Question 1: Higher taxes would enable higher salaries
Why do proponents of tax increases so often try to mislead the public?
Are they unaware of the deceptions they promote, or do they think misleading voters is a winning strategy?
In the case of CCSD officials and their push for a property-tax increase, I lean toward the latter; in the case of Steve Sebelius and his push for increasing taxes for the Henderson Libraries, I'm not sure.
From his column today:
Rest assured, this money (higher taxes authorized if Question 1 passes) will not end up in somebody's pocket: It can only be used for operating expenses, things such as utilities, building maintenance and the like. It won't be used to give pay increases or hire more employees, although they're certainly needed.While what he writes is technically true, the implication is not. Because if this tax increase passes, a portion of the money currently being used to fund operating expenses will be used to "hire more employees" and "can be used to give pay increases."
As I wrote in October about Question 1:
When I interviewed (Henderson Library Executive Director Thomas) Fay, he insisted that new money raised by the tax increase could not be used for pay increases, but admitted that money currently being used for books and services could be used to fund salary increases.In a subsequent article in the Las Vegas Sun, the Henderson Library District admitted that this shell game is indeed the plan.
This is a textbook example of a shell game. If voters approved an additional $1.614 million for services and supplies, there's no legal prohibition on the Library District using the $1.606 million it spent this year on services and supplies to increase employee wages.
So, the tax increase may not directly fund wage increases, but it will free up funds previously spent on services and supplies to increase salaries and benefits.
It's easy to deduce that spending this tax increase on salary and benefits is actually the plan, because Fay has said there's "practically no one to run Malcolm and Galleria (branches)." Since this tax increase is being sold as necessary to keep those branches open, money currently being used for services and supplies will go toward hiring more staff.
The district counters that the tax is for maintaining the status quo and the board's primary goal is to return some of the lost hours and services. If the libraries were to reopen on Mondays, for example, some money not currently spent on salaries would have to be moved.So my question for Steve Sebelius and other tax-increase supporters is this: Were you fooled, or are you intentionally trying to mislead the public?
Read moreWhy price gouging is a good thing
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them. Just enter your email in the box on the top right.
For today's week-in-review column, Andy looks at how anti-price gouging laws harm the very people they're intended to help.
Why price gouging is a good thing
One unfortunate aspect of tragedies, like this week's Hurricane Sandy, is that wrong-headed government policies so often prolong the pain experienced by disaster victims.
Exhibit A are laws, like those in New York and New Jersey, prohibiting "price gouging" - defined as a merchant using the demand created by a natural disaster to charge more for items like gasoline, bottled water or generators.
Before the hurricane hit, New Jersey Gov. Chris Christie issued a stern warning against raising prices, stating, "The State Division of Consumer Affairs will look closely at any and all complaints about alleged price gouging. Anyone found to have violated the law will face significant penalties."
While this makes for good politics - with news stories portraying Gov. Christie as standing up for the "little guy" - it's terrible policy. Especially for the "little guy."
It should be noted that, in a free country, the government has no business telling private parties what they can or can't charge for an item.
But the problems with anti-"gouging" laws aren't just philosophical; they also hurt the very disaster victims they're supposed to protect.
Before Sandy hit, many stores in the storm's path ran out of food, bottled water and emergency supplies, and the customers who didn't get to the store earliest faced empty shelves. This makes sense. If the demand for bottled water skyrockets (as it does before a storm) and the price stays the same, stores will run out of bottled water quickly. That's because early-arriving customers will take more than they need to survive the storm, since there's no financial reason not to.
Now consider the unseen: the customers at the back of the line who aren't able to purchase any bottled water because it's all gone. There will be no news stories written about these folks. Yet they face real danger.
But what if the price of bottled water were to increase exponentially? You must remember that prices serve as a signal telling customers how scarce a product is compared to the demand for that product.
If a gallon of water went from $1 to $5 or even $10, customers at the front of the line would be forced to decide how much water they really needed to survive the storm, and would purchase accordingly. This would leave more resources for the customers at the back of the line.
