve the state’s budget problems. The budget for the next two years would typically be in the $6.5 billion range, but is expected to be about $3 billion short, he said.

In talking to voters, Aizley said he is asking what services they want protected and what cuts they are willing to accept. Most people wanted education protected, he said.

Aizley, a member of the Assembly Taxation Committee, said he would also need details of what services would be included in an expansion of the sales tax.

“People don’t know the implications,” he said. “I would not say yes to a services tax until it was spelled out what those services would include.”

Aizley also rejected the NPRI call for what he described as a “zero based” budgeting process for state agencies to use. It is time consuming and labor intensive to review every single program every two years when it is clear many programs will have to be continued, he said.

Assemblywoman Sheila Leslie, D-Reno, said it is encouraging that even a fiscally conservative group like NPRI is in agreement that the state needs to consider revising its tax structure. But any tax plan that is revenue neutral is not realistic given the $3 billion budget hole facing lawmakers next year, she said.

Leslie also suggested the proposal is not really broadening the tax base, since it is just expanding an existing levy to services such as haircuts or tax preparation.

“I don’t think it is broadening the tax base so much as it is taking out the volatility by taxing more things,” said Leslie, a member of the Assembly Taxation Committee.

By eliminating the payroll tax as part of the plan, it could be argued the tax base would actually be narrowed under the NPRI plan, she said.

“It would reduce the burden on business and increase the burden on the rest of us,” Leslie said. “I think the middle class already pays its fair share.”

The idea of taxing services has been discussed before, both in 2003 and 2009, she said. Such proposals always run into roadblocks when the groups to be included in the tax object, Leslie said.

Assemblywoman Peggy Pierce, D-Las Vegas, said she welcomes NPRI to the tax discussion, noting that for a long time the conservative voices in Nevada have suggested that no changes are needed.

But Pierce, who also serves on the Taxation Committee, said sales taxes are regressive and the state already has one of the most regressive tax systems in the nation.

“Making our tax system more regressive is not an improvement,” she said. “I’m not entirely opposed to looking at a sales tax on some services, but not as a substitute for a broad-based business tax.”

Nevada needs to look at how other states that adequately fund their programs and services raise tax revenue and then model itself after those states, Pierce said.

Carole Vilardo, president of the Nevada Taxpayer’s Association, said the proposal needs a great deal of fleshing out so that policymakers can know the implications of what such a change would mean to the state’s tax structure.

Any change to one portion of the sales tax rate, the 2 percent that goes to the state general fund, would need voter approval, she said. Vilardo also questioned whether such a proposal could have an effect on those portions of sales taxes pledged to pay off bonds.

“When you talk taxes, the devil is in the details,” she said.

Lawmakers Begin Selection Process for Revenue Study Stakeholder Group

By Sean Whaley | 1:20 pm October 20th, 2009
CARSON CITY – State lawmakers made the first step towards creating a “Nevada Vision Stakeholder Group” of residents to participate in a review of the state’s revenue structure today, declaring that the size of the panel will be no more than 19 individuals.

But the hard part is yet to come. A total of 72 names have been submitted to lawmakers so far to serve on the panel, and more are expected before nominations close Oct. 30.

Lawmakers charged with picking the members of the committee will meet again Nov. 16 in an effort to finalize the stakeholder group membership, which will represent areas of expertise from education and public safety to commerce and industry.

A list of nominees was released today, showing interest from a wide variety of individuals, from Frank Adams representing the Nevada Sheriffs’ and Chiefs’ Association to Reno Mayor Bob Cashell to MGM Mirage executive Alan Feldman.

Sen. Randolph Townsend, R-Reno, suggested the group not include elected officials for fear the work of the panel would become politicized.

But Assemblyman Pete Goicoechea, R-Eureka, said many potentially qualified candidates would be excluded if elected officials were not allowed to participate.

The panel decided to let each lawmaker submit a list of preferred names without mandating any exclusions.

Geoffrey Lawrence, a fiscal policy analyst with the Nevada Policy Research Institute, questioned the purpose of the stakeholder panel. A study of the state and local government tax structure with an eye toward reducing volatility and maximizing efficiency has merit, he said.

But the stakeholder group is proposed to be drawn from the five major areas of state spending, meaning any revenue study could be compromised, Lawrence said.

“The group’s recommendations will likely include new government spending proposals,” he said.

The panel should include representatives who support private sector involvement in the provision of public services. Any stakeholder group needs to consider truly innovative solutions and not just seek to burden Nevadans with higher taxes, Lawrence said.

The stakeholder group is expected to work closely with the contractor selected to perform the revenue study, which must be completed by July 1, 2010. Lawmakers have selected four proposals for further consideration but a final decision won‘t come until next month. The budget for the study is $500,000 but some of the proposals have come in well below this amount including the favorite by Moody’s Analytics at a cost of $253,000.