Posts Tagged ‘NPRI’

Business Margin Tax Initiative Petition Filed, Legal Challenge Expected

By Sean Whaley | 12:44 pm June 6th, 2012

CARSON CITY – A business margin tax initiative petition filed with the Secretary of State’s office won’t see signature gathering efforts start right away because a legal challenge to the proposal is expected, a teachers union official said today.

But Lynn Warne, president of the Nevada State Education Association, who filed the petition to establish the tax that would bring in $800 million a year from large Nevada corporations, said it is expected to withstand any legal scrutiny. The language has been vetted by several attorneys, including association attorney James Penrose, she said.

“We usually go through about a month looking for any kind of legal challenges,” Warne said. “We expect that there will be some coming.”

NSEA President Lynn Warne answers questions about the margin tax proposal filed today. / Photo: Nevada News Bureau.

Even with delays due to legal efforts to derail the proposal, there will be no difficulty in collecting more than enough signatures from registered voters by November to put the proposal to the Legislature in 2013, she said. The Legislature has 40 days to approve the proposal or it goes to the voters in 2014.

Called the “Education Initiative”, the actual language implementing the 2 percent tax on companies making gross revenues in excess of $1 million a year is 32 pages long.

Penrose said the mining industry would be required to pay the tax the same as other businesses. The gaming industry would pay the tax on non-gaming revenue, such as hotel operations.

Warne said a number of groups have expressed interest in joining with the teachers and the AFL-CIO in supporting the measure, which she said will created a broad-based business tax that will ensure public education won’t face further cuts to programs or require teacher layoffs.

While complex, Warne said she expects voters will support the margin tax proposal in 2014 should the Legislature fail to act.

“We believe that they (voters) are looking for a fair, broad-based tax but they are looking for funding for schools, for kids, to make sure Nevada moves off the bottom in per pupil expenditures,” she said.

If the tax proposal is approved by the Legislature in 2013, the liability would begin in 2014 with the first collection due in January 2015. If approved by voters in November 2014, the liability would begin in 2015 with the first collection due in January 2016.

Warne said the proposal relies on the Texas margin tax, and Assembly Bill 582 of the 2011 Nevada legislative session, for its implementation.

If implemented, the tax revenue would flow to the state general fund and not be earmarked for public education, but Warne said the revenue pie would expand and provide more money for the public schools.

“The Legislature will fund education as they deem appropriate,” she said. “There will just be more revenue for them to be able to appropriate to education. We hope they do so properly.”

While the language has just now been filed explaining how the tax would be levied, the proposal has already come in for  criticism from a number of sources.

Gov. Brian Sandoval said he opposes the tax and said tax policy discussions need to be considered by the Legislature, not at the ballot box.

Las Vegas businessman Monte Miller, who earlier this year proposed petitions to raise both the gaming and mining tax, called the margin tax a “destructive, terribly complex tax.” Miller had filed his proposals as a way to offer voters alternatives to a margin tax, which he anticipated would be sought by teachers, He dropped his efforts in April.

The Nevada Policy Research Institute has also criticized the tax. Geoffrey Lawrence, deputy policy director at NPRI, said in a statement issued Tuesday that a margins tax would be a “disaster” for Nevadans.


Audio clips:

NSEA President Lynn Warne says she believes voters will support the tax if asked to do so:

060612Warne1 :25 per pupil expenditures.”

Warne says the money will go to the general fund but that public education should benefit:

060612Warne2 :09 do so properly.”

Warne says the association will wait at least 30 days to collect signatures because legal challenges are expected:

060612Warne3 :11 are seen through.”


2011 Public Employee Salary Data Shows Nearly 1,000 Workers In The $200K Club

By Sean Whaley | 2:00 am April 4th, 2012

CARSON CITY – Nearly 1,000 state and local government workers, many of them firefighters and police, make over $200,000 a year when all pay and benefits are counted, according to a 2011 pay analysis published today by the Nevada Policy Research Institute.

The number of public employees earning $200,000 or more could be even higher, but the conservative think tank said some government entities, including the cities of Reno and Henderson, the Washoe County School District and the state of Nevada, did not provide information on the cost of benefits.

A Nevada think tank has added 2011 public employee salary information to its website.

There were 932 public employees who hit the $200,000 mark in 2009, 1,174 in 2010 and 995 in the most recent data now available at Transparent Nevada.

The top salary spot in Nevada is held by William Zamboni with the Nevada System of Higher Education’s School of Medicine at $1.3 million in 2011, although much of his earnings are the result of income from his medical practice.

Las Vegas Police Department Assistant Sheriff Michael McClary earned nearly $545,000 in total compensation, according to the data provided to NPRI, while Chris Ault, football coach at the University of Nevada, Reno, earned $521,000.

Andy Matthews, president of NPRI, said that giving the public and policy makers access to the salary information helps ensure that critical data needed to make spending decisions is available for review by everyone.

Taxpayers can use the data to determine on their own if government officials are being responsible with public money, he said.

Despite claims that government budgets are already stretched thin, the salary data suggests otherwise, Matthews said.

“There are still a lot of instances of overspending, and abnormally high government salaries at various levels of government here in our state, and this at a time when so many of us in the private sector are hurting, and Nevada’s families and business owners and individuals are really struggling,” he said. “I think it’s really a reminder that we have a ways to go still in terms of reigning in excessive government spending.”

A lot of the high salaries are at the local government level. Examples include a Clark County fire captain who brought in more than $525,000 in total compensation in 2011 and a University of Nevada, Las Vegas, English professor who received more than $326,000 in total compensation.

There are 145 Las Vegas Police Department employees who earned more than $200,000 last year, and another 59 police and correction officers in North Las Vegas who exceeded $200,000 for the year.

A lot of the salaries need to be scrutinized, Matthews said.

“For example the base pay of the city clerk in North Las Vegas is more than $145,000,” he said. “Well, the base pay for Gov. Sandoval is just a little more than $143,000.”

Matthews said there is some good news in the 2011 data that suggests elected officials are responding to concerns about public salaries, particularly with firefighter salaries.

The number of firefighters earning more than $200,000 declined in 2011 compared to 2010, he said. For example, the number of Clark County fire fighters in that salary level came down from 199 in 2010 to 140 in 2011.