Now in this case, the business owner would start making a large profit. And this is a very good thing. Just like high prices serve as a signal to consumers that a particular product is in great demand, profits signal to an entrepreneur that he or she can make money by providing more of that good or service.
So allowing high prices is the most efficient way to ration goods, and allowing high profits incentivizes others to provide more of those goods - which will eventually drive prices down.
The same is also true after a storm hits. This story from John Stossel perfectly illustrates the folly of anti-gouging laws.
After Hurricane Katrina, Mississippi Attorney General Jim Hood announced a crackdown on "gougers."
John Shepperson was one of the "gougers" arrested. Shepperson and his family live in Kentucky. They watched news reports about Katrina and learned that people desperately needed things.
Shepperson thought he could help, so he bought 19 generators. He and his family then rented a U-Haul and drove 600 miles to an area of Mississippi left without power.
He offered to sell his generators for twice what he had paid for them, and people were eager to buy. But police confiscated his generators, and jailed Shepperson for four days. The police kept his generators.
Did the public benefit? No.
Ideas have consequences. And anti-"gouging" laws have very bad consequences - for the very people these laws are intended to protect.
That's all for this week. Thanks for reading. Oh, and on a more pleasant note, I'm looking forward to seeing many of you at our 21st Anniversary Celebration tomorrow night featuring a keynote speech by Scott Rasmussen. I know many people are eager to hear from him just three days before Election Day, and those who attend are in for a real treat.
Until next time,
Andy Matthews
NPRI President
Remember, if you'd like to receive the latest from NPRI, sign-up for our emails here. Enter your email address in the box on the top right.
CCSD wants higher taxes to fund a new $11.9 million gym for high school with ... 84 students
A deal at "only" $140,000 per high school student. Can you say vanity project?
The school is Indian Springs, which is so small that it's a K-12 facility with just 244 students total and only 84 high school students.
If the tax increase CCSD wants passes, this school is slated to receive a new $11.9 million gym. If that sounds like a lot of money, you're right - it is!
As this video from Nevada Journal details, that's what it cost to build UNLV's state of the art Mendenhall Center, which is the practice facility for UNLV's nationally ranked basketball team.
Favorite stat from the video is this. Number of students attending Indian Springs: 244
Number of students attending UNLV: 22,138.
And remember, CCSD says the Indian Springs gym is one of its most "crucial" needs. CCSD bureaucrats have said they need $4.6 billion more in the upcoming years for projects that they desire, but aren't quite as critical as the Indian Springs gym.
Really CCSD? A high school with 84 students needs a gym that cost as much as UNLV's 38,000 square-foot, state-of-the-art Mendenhall Center? That's your definition of a "crucial" need? And you want another $4.6 billion for things that aren't as important as that?
By the way, Indian Springs already has a gym.
There's only one thing to say: Don't be fooled again.
Video: Happy (Redistributionist) Halloween
How do you make kids unhappy on Halloween?
Trying taking candy from some children and giving that candy to others in the name of "fairness."
As you'll see in this great video by Steven Crowder, even kids understand that it's not just for a third party to take from some to give to others.
And speaking of government taking from one person and giving to another, here's French economist Frederic Bastiat detailing why that's both wrong and destructive.
But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.If you haven't read Bastiat's The Law, which is the source of that quote, I urge you to read it right now. It's short in length, rich in insight and available for free online here.
Then abolish this law without delay, for it is not only an evil itself, but also it is a fertile source for further evils because it invites reprisals. If such a law-which may be an isolated case-is not abolished immediately, it will spread, multiply, and develop into a system.
The person who profits from this law will complain bitterly, defending his acquired rights. He will claim that the state is obligated to protect and encourage his particular industry; that this procedure enriches the state because the protected industry is thus able to spend more and to pay higher wages to the poor workingmen.
Do not listen to this sophistry by vested interests. The acceptance of these arguments will build legal plunder into a whole system. In fact, this has already occurred. The present-day delusion is an attempt to enrich everyone at the expense of everyone else; to make plunder universal under the pretense of organizing it.
Waste at CCSD: District throwing away TVs, desks
During September and October 2012, NPRI's Nevada Journal observed the Clark County School District getting rid of dozens of TVs and dumpsters full of furniture. With CCSD crying poverty and pushing a property-tax increase, why is the District wasting taxpayer dollars in this way?
Also, make sure you watch Ch. 13's excellent investigation on this subject, which is available here.
CCSD throwing away dumpsters full of usable furniture
At the same time CCSD wants to raise your property taxes by $669 million, district officials are also throwing away usable furniture worth tens of thousands of dollars.
Kudos to Ch. 13's Darcy Spears who uncovers this stunning example of government waste and who makes CCSD financial chief Jeff Weiler squirm as he attempts to justify this waste of tax dollars.
I can't embed the video so click here to watch the full report. And make sure you stick around to the end, because it just gets worse and worse for taxpayers.
Reno City Council approves subsidy for billionaire baseball team owner
NPRI would like to send its congratulations to the city of Reno for making itself an early contender for entry into our Nevada Piglet Book, 2014 edition.
RENO - The City Council has given tentative approval to a plan to use general fund money to help owners of the Reno Aces baseball team refinance a $55 million loan used to build Aces Ballpark. ...The problem with government giving a subsidy to a billionaire isn't that the recipient is rich. The issue is that government shouldn't be giving anyone a subsidy.
The primary financial backer of the Reno Aces, billionaire Herb Simon, has said he would move the team elsewhere if a new public financing deal isn't cut to refinance the $55 million loan that will come due in December 2013.
Originally, the ballpark loan was going to be mortgaged by using assumed increases to downtown property taxes. Instead, that revenue collapsed during the recession as casino revenues declined.
Now the plan is to use general fund financing from Reno and potentially Washoe County and new private funding from the Aces owners, to issue new private debt to refinance the $55 million loan. That private debt will be guaranteed by Simon.
Washoe County is being asked to chip in $500,000 a year for the next 30 years. That vote is expected to happen in the coming weeks. The city also wants a guarantee the Aces will stay in Reno until the stadium debt is paid off 30 years from now.
If approved, the direct public contributions from Reno and Washoe County will amount to $45 million over 30 years. Once the stadium is paid off, it will become a publicly owned building.
Government's role is to provide an equal playing for individuals and businesses to compete on - not to pick the winners and losers in the economy.
In 2009, NPRI released a study detailing the problems with tax-increment financing schemes, like the one that backfired on Reno. Read the whole thing here.
Clichés
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them. Just enter your email in the box on the top right.
For today's week-in-review column, Andy details five political clichés that are often used but shouldn't be.
Clichés
Assuming you have access to a TV, radio, newspaper, Internet connection or even a mailbox, you're well aware that it's campaign season. Which means it's also cliché season.
Much as I hate it, I've learned to accept that politicians stumping for votes are going to resort to using clichés. Still, some clichés are worse than others. And the worst are those that are not merely stale, but are false or misleading as well.
These are the clichés we really need to watch out for, because they do more than simply annoy - they also contribute to an environment in which policy discussions are based on inaccurate assumptions, thus frustrating efforts to arrive at the sound policy solutions we really need.
With that, here are five political clichés that need to go:
"Asking" the wealthy to pay more. This cliché has been a particular favorite of the Obama re-election campaign. Here's the president during Monday's presidential debate, on how he would reduce the deficit: "We've got to do it in a responsible way, by cutting out spending we don't need but also asking the wealthiest to pay a little bit more."
So here's what I want to know: What if "the wealthiest" politely decline? What if, when "asked," they say no? The reality is that when President Obama says he'll "ask" the wealthiest to pay more, what he really means is he'll "force" them to pay more - under the threat of fine or imprisonment. Whatever your opinion as to whether wealthy Americans should pay higher taxes, can we at least agree that politicians should stop using language that implies taxpayers would have a choice in the matter?