“I would say these numbers are still too high but at least represents some steps in the right direction,” Matthews said. “And I think that the fact that we at NPRI have started to publicize this information and make this known; I think that that certainly has played a role.”


Audio clips:

NPRI President Andy Matthews says there is still evidence of excessive public salaries:

040512Matthews1 :23 excessive government spending.”

Matthews says the base pay of the North Las Vegas city clerk is higher than that for Gov. Brian Sandoval:

040412Matthews2 :12 more than $143,000.”

Matthews says there has been some improvement in reducing high salaries:

040412Matthews3 :16 played a role.”



Nevada Think Tank Files Notice Of Appeal With Supreme Court In Separation Of Powers Case

By Sean Whaley | 11:16 am March 27th, 2012

CARSON CITY – A conservative Nevada think tank today filed its notice of appeal to the state Supreme Court in its separation of powers case challenging the ability of state lawmakers to also work in public sector jobs.

The Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation filed the notice in Pojunis v. State of Nevada, et al. – a case which it says could fully restore the separation-of-powers clause found in Article 3, Section 1, of Nevada’s constitution.

Attorney Joseph Becker, left, and his client William Pojunis, take questions after filing a separation of powers complaint against Sen. Mo Denis in November. / Nevada News Bureau file photo.

The lawsuit was filed in November 2011 against Sen. Mo Denis, D-Las Vegas, who at the time also worked as a computer technician with the state Public Utilities Commission. Denis left state employment to work in the private sector about the same time and a Carson District judge dismissed the action for being moot.

Joseph Becker, chief legal officer and director of CJCL, said the case should proceed despite Denis leaving public sector employment, arguing the important legal principle should be reviewed by the courts.

“. . . we believe strongly that this case meets the ‘Public Interest’ exception to the mootness doctrine and should be allowed to proceed,” he said.

The lawsuit was filed on behalf of Las Vegas resident William Pojunis on Nov. 30, 2011. Pojunis said at the time he was unemployed and was qualified for Denis’ position and wanted to apply for the job.

In his district court filing seeking dismissal, Denis’ attorney said case law shows that Nevada courts only decide “cases that present live controversies.”

“Courts will not retain jurisdiction where ‘a live controversy becomes moot by the occurrence of subsequent events,’ and ‘will not make legal determinations that cannot affect the outcome of the case,’ ” said Denis attorney Bradley Schrager.

Gov. Sandoval Will Extend Sunsetting Taxes Into Next Two-Year Budget To Avoid Education Cuts

By Sean Whaley | 2:17 pm March 13th, 2012

CARSON CITY – Gov. Brian Sandoval said today he will propose to extend a package of taxes now set to expire in June 2013 into the next budget to avoid further cuts to education, which he said cannot withstand further reductions.

To maintain a basically flat spending plan for the two-year budget that will begin on July 1, 2013, Sandoval said the modified business tax that was maintained at a higher rate for large businesses in the 2011 legislative session, along with a small increase in the sales tax, must be continued.

Gov. Brian Sandoval. / Nevada News Bureau file photo.

The 2011 tax package also eliminated the business tax for 115,000 small Nevada businesses which would continue into the next budget as well.

“We’re going to keep them,” Sandoval said of the sunsetting taxes. “Again, my baseline is this: I’m not going to cut education, and that includes K-12 and higher ed. I am not going to reduce services for the most vulnerable people in our society.

“I’m not going to pit kindergartners against senior citizens,” he said. “I’m not going to pit higher ed students against people that need essential services.”

This preliminary recommendation for beginning the budget process for the 2013 legislative session could be modified as the state’s fiscal picture becomes clearer in the coming months, Sandoval said.

“We’re going to be having many conversations between now and when the final budget is presented to the Legislature,” he said. “I believe at this point in time, which is very early, it is the responsible thing to do for the future of the state of Nevada.”

Sandoval said an expanding Medicaid caseload, along with costs associated with the expansion of the program under the federal health care law, will consume any revenue increases. Because of this, failing to include the sunsetting taxes for budget planning purposes would mean cuts to education.

“In addition to avoiding further cuts to education, this decision means there will be no need for tax increases in the next session,” Sandoval said. “Nevadans will pay no more than they are in the current biennium. The budget building process remains ongoing, but we must begin today.”

Efforts are under way to circulate petitions to put possible tax increases before the voters, including measures that could lead to hikes in both mining and gaming taxes. A gross margin tax on business is also being considered by labor groups and teachers but no ballot measure has been filed yet.

Sandoval made the announcement to the capitol press corps after a meeting of the Board of Examiners. He said his intention with the announcement is to be transparent.

Sandoval strongly opposed continuing the tax increases approved by the 2009 legislature in the 2011 session, but ultimately agreed to do so after a Nevada Supreme Court ruling threw his proposed budget into financial disarray.

The 2013-15 budget planning process begins Thursday with a briefing by state Budget Director Jeff Mohlenkamp to state agencies and representatives of public and higher education.

Today’s announcement was immediately welcomed by some Republican lawmakers.

Sen. Michael Roberson, R-Las Vegas, who is expected to lead the Republican Senate caucus in the 2013 legislative session, said he supports Sandoval’s preliminary budget instructions.

“I support Gov. Sandoval and his budget instructions that will not impose new taxes on the people of Nevada,” Roberson said. “I will continue to lead the fight against new tax increases while working with Gov. Sandoval to improve public education. I will not support additional cuts to public education.”

Roberson opposed extending the sunsetting taxes in the 2011 session, arguing that the Nevada Supreme Court ruling did not create the huge financial hole in the budget that others had suggested.

“Gov. Sandoval has outlined a prudent and fiscally responsible preliminary budget framework,” Roberson said.  “I am grateful for his tremendous leadership. I will stand with him and support him.”

Sen. Ben Kieckhefer, R-Reno, announced his support for Sandoval’s proposal via Twitter.

“I applaud the decision by Gov. Sandoval to do what is necessary to protect education from cuts,” he said, adding that what that means in the 2013 session is yet to be determined.

Nevada Senate Democrats issued a statement saying they “applaud” the change of position by Sandoval and Republican lawmakers but that the proposal is an insufficient short-term fix.

“What we need are long-term solutions to resolving our budget problems, not postponing them for another 2 years,” said Sen. Mo Denis, D-Las Vegas. “We must address tax fairness for middle class families, cut wasteful spending in our government, and provide Nevada business with an educated workforce that can help compete in the national and global marketplace.

“In order to diversify our economy and attract new businesses and industry to Nevada, we must show them we are serious about investing in a well educated workforce,” he said. “We can’t do that if education funding remains stagnant.”

Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, criticized Sandoval’s announcement in a statement:

“Taxpayers lose again with Gov. Brian Sandoval’s decision to propose extending the so-called ‘sunset’ taxes,” he said. “This demonstrates, once again, the danger behind the concept of a ‘temporary’ tax increase. Once bureaucracy becomes dependent on that additional revenue to sustain itself, the tax increase rarely goes away.

“In 2010, Gov. Sandoval stated that raising taxes is ‘the worst possible thing you can do’ after a recession,” Lawrence said. “His statement is as correct today as it was then – raising taxes on job creators is exactly the wrong thing to do in the aftermath of a recession.”

Sandoval said the spending will also be prepared using the new approach of performance-based budgeting.


Audio clips:

Gov. Brian Sandoval says he will keep the sunsetting taxes in his budget to avoid cuts to education:

031312Sandoval1 :14 in our society.”

Sandoval says he won’t pit kindergarteners against senior citizens:

031312Sandoval2 :12 need essential services.”

Sandoval says at this point in time it is the responsible thing to do:

031312Sandoval3 :12 state of Nevada.”


Conservative Nevada Think Tank Publishes Sourcebook For Policymakers And Public

By Sean Whaley | 2:00 am March 1st, 2012

CARSON CITY – A conservative Nevada think tank today published a guide for policymakers and the public on issues ranging from the state spending to public education to tax policy.

The 88-page sourcebook, called “Solutions 2013” is a compilation of research and policy recommendations from the Nevada Policy Research Institute addressing 39 different subject areas.

The publication comes 11 months before the Nevada Legislature will convene in 2013 to consider a host of critical issues, and just as the 2012 election season gets officially under way with candidate filing set to begin Monday.

“This collection dispels many popular misconceptions about Nevada, while highlighting new approaches to policy making,” said NPRI President Andy Matthews in an introduction to the guide. “My hope is that, regardless of where your political sympathies may lie, you will consider these ideas on their merits.”

Geoffrey Lawrence, NPRI’s deputy policy director, said even those who disagree with the recommendations can use the data cited in the guide.

“I think this is valuable for everyone who is interested in public policy regardless of their particular political persuasions because there is a lot of objective data in there that you can draw your own conclusions from if you like,” he said. “I think one of the other values of it is that you can see that our conclusions are drawn straight from these objective data sources so they are not just things that we’re coming up with out of thin air.”

The organization weighs in on the potential of a Texas-style margin tax being imposed on Nevada businesses, which it says should be rejected. A coalition of education and labor groups is contemplating putting such a revenue generator on the state ballot, but no such proposal has been filed yet with the Secretary of State’s office.

“The business margin tax is a hybrid, combining negative features of both corporate‐income and gross‐receipts taxes,” the policy guide says. It quotes the Tax Foundation as saying, “the Texas ‘margin’ tax is really a badly designed corporate income tax.”

The NPRI guide says a margin tax would create a tax liability even for businesses that operate at a financial loss, meaning the tax also possesses the negative attributes of gross receipts taxation.

The organization also takes up the issue of a state-run lottery, an idea that gets attention from lawmakers virtually every legislative session. NPRI notes that such lotteries do not generate a lot of revenue and are not stable sources of income.

California lottery ticket. / Photo: Bdviets via Wikimedia Commons.

“As Price Waterhouse – the Nevada Legislature’s own tax consultant – has concluded, ‘A state‐run lottery fails every test of a “good” tax policy. In Nevada, gaming should be left to the private sector,’ ” the guide says.

NPRI weighs in on the issue of what, if anything, should be done about the current public employee retirement system. Gov. Brian Sandoval and some lawmakers have called for a change to the plan to make it a 401(k)-style defined contribution plan instead of the current “defined benefit” plan so that concerns of the potential long-term liabilities of the retirement plan can be addressed.

NPRI argues for a hybrid plan as adopted by the Utah Legislature to avoid the high upfront costs associated with a wholesale change to a defined contribution plan.

“Utah’s system was put in place with the enactment of Senate Bill 63 from Utah’s 2010 General Legislative Session, which should serve as a model to guide Nevadans,” the policy guide says.


Audio clips:

Geoffrey Lawrence of NPRI says the Texas-style margin tax is a bad idea:

030112Lawrence1 :26 disadvantages to it.”

Lawrence says the NPRI policy guide has useful data regardless of a person’s political views:

030112Lawrence2 :29 of thin air.”


Separation Of Powers Lawsuit Aimed At Nevada Lawmaker Dismissed By District Court, Appeal Planned

By Nevada News Bureau Staff | 12:23 pm February 27th, 2012

CARSON CITY – A Carson City district judge has dismissed a lawsuit filed by a conservative Nevada think tank claiming that a lawmaker violated the state constitution’s separation of powers clause by also working as a public employee.

The lawsuit was dismissed because the lawmaker targeted in the case by the Nevada Policy Research Institute, Sen. Mo Denis, D-Las Vegas, left his job with the state Public Utilities Commission last year. He now works in the private sector.

Joseph Becker, chief legal officer and director of NPRI’s Center for Justice and Constitutional Litigation, said the decision will be appealed to the Nevada Supreme Court.

In dismissing the case, District Judge James Todd Russell said in a brief order filed Friday: “The Nevada Supreme Court has clearly held that it is, ‘Of course, the duty of every judicial tribunal is to decide actual controversies by a judgment which can be carried into effect, and not to give opinions upon moot questions or abstract propositions or to declare principles of law which cannot affect the matter in issue before it.”

The order was first reported today by Las Vegas Sun political columnist Jon Ralston.

NPRI had asked the court to proceed with the case even with Denis’ departure from state service, arguing the matter should continue as a matter of “widespread importance.”

In announcing the intent to appeal, Becker said: “The separation-of-powers clause in Nevada’s constitution is perfectly clear — a sitting state legislator is not allowed to exercise any functions in the executive or judicial branch of state government. This principle is foundational to Nevada’s government, and that’s why we strongly oppose the court’s decision to dismiss Pojunis v. State of Nevada, et al.

“Although Sen. Mo Denis resigned from his executive-branch employment within hours of being served with CJCL’s lawsuit — a de facto admission on the merits of the case — it is hard to imagine a case that better satisfies the ‘Public Interest’ exception to the mootness doctrine than this one,” he said.


Outpouring Of Appreciation And Respect From Nevadans For Legacy Of Late Sen. Bill Raggio

By Nevada News Bureau Staff | 3:12 pm February 24th, 2012

CARSON CITY – Here is a selection of comments made by Nevada public officials today following the announcement of the death of former state Sen. Bill Raggio:

U.S. Sen. Dean Heller: “I am deeply saddened by the death of Bill Raggio. There are no words to describe his dedication to the state of Nevada and I wish to express my deepest condolences and prayers for his wife Dale, and his family. Bill was a true statesman who dedicated his life to making Nevada a better place to live. His legacy will be remembered for generations to come.”

U.S. Sen. Harry Reid: “He always fought for Nevada and his invaluable contributions and service to our state will live on.”

Former Sen. Bill Raggio. / Nevada News Bureau file photo.

Assembly Speaker John Oceguera: “No one has ever loved this state more or had a more passionate desire to make things better for the people who live here. His ability to bring people together to get things done was legendary. At times, he may have been an adversary on a particular issue, but he was always a true leader, a teacher and a friend.”

Lt. Gov. Brian Krolicki: “He was a remarkable man, and I am honored to have been able to call him a mentor, a colleague and a friend. Bill was a true public servant and his sole agenda was simply to make Nevada a better place. He has left an unmatched political footprint upon our state, and the citizens will reap the rewards of this gifted and decent gentleman for many years to come.”

Rep. Shelley Berkley: “I was deeply saddened to learn of Bill Raggio’s passing. He was nothing short of a giant in Nevada politics and a fierce advocate for the state he loved, especially the north. His dedicated public service has improved the lives of thousands of Nevada families and his tireless work on higher education has left a permanent mark on this state.”

Nevada Attorney General Catherine Cortez Masto: “Bill was a great statesman whose political career began when he was elected as the Washoe County district attorney. He was a stellar prosecutor who valiantly protected the citizens of Northern Nevada. Bill will always be remembered for his impassioned service and dedication to the law enforcement community.”

Nevada Republican Party Chairman James Smack: “Today Nevada Republicans across the state mourn the loss of a great leader and the loss of an even greater friend. While it is a sad day for all Nevadans, it is only appropriate to remember the legacy and leadership he left behind for us to follow.”

The Nevada System of Higher Education: “Much will be said in the coming days and weeks about the lifetime of accomplishments of this giant of a man. However, for those of us in higher education, indeed the whole education community, we pause to thank this man who came from humble immigrant roots and rose to great power, in part by public education.”

Andy Matthews, president of the Nevada Policy Research Institute: “Those who have followed NPRI’s work over the years know that we have both agreed and disagreed with Mr. Raggio’s views on various policy issues. But there was never any doubt as to his love for Nevada and his commitment to making it a better place to live. For that, he will always have our respect and our admiration.”

The Nevada Senate Republican Caucus: “Sen. Raggio epitomized the term ‘public servant.’ As a district attorney and legislator, Sen. Raggio was committed to doing the right thing for the people of Nevada. He was a tireless advocate for higher education, believing that it was the gateway to a better life for any Nevadan. He will be missed greatly.”

Nevada Supreme Court Chief Justice Nancy Saitta: “Sen. Raggio was always a friend to the judiciary and often our champion. He clearly understood that a strong Nevada requires a strong and independent judicial branch of government. Sen. Raggio was an icon, a consummate statesman and one of the most knowledgeable and pragmatic legislators ever to serve the people of Nevada.”

Senate Secretary David Byerman:  “Today, the Nevada Senate has lost a paragon of eloquence. We will miss Sen. Raggio, but the Nevada Senate – an institution that Sen. Raggio loved – has been molded by his wit and wisdom forevermore.”

Nevada Think Tank Investigation Shows Clark County Residents Pay Millions To Fund Union Activities

By Sean Whaley | 2:00 am February 9th, 2012

CARSON CITY – A Nevada think tank investigation shows that Clark County taxpayers are contributing $4.6 million a year to fund union activities by local government workers.

The results of the investigation by Steven Miller and Kyle Gillis of the Nevada Policy Research Institute, published today in the Nevada Journal, identifies almost 70,000 hours of paid leave time made available each year by local governments to public employees to conduct union business.

Although top union officials are employees of the county or city governments, paragraphs in the bargaining agreements specify that those employees are to be released from their duties on behalf of taxpayers to instead work – while continuing to be paid by taxpayers – for private organizations, their labor unions.

The costs to taxpayers was calculated by reviewing 37 municipal labor contracts, contracts that are not easily accessible by the public.

“People are really going to be stunned when they realize that governments in Clark County, I mean the same governments that are facing fiscal challenges, are giving millions upon millions of dollars every year to union employees to work for the union,” said Victor Joecks, NPRI communications director. “I mean government certainly has a role in providing schools and public safety and roads, but it doesn’t have a role in subsidizing a private organization; doesn’t have a role in subsidizing these labor unions.

“Not only that, I think that it’s a perfect example of how kind of the union contracts with collective bargaining get out of control,” he said. “Year after year of collective bargaining, when you are only ratcheting up, I mean leads to this kind of excess and this kind of waste.”

The investigation found that the most lucrative contract is between the City of Las Vegas and the Las Vegas Police Protective Association, which receives over $1 million in tax dollars and 15,500 hours a year for union members to perform union work. Las Vegas also pays its Metro Supervisors Association and its Police Protective Association, Civilian Employees, Inc., more than $430,000 a year and $300,000 a year, respectively, for union employees to do union work.

Las Vegas Police Protective Association.

The investigation also found that the Clark County firefighters union received well over $400,000 in taxpayer funds for union business, and North Las Vegas provided over $600,000 for union firefighters to carry out union work. The Service Employees International Union Supervisors and SEIU Non-Supervised Employees took over $195,000 a year and over $300,000 a year, respectively, from Clark County taxpayers, for union activities.

The Nevada Journal article notes that in March, Clark County Commissioner Steve Sisolak called for the county firefighters union, rather than taxpayers, to pay for union leave.
“The taxpayer is paying for the county to represent the county and is also paying for the union to represent the union,” he told the Las Vegas Sun.

Recently, when asked by NPRI about the new contract continuing its open-ended language, Sisolak said he would have “preferred a cap” on the hours, indicating that lack of a fixed number of hours has been a factor in the over-use of leave time.

“I do support collective bargaining,” Sisolak told the Nevada Journal, “but you do have to find ways to save money and find what’s essential for taxpayers.”

Clark County Commissioner Chris Giunchigliani disagreed with Sisolak on the paid-leave issue. She said paid union leave is used to offset other concessions, such as freezes on pay.

“Collective bargaining allows both sides to sit down and decide what’s best for the county,” said Giunchigliani. “Union leave has always been included in contracts in both public and private sector unions.”

Union officials did not respond to requests for comment by NPRI.

Joecks said one simple answer to the issue is getting legislation passed banning the practice. But it is just one more example of why collective bargaining should be banned entirely for local government employees, he said.

The practice is also unconstitutional, Joecks said. Article 8, Section 9 of the state constitution says the state shall not donate or loan money to corporations except those created for educational charitable purposes. Since cities and counties are creations of the state, it applies to them as well, he said.


Audio clips:

Victor Joecks, NPRI communications director, says taxpayers will be stunned when they see how much is spent on union activities:

020912Joecks1 :32 these labor unions.”

Joecks says it is an example of how collective bargaining is getting out of control:

020812Joecks2 :27 kind of waste.”



Gaming Tax Hike Sought As Alternative To Possible Margin Tax Ballot Measure

By Sean Whaley | 1:25 pm February 8th, 2012

CARSON CITY – Las Vegas businessman Monte Miller said today he is seeking a hike in the gaming tax for the state’s largest casinos to offer the Legislature and voters one more revenue option in the face of a possible Texas-style margin tax that could appear on the ballot.

Even at the proposed 9 percent rate on net casino gambling revenue above $250,000 per calendar month, Nevada would have the lowest effective tax rate in the world, he said in a telephone interview today.

Slot machine / Photo by Jeff Kubina @ Wikimedia Commons

Under current law, net casino gambling revenue in excess of $134,000 per calendar month is taxed at a 6.75 percent rate.

Miller, through a group called Nevadans for a Fair 9% Gambling Revenue Tax (NF9GRT) on Tuesday filed a statutory initiative petition with the Nevada Secretary of State that would create the new, higher rate.

The proposal, along with another to provide for a possible increase in the mining tax filed last week, are meant to providing voters and policy-makers with options in light of an anticipated ballot proposal from Danny Thompson, executive secretary-treasurer of the Nevada State AFL-CIO, to create a 2 percent margin tax based on the Texas model to provide increased funding for public education. Thompson could not be reached for comment on the status of his expected tax proposal.

Thompson and the other groups expected to support the margin tax ballot measure have not yet filed an initiative petition with the Secretary of State’s office, but Miller said there is plenty of time to do so.

If you look at Texas, and what they’re going through with the Texas margins tax, which is the template for what Mr. Thompson is doing, it’s a destructive, terribly complex tax,” he said. “And you couldn’t have a worse income tax in your state. And so we think the people of Nevada need an alternative.

Las Vegas businessman Monte Miller.

“This would be the first income tax in the state of  Nevada,” Miller said. “We’ve got to give people a choice.”

Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, wrote an article this week calling the tax unfair to small business and an “abject failure,” in Texas.

Miller said a 9 percent rate is a fair tax rate for the biggest casino operations. The number that surprised him comes from Indiana, where that state collected nearly $875 million in taxes from 11 casinos in 2010. Nevada collected $835 million in 2010, he said.

Indiana’s tax rates go from 15 percent to 40 percent.

“We’re not asking for 15 percent, we’re saying 9 percent, (it) still would be the lowest in the world, the lowest effective tax rate in the world,” he said.

“This initiative represents a 33 percent tax increase on the gaming industry, which would be reckless and irresponsible,” Virginia Valentine, president of the Nevada Resort Association, said in an email to the Associated Press. “We are currently reviewing the language. If this effort is indeed legitimate, we will oppose it vigorously.”

Miller said the proposal is not a tax on all casino revenue.

“If our initiative becomes law, it will not increase taxes on room rates, shows, shopping or restaurants in casinos,” he said. “Nor would it increase taxes on small casinos, taverns or convenience stores.

“Nevada’s individuals and small businesses are overtaxed,” Miller said. “By fairly taxing the billions of dollars that big casinos win from high-rolling gamblers, we can lower taxes and fees on individuals and small businesses who are struggling during these tough economic times.”

The group will have to collect 72,352 valid signatures from Nevada voters by Nov. 13 to send the proposal to the Nevada Legislature in 2013. If the Legislature did not enact the proposal, it would go to voters in 2014 and take effect in 2015 if approved. The Legislature could also opt to put a competing proposal on the ballot for voters to consider.


Audio clips:

Las Vegas businessman Monte Miller says a Texas-style margins tax would be destructive in Nevada:

020812Miller1 :26 in your state.”

Miller says even at 9 percent, the top gaming tax rate would be the lowest in the world:

020812Miller2 :10 in the world.”

Gov. Sandoval Unveils State Economic Development Plan, Calls For 50,000 New Jobs By The End Of 2014

By Sean Whaley | 3:41 pm February 7th, 2012

RENO – Gov. Brian Sandoval used the University of Nevada, Reno today as a backdrop to unveil his economic development plan, and he challenged the business community and all partners to work to create 50,000 new jobs by the end of 2014.

The 63-page report, “Moving Nevada Forward: A Plan for Excellence in Economic Development 2012 – 2014” calls for creating a cohesive system to move forward with economic development, expand “global engagement” and increase opportunity thorough education and workforce development, among other objectives.

“This (report) is a blueprint for building a vibrant, sustainable economy for all Nevadans,” Sandoval said. “It puts us in a better position to succeed in the hyper-competitive push to champion a strong economy that creates good jobs.

Gov. Brian Sandoval talks about Nevada's economic diversification plan today at UNR. / Photo: Nevada News Bureau.

“State government will play a role by advocating for business, providing the infrastructure that helps business thrive, and helping to educate our future workforce,” he said. “The plan spells out our efforts.”

A key component of achieving job growth is a $10 million Catalyst Fund created in cooperation with the Legislature to help existing Nevada businesses expand and to encourage other businesses to relocate to the state.

“So I’m issuing a challenge today, to all of our partners in building this economy,” Sandoval said. “We must create 50,000 jobs by the end of 2014, the 150th anniversary of Nevada becoming a state.”

Plan developed with help of business community, policy makers

The plan was developed by Steve Hill, executive director of the Governor’s Office of Economic Development, after consultation with business leaders and policy-makers from around the state. The report piggybacked on a report prepared by the Brookings Institution and SRI International that was delivered to the state Board of Economic Development in November outlining how Nevada could move forward with economic diversification and job growth.

The Brookings report identified seven economic sectors, some already in existence such as gaming and tourism, and some emerging, such as clean energy, where Nevada should focus its efforts.

That report received some criticism for lacking specifics of how to achieve job growth in Nevada, which has the highest unemployment rate in the country.

Hill was directed to prepare a plan that would be a working document that the public can easily understand.

The report says that Nevada’s assets for economic development include more than 40 million visitors annually, the largest gold producer in the country, and its national defense opportunities at Nellis Air Force Base and the other military installations around the state.

The state has serious liabilities as well, however, including a disjointed economic strategy, an under-performing education system and a workforce that is not trained for new job opportunities.

Hill said an economic development plan is critical given the current state of the economy.

“We don’t have to worry going forward whether Nevada will be connected to the globe, it will be,” he said. “And we need to learn how to capitalize on that better. So, globalizing, both in terms of exporting, in terms of foreign investment in Nevada, bring good jobs, it brings additional financing and investment in the state and is an area that we need to focus on.”

The plan also focuses on the need for education reform, Hill said.

“We all know that we need a higher level of education achievement in order to drive this economy forward,” he said.

The plan also has benchmarks to assess whether Nevada is achieving its ambitious job-creation goals, Hill said.

Following the release of the plan, Sandoval and Hill toured a Reno business, the Pacific Cheese Company, where president Steve Gaddis said he expects continued expansion of the company with more jobs added in the coming months. The company has a plant in California as well.

Gov. Brian Sandoval meets today with Steve Gaddis of the Pacific Cheese Co. / Photo: Nevada News Bureau.

The company had 33 employees early last year and has 99 employees now. Gaddis said he expects to expand to 120 to 130 workers by February 2013. Almost all of the workers have been hired locally, Gaddis said.

Gaddis said the first plus for Nevada as a place to do business is the fact that it is not California.

“For us it’s the combination of regional supply logistics, a good labor force, the tax factor attracts us a lot because most of what we will save in Nevada will clearly go back in this business to create jobs and growth,” he said.

NPRI says plan raises constitutionality concerns

The plan generated some immediate criticism from the Nevada Policy Research Institute, a conservative think tank.

Geoffrey Lawrence, deputy policy director at NPRI, said the intent of the plan is to substitute the government for private businesses and politically connected bureaucrats for entrepreneurs. He questioned whether it is constitutional.

“It is a roadmap for crony capitalism and would lead to less productivity and less growth,” he said. “It is clearly unconstitutional. In short, this plan would take Nevada 180 degrees in the wrong direction.”

Lawrence said the state constitution declares that the state shall not donate or loan money, or its credit, subscribe to or be, interested in the stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.

Giving subsidies to private businesses, as this plan calls for, is unconstitutional, he said.


Audio clips:

Gov. Brian Sandoval says the report is a blueprint for building a vibrant, sustainable economy:

020712Sandoval1 :19 creates good jobs.”

Sandoval says state government’s role will involve advocating for business, providing infrastructure and educating the future workforce:

020712Sandoval2 :15 out our efforts.”

Sandoval says he wants 50,000 new jobs by the end of 2014:

020712Sandoval3 :18 becoming a state.”

Steve Hill, executive director of the Governor’s Office on Economic Development, says globalizing Nevada is a key element of the plan:

020712Hill :26 to focus on.”

Pacific Cheese Company President Steve Gaddis says Nevada is attractive both because of a good labor force and low taxes:

020712Gaddis :16 jobs and growth.”



NPRI to Regroup Due to Denis Resignation

By Elizabeth Crum | 8:04 pm December 19th, 2011

As first reported by David McGrath Schwartz of the Las Vegas Sun, state Sen. Mo Denis said he plans to resign from his job with the Nevada Public Utilities Commission (PUC), possibly rendering moot the recently filed lawsuit challenging his ability to be employed in two branches of state government.

Denis, who is the heir apparent to Sen. Majority Leader Steven Horsford, told the Sun he’d already been looking for a new job with more flexibility in preparation for his Senate leadership role. He said the decision is not related to the lawsuit from conservative think tank Nevada Policy Research Institute (NPRI).

The NPRI suit contents that Article III of the state constitution clearly defines the separation of powers between the three branches of government, and that Denis’ job in information technology for the PUC was a violation of that clause.

Analysts had speculated that if the suit was successful, as many as 10 other lawmakers who are also public employees could have been affected.

However, it is now unclear whether the NPRI lawsuit can proceed as filed or whether a new suit would have to be filed against another legislator.


Nevada Think Tank Files Court Complaint Challenging Ability Of Government Employees To Serve In Legislature

By Sean Whaley | 3:02 pm November 30th, 2011

CARSON CITY – A conservative Nevada think tank today filed a complaint in district court against Sen. Mo Denis, D-Las Vegas, saying the separation of powers clause in the state constitution prohibits government employees from serving in the Legislature.

Denis works for the state Public Utilities Commission as a computer technician. Attorney Joseph Becker with the Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation said his client William Pojunis is qualified to perform, and would like to apply for, Denis’ job.

Attorney Joseph Becker, left, and his client William Pojunis, take questions after filing a separation of powers complaint today against Sen. Mo Denis. / Photo: Nevada News Bureau.

If NPRI wins its case, Denis and several other state lawmakers who work for state and local government and the Nevada judiciary could be forced to pick between their jobs and legislative service.

Becker said the PUC’s employment of Denis violates the state constitution’s separation of powers clause in Article 3, Section 1.

“Nevada’s constitution is perfectly clear: One individual cannot serve in two branches of government,” he said. “Allowing one person to exercise power in two branches of government leads to numerous conflicts of interests and invites corruption. It also destroys the checks and balances that were built into Nevada’s government to protect citizens from power-hungry politicians.

“Applying this principle to this case has significant implications for this state,” Becker said. “We have 63 legislators and something close to 20 percent of them are affected by this provision. They are working in situations that we believe are unconstitutional. When the court holds in our favor, those lawmakers would either have to leave their executive or judicial branch employment or leave the Legislature.”

Denis said today he could not comment on the complaint because he has not seen it.

“I’ve only been hearing pieces of it,” he said. “At some point I will have a comment.”

The PUC had no immediate comment on the complaint either.

NPRI has one strong ally in its court action. Gov. Brian Sandoval, while serving as attorney general in 2004, issued an opinion that also determined that the separation of powers requirement in the state constitution precluded state government employees from serving in the Legislature.

Written at the request of then-Secretary of State Dean Heller, Sandoval’s March 1, 2004 opinion said in part: “It is the opinion of this office that Article 3, Section 1 of the Nevada Constitution bars any employee from serving in the executive branch of government and simultaneously serving as a member of the Nevada State Legislature.”

Sandoval did not find that the separation applied to local government employment, however.

Heller, now a U.S. senator, challenged lawmakers who also worked for the government in 2004, but the Nevada Supreme Court said it could not consider the case, which was brought against the Nevada Legislature, because it is the Legislature’s responsibility to determine the qualifications of its members.

Becker said NPRI’s case is different because it is challenging the PUC’s ability to employ Denis given the separation of powers clause and his election to the state Senate. The complaint was not filed against the Legislature, he said. The complaint was filed in Carson City District Court.

Pojunis, 66, came to Carson City with Becker to file the complaint, but did not directly answer any questions. Becker said NPRI was approached by Pojunis and decided to take the case. Pojunis is currently unemployed.

Some of the other lawmakers who potentially could be affected by a court ruling supporting the NPRI position include Sen. Sheila Leslie, D-Reno, who works for the Washoe County court system,; Assemblywoman Olivia Diaz, D-North Las Vegas, and Assemblywoman Melissa Woodbury, R-Las Vegas, both of whom work for the Clark County School District, and Assemblyman Kelvin Atkinson, D-North Las Vegas, who works for Clark County.

Becker said the legal action is not politically motivated.

“This is about him (Denis) holding a position as a civil servant that he is not constitutionally allowed to hold,” he said.

The Center for Justice and Constitutional Litigation, which calls itself a public interest legal foundation, was established a year ago by NPRI. This is the first case brought by the organization.

Andy Matthews, president of NPRI, said the separation of powers clause is a vital part of state constitutions across the country.

“And when you have decisions that are being made in the Legislative Branch that can impact Executive Branch functions, Executive Branch agencies, it’s very important to make sure that the people who are making those decisions in the Legislature are doing so from the standpoint of what is best for the people of this state and what constitutes good policy, not because of some conflict of interest they may have as a result of their service in the Executive Branch as well,” he said.


Attorney Joseph Becker with NPRI’s Center for Justice and Constitutional Litigation says the case has significant implications for the state:

113011Becker1 :24 leave the Legislature.”

Becker says the case is not political:

113011Becker2 :14 correct on this.”

Andy Matthews, president of NPRI, says the separation of powers clause is a vital part of state constitutions across the country:

113011Matthews :24 branch as well.”

Nevada’s Public Pension Plan Sees Long Term Unfunded Liability Grow Slightly In 2011

By Sean Whaley | 5:09 pm November 18th, 2011

CARSON CITY – Nevada’s public employee pension plan saw its long-term funding ratio decrease slightly in the fiscal year ending June 30, dropping to 70.2 percent from 70.5 percent in fiscal year 2010.

The Public Employees’ Retirement System board heard an update on the plan, which covers virtually all state public employees, at a meeting Wednesday in Las Vegas.

Dana Bilyeu, executive officer of PERS, said in a telephone interview that the slight increase in the long-term unfunded liability of the plan comes even as the pension investments saw a record 21 percent return in fiscal year 2011, which ended June 30. The pension plan is still absorbing a 15.8 percent loss in 2009 and a loss in 2008 as well, she said.

Dana Bilyeu, executive officer of the Public Employees' Retirement System

While the assets in the plan increased significantly in fiscal year 2011, growing to $25.8 billion from just under $21 billion in the prior year, the value of the unfunded liability grew as well, reaching $11 billion on June 30 compared to $10 billion in 2010.

“So from a long-term benchmarking, it’s kind of status quo from last year to this year on the funding of the system,” Bilyeu said. “We had a significant increase in assets on hand, but are continuing to absorb losses from the down market period as well.”

The numbers and percentages reflect the combined plans for regular public employees and police and fire fighters.

At its high point in 2000 the plan was 85 percent funded.

One interesting note in the report to the board was evidence of a reduction in the public employee workforce due to budget cutbacks, Bilyeu said. The regular employee membership declined by 2.5 percent, a reduction from 90,219 as of June 30, 2010 to 87,975 on June 30, 2011.

The police-fire sector saw an even bigger decline of 3.5 percent, she said. Active members declined from 12,375 in 2010 to 11,936 in 2011.

The long-term unfunded liabilities of the PERS plan, and of public employee pension plans nationwide, are generating concern from policy makers, although Nevada’s plan is considered to be well managed and in better fiscal shape than many other plans around the country.

There are also analyses that argue that the method of accounting for the long-term unfunded liabilities used by public pension officials vastly understates the real size of the potential financial impact to taxpayers.

A recent report by Andrew Biggs, a resident scholar at the American Enterprise Institute in Washington, DC, prepared for the Nevada Policy Research Institute, a conservative think tank, argues Nevada’s pension liabilities are much greater than reported.

The analysis found that when the long-term unfunded liabilities of the plan are calculated using a “market-based” valuation, a measure endorsed my most professional economists, the shortfall is actually closer to $41 billion than the $10 billion as of 2010 cited by PERS and its actuary.

Biggs presented his findings at a NPRI luncheon in Las Vegas earlier this month.


Audio clip:

PERS Executive Officer Dana Bilyeu said the report on the pension plan for 2011 is status quo:

111811Bilyeu :11 of the system.”


Nevada Public Pension Liabilities Vastly Understated, New Report Says

By Sean Whaley | 1:01 am November 3rd, 2011

CARSON CITY – Nevada’s public employee pension system is one of the better funded plans around the country, but its financial health is far poorer than taxpayers may realize because of the way the long-term liabilities are calculated, a new analysis released today says.

The report by Andrew Biggs, a resident scholar at the American Enterprise Institute in Washington, DC, was prepared for the Nevada Policy Research Institute, a conservative think tank.

Titled “Reforming Nevada’s Public Employees Pension Plan” the analysis says that when the long-term unfunded liabilities of the plan are calculated using a “market-based” valuation, a measure endorsed my most professional economists, the shortfall is actually closer to $41 billion than the $10 billion cited by Public Employees’ Retirement System (PERS) and its actuary.

The funding ratio of the plan falls from 70.5 percent to about 34 percent, Biggs said in his analysis.

“Nevada PERS is far from the worst-funded or worst-managed public-sector pension system in the country,” Biggs concludes in his report. “However, this merely highlights the worrying state of public-pension financing around the nation. Using market-valuation methods — which are consistent with economic theory, the practice of financial markets and the rules under which private-sector pensions must operate and which have recently been endorsed by the Congressional Budget Office — PERS is very poorly funded.”

In a telephone interview, Biggs said: “Whether you agree or disagree with the angle I took on it, I think it is helpful for people to know how the financial health of their pensions is being calculated. What they don’t know is how much of their plan’s funding rides on market risk.

Illustrating the Market Valuation of Liabilities.

“So there is a lot being staked on winning in the market here,” he said. “And whether you think the government can do that or you think the government can’t do it, it’s good to know exactly what’s at stake.”

Report Could Drive Issue For Policy Makers

Geoffrey Lawrence, deputy policy director for NPRI, said the report should encourage Nevada policy makers to take a serious look at making major reforms to the state public pension plan.

“We really felt that his expertise could lend a lot to the debate here in Nevada, where, as in most states, we have kind of a major pension liability,” he said.

The huge differences in the unfunded liability are due to the method used to make the calculation.

Nevada PERS, which covers nearly all state and local government public employees in the state, uses an accepted accounting method based on the actuarial value of its assets, valued at $24.7 billion as of June, 2010, according to Biggs’ analysis. With liabilities of $35.1 billion, the retirement system reports its unfunded liability at about $10 billion. This figure will be updated later this month through June 30, 2011.

This long-term unfunded liability relies on an estimated rate of return on its assets, which are invested mainly in stocks and bonds.

Biggs acknowledges that the valuation under this approach is consistent with rules set out by the Governmental Accounting Standards Board (GASB), which sets nonbinding disclosure rules for public pensions.

Andrew Biggs, author of a Nevada public pension study for NPRI.

But Biggs argues the actuarial valuation masks the true liabilities that taxpayers could ultimately end up having to cover because it does not factor in the risk of achieving an 8 percent return, a rate PERS officials note has been exceeded over the past 28 years.

Using a market-based valuation, which assesses the liabilities based on the much lower interest rate paid on government bonds, provides a more accurate assessment of the long-term unfunded liability, he said.

Lawrence said the report by Biggs shows what is at stake for public pension plans and taxpayers.

“Because under the actuarial approach you are allowed to understate your liabilities, it allows politicians to make bigger promises than they can afford, and then to underfund the pension account at the same time,” he said. “So in the long run they accrue this unfunded liability, which officially here in Nevada is reported at $10 billion, but of course Andrew is showing that it is really closer to $40 billion. So that is a huge gap.”

Nevada PERS officials say the plan is actuarially sound, and that the unfunded liability will be covered over time. They also note that the contribution rates required to keep the plan healthy are set by an independent actuary and are fully funded by the Legislature.

Biggs said the current housing crisis was a decade in the making and was the result of taking on too much risk. Public pension plans, with trillions of dollars at stake, are also taking on a lot of risk to deliver on their promises, he said.

Biggs published a similar analysis for public pension plans nationwide in 2010, concluding that the shortfalls facing the plans are much larger than most people realize.

In commenting on that report last year, Dana Bilyeu, executive officer of PERS, did not dispute Biggs’ method of calculating the shortfall, but said the actuarial method now being used is the accepted practice for public pension plans.

National Board Considering Changes To Public Pension Reporting

The Governmental Accounting Standards Board has been evaluating some changes to the way public pension liabilities are calculated, but Biggs said he does not expect to see it embrace the market-based approach he and other economists advocate.

“To be honest I think they just don’t get it,” he said. “I don’t think they’re willing to make the kinds of changes that would be needed to bring pension valuation in line with what economists think makes sense and in line with what financial markets think makes sense. It would be such a drastic change I just don’t think they’re capable institutionally of doing it.”

GASB said in July it had approved the proposed standards, dubbed exposure drafts, which would lead to “significant improvements” in the usefulness of pension information. The latest guidance would require governments to report the unfunded portion of their retirement plans as a liability on their balance sheets, among other changes.

There has been a growing call nationally to move public pension plans to a state to a defined contribution plan, similar to a 401(k)-type plan, from the current defined benefit plan, where retirees are paid a set amount per month based on salary and years of service.

Gov. Brian Sandoval has advocated such a position, although the concept did not see any serious discussion in the 2011 legislative session.

Lawrence said an issue with making such a change is the big upfront cost of fully funding the current defined benefit pension plan in an accelerated fashion. But Utah got around that challenge last year by crafting a modified plan that allows employees to choose whether to participate in a defined benefit or defined contribution plan. It could be a good model for Nevada, he said.

Lawrence said one often overlooked benefit of such a plan is that it is portable, allowing public sector workers to move into the private sector if they wish and not remain trapped in jobs they no longer want.

The PERS board has not endorsed any such major change to the state public pension plan.


Audio clips:

Andrew Biggs, author of a new study of Nevada’s public pension system, says it is important to know how the financial health of the plan is calculated:

110311Biggs1 :23 on market risk.”

Biggs says there is a lot being staked on the market:

110311Biggs2 :10 what’s at stake.”

Biggs says GASB is unlikely to make major changes:

110311Biggs3 :21 of doing it.”

Geoffrey Lawrence of NPRI says the study by Biggs should fuel the policy debate in Nevada:

110311Lawrence1 :14 major pension liability.”

Lawrence says the study shows a much bigger problem than what is being reported by PERS:

110311Lawrence2 :35 a huge gap.”



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.”