Those phony spending "cuts." I want you to try an experiment. Next time you're up for a performance review at your job, ask your boss for a $10,000 raise. When your boss agrees to a $3,000 raise, respond with righteous indignation over having your salary "cut" by $7,000. You'll probably get fired, but the good news is you'll have proven yourself highly qualified for a new career in politics.
Politicians, particularly those on the Left, have mastered the art of proposing massive increases in government spending, and then labeling any proposal to increase spending by a lower amount than they seek as a "cut." NPRI's own Victor Joecks has been particularly adroit at exposing this ruse (see here and here). Again, we can debate all day about the appropriate spending level for any given government program. But politicians shouldn't get away with characterizing smaller-than-desired spending increases as "cuts."
Ending everything as we know it! Whenever someone comes along with an idea to reform a government program, he or she is immediately accused of wanting to "end the program as we know it." U.S. Senate candidate Shelley Berkley in particular has been fond of saying that this is what her opponent, Sen. Dean Heller, has in store for Medicare. It's a curious accusation, inasmuch as we "know" Medicare as an inefficiently administered program that's on the fast track to fiscal insolvency. Reason tells us, then, that ending Medicare "as we know it" is not merely a good idea, but a mathematical necessity.
If you've come to know your septic tank as that thing in your yard that starts hemorrhaging its contents every time you flush the toilet, then you probably want to make some structural reforms to "end your septic tank as you know it." That doesn't make you anti-septic tank.
Concern for the "middle class." Here's a cliché beloved by politicians on both sides of the ideological divide. During the Oct. 16 presidential debate, Mitt Romney said the election is about "who can get the middle class in this country a bright and prosperous future." A review of the debate transcript shows the phrase "middle class" was used 19 times by Romney, Obama and moderator Candy Crowley combined.
While there's nothing wrong with pursuing policies that will benefit those citizens whom politicians have in mind when they refer to the "middle class," the use of the term itself is grating. There's something about the idea of a "class system" that is fundamentally un-American. This isn't feudal Europe. While the word "class" suggests a permanent station, the opportunities for upward (and, to be sure, downward) movement on the American economic scale are virtually boundless. Do most Americans really see themselves as members of a particular economic class? They may. But it's not healthy.
"Paying" for tax cuts. That the term "paying for tax cuts" has even weaseled its way into our political lexicon probably irritates me more than the above four items combined. (And yes, I'm well aware that saving the best for last, as I've done here, is in fact a cliché, thank you very much.) Here's Obama, again on Monday: "Governor Romney's called for $5 trillion of tax cuts that he says he's going to pay for by closing deductions."
The problem with this is that government does not, in fact, "pay" for tax cuts. Taxation involves the government taking, from the private economy, money that an individual or a business has earned. It is that individual or business who, in effect, is "paying" the government. When taxes are reduced, it simply means they pay the government less. It doesn't invert the payer-payee relationship. Government no more "pays for tax cuts" than a burglar who opts to steal your TV but not your stereo has "given" you a stereo.
Well, I feel much better. How about you? I'm sure you've got your own favorite political clichés you'd like to add to the mix. Send 'em my way (am@npri.org), and I'll highlight some of the best submissions in a future column.
Until next time.
Andy Matthews
NPRI President
Remember, if you'd like to receive the latest from NPRI, sign-up for our emails here. Enter your email address in the box on the top right.
Fact checking the Gannett fact checker: Medicare and Social Security are going bankrupt
So, who fact checks the fact checkers? Because Gannett (the company that owns the Reno Gazette-Journal) fact "checker" Jeffrey Bruner needs some serious help.
Here's the set-up. Bruner received a question asking if Medicare and Social Security are going bankrupt.
The first part of his answer shows the serious financial trouble those programs are in.
Medicare's hospital trust fund is fine until 2024, according to Medicare trustees. If no changes were made, it would pay out 87 percent of expenses at that point and a little less every year thereafter. Social Security can pay out full benefits through 2037 (NPRI's note: Actually 2033). At that point, it will have enough money to pay out 75 percent of benefits.With this information, it seems like Bruner will confirm that both Medicare and Social Security are going bankrupt. After all, my Merriam-Webster's dictionary defines "going" as "advance towards an objective." In this case, the objective is bankruptcy, which is defined as becoming insolvent or "unable to pay debts as they fall due in the usual course of business."
With "going bankrupt" accurately defined as advancing towards being unable to pay debts as they fall due in the usual course of business, it's easy to see that's exactly what's happening in both Medicare and Social Security.
For instance, you don't get to keep your house if you can only pay 75 percent of the mortgage.
The answer to the original question seems clear, except that Bruner then writes this.
Yes, there are changes that could be made that would keep Medicare and Social Security strong into the future. But with Medicare fine for another 12 years and Social Security paying full benefits for the next 25 years, it's not accurate to say either program is "going bankrupt."You have got to be kidding me. So Medicare will be bankrupt in 12 years, but it's "not accurate" to say it's going bankrupt?
I think Bruner should change his name to Baghdad Bruner, because such willful ignorance is astounding.
Ignoring the problem isn't going to make it go away - it's only going to make it worse. The time to overhaul Medicare and Social Security is now, and pretending Medicare and Social Security aren't "going bankrupt" only hurts everyone in the long run.
NPRI's 'Piglet Book' reveals hundreds of millions in government waste
The next time a liberal says Nevada's "cut to the bone," show them NPRI's Piglet Book 2012, which details hundreds of millions in government waste that NPRI's uncovered in just the last two years.
Our press release on it is below, but you really should read the whole thing right now.
NPRI's 'Piglet Book' reveals hundreds of millions in government waste
LAS VEGAS - In the last two years, government officials in Nevada have used hundreds of millions of tax dollars to reward political cronies, pay for double-dipping government workers and, in some cases, illegally line their pockets
Those are just a few of the examples of government waste uncovered in "The Nevada Piglet Book 2012." Written by NPRI Deputy Policy Director Geoffrey Lawrence, this year's edition of the Piglet Book details numerous examples of government waste over the past two years, including credit-card abuse, double-dipping, excessive sick-leave payouts and paying union officials with tax dollars to perform union business.
"During the past few years, politicians have repeatedly claimed that they've 'cut to the bone,'" said Lawrence. "The Piglet Book shows just how untrue that claim is. Plenty of waste, fat and abuse lards the arteries of Nevada government, but some lawmakers prefer to keep using tax dollars to benefit themselves and their cronies - rather than simply delivering the services government is suppose to provide.
"What's really sad is that these stories are only the tip of the waste iceberg. Hundreds of stories could have been included in the Piglet Book - and that's only the waste we were able to uncover. During these recent years when taxpayers have had to struggle most, politicians and government employees have continued ripping taxpayers off."
The Piglet Book also details how politicians, such as Sen. Majority Leader Steven Horsford, build political fiefdoms by funneling tax dollars into organizations they control. While in the Legislature, Sen. Horsford directed tens of millions of dollars for workforce development into organizations he helped run as a private citizen. Eventually, many of those tax dollars go to the Culinary Training Academy, where Horsford draws a roughly $150,000 annual salary for a work week averaging 25 hours. Not surprisingly, a state audit recently revealed that nearly 40 percent of federal grant money targeted for workforce training in Southern Nevada went to administrative costs, instead of training workers.
"Using tax dollars to build their own political kingdoms and reward their cronies is yet another reason why government spending should be limited and accountable," said Lawrence.
"The true expense here is not the money lost from government coffers. It's the money - and thus the possibilities - taken from private families. The only way to stop this from continuing is for taxpayers to demand transparency, accountability and limited government."
Lawrence concluded, "While we handle the stories in the Piglet Book a bit lightly, the reality remains that they detail substantial waste, fraud and abuse that lowers the standard of living for every Nevada household."
The Nevada Piglet Book 2012 is available at: http://www.npri.org/docLib/20121023_piglet_2012_final.pdf.
Note: "Piglet Book" is a registered trademark of Citizens Against Government Waste and is used with permission.
Read more:
