Reminder: State funding for K-12 education increased last session
One of the many, many terrible things to come out of yesterday's news that Gov. Brian Sandoval and presumed Republican legislative leaders, Sen. Michael Roberson and Assemblyman Pat Hickey, are supporting tax increases is the way they inaccurately described state education funding.
Here's a sampling.
Gov. Sandoval's statement: In addition to avoiding further cuts to education, this decision means there will be no need for tax increases in the next session. Nevadans will pay no more than they are in the current biennium.Reading those quotes, especially the line in the AP story that says K-12 spending was cut about 9 percent, would lead one to believe that state education funding was cut - and dramatically at that. So let's look at the numbers.
Sen. Roberson, from then AP story: "I will not support additional cuts to public education."
Assemblyman Hickey, via the AP: Assemblyman Pat Hickey, R-Reno, the minority caucus leader in the lower house, also said he agreed with Sandoval's position that the state cannot afford any more cuts to education. The state-funded portion of K-12 spending was cut about 9 percent during the last session, and state support for universities and community colleges was reduced 15 percent.
"Nevada's recovery is still fragile and is certainly gradual," Hickey said when reached for comment. "I agree with the governor that education, especially in lieu of reforms that were adopted and cuts that have been made in recent cycles, cannot warrant another hit."
Washoe Superintendent Heath Morrison in a statement: "I appreciate Gov. Sandoval's continuing commitment to education and improving results for all Nevada students. We are exceptionally grateful for his recommendation to extend the sunsetting taxes and to stabilize education funding without imposing further reductions."
CCSD Superintendent Dwight Jones in a statement: "We have our share of financial uncertainty with teacher contract negotiations at a standstill, but it's my hope that with Governor Sandoval's leadership, we can avoid any further cuts in state funding and continue on the path to reform and increased academic achievement to prepare the next generation of Nevadans for college and the workforce.
In 2011 (all years are fiscal years), Nevada spent $5,192 per student in Total Regular Basic Support. Under the budget passed in the last legislative session (p. 8) that amount increased to $5,263 per student in 2012 and increased even more to $5,374 per student for 2013.
Wait a second. Going from $5,192 a year to $5,263 in 2012 to $5,374 in 2013 isn't a decrease - it's an increase of $182 per student! Apparently, a 3.5 percent increase in the midst of a recession is what these government officials call a "cut."
Even if you consider total state education funding, which includes class-size reduction, special education and several other categories, total state education funding in 2012 is projected to be slightly more than what was actually spent in 2011 and increase further in 2013. In terms of both actual spending and per-pupil spending amounts, Nevada is spending more than before on K-12. (Actual per-pupil spending is over $10,000 per student. The $5,263 figure is just state funding. Overall, local funding has decreased, but that's unrelated to state funding.)
Where are the "further" or "additional" cuts in state funding? What are they referring to?
I don't know, because they are factually wrong - as one can plainly see by looking at the budget the Legislature and governor approved just a few months ago.
Elected officials, media members and citizens who are interested in a little thing called "The Truth" should point this out, and Sandoval, Roberson, Hickey, Morrison and Jones should all issue retractions of their inaccurate statements.
When an increase in education spending is derided as a spending decrease, you begin to understand how Nevada has tripled inflation-adjusted, per-pupil spending in the last 50 years while student achievement has stagnated and our graduation rate has fallen to 45 percent.
The focus must change from education funding to student achievement. Only then will we see the dramatic increases in student achievement that states like Florida have enjoyed.
Read moreNPRI: Sandoval wrong to propose raising taxes
LAS VEGAS - In response to the news that Gov. Brian Sandoval will instruct government agencies to budget as if the sunset taxes will continue in the next biennium, Geoffrey Lawrence, deputy policy director at the Nevada Policy Research Institute, released the following comments:
Taxpayers lose again with Governor Brian Sandoval's decision to propose extending the so-called "sunset" taxes. 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, Governor Sandoval stated that raising taxes is "the worst possible thing you can do" after a recession. 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. Entrepreneurs and job creators have been planning their investments on the promise that "temporary" rate hikes in the modified business tax and business license fees begun in 2009 would disappear next year. Let there be no mistake - proposing to reestablish a tax that is scheduled by law to disappear is a tax hike.
After breaking his "no-new tax" promise to voters at the end of the 2011 legislative session, it is extremely disappointing for taxpayers to see Governor Sandoval break his promise again - 10 months before the legislative session even begins.
The governor is correct in noting that the massive Medicaid expansion that ObamaCare seeks to impose on the states would mean a huge new state liability beginning in the next budget cycle, one that would only grow worse over the next decades.
It was disingenuous for Congress and the president to pass such a huge entitlement expansion even though they had no willingness to fully fund it themselves and so levied a huge unfunded liability on the states.
An econometric analysis performed by NPRI shows that ObamaCare, unless derailed by the U.S. Supreme Court or through the legislative process, will cost the state of Nevada at least an additional $5.4 billion in Medicaid costs by 2023. That's due to the compulsory loosening of eligibility requirements and the individual mandate provision, which - taking effect in 2014 - will begin undercutting the state's ability to finance education and other services. This reality is precisely why NPRI has been critical of ObamaCare from its inception.
Even in the face of ObamaCare's costs, however, Governor Sandoval was not compelled to expose the struggling Silver State economy to the prospect of higher taxes. Just last week, NPRI released an 88-page guide for cutting costs using proven techniques already implemented in other states. Solutions 2013 explicitly recognizes the impending new Medicaid burden that would be imposed by ObamaCare, but shows how to reduce spending in other areas to offset this liability without sacrificing quality. The governor and his staff should use the ideas in this publication to decrease costs while increasing results, rather than again break his pledges to state taxpayers and prospective job creators.
The rising costs of ObamaCare should be the impetus to transform state government by creating charter agencies, establishing performance audits, outsourcing agency functions competitively, eliminating the billions wasted through prevailing-wage requirements, and by giving parents a choice in their children's schooling. It should not be used as a weak excuse for raising taxes on struggling Nevada families.
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New Nevada Superintendent James Guthrie: School funding is a "phony crisis"
Earlier today, Gov. Brian Sandoval announced that he has appointed James Guthrie as Nevada's next superintendent of public instruction.
As Sandoval has been right on the money with his previous education reform proposals, I'm optimistic Guthrie will be an excellent superintendent. Two other things should make all Nevadans excited about this selection.
First, noted education-reform expert Jay P. Greene has said that "Guthrie is great" and that Guthrie supports school choice.
Second, Guthrie might be the perfect person in the perfect position to counter the notion that Nevada needs to "invest" in education (aka spend more to get the same results). As Guthrie has written, money is not the problem in education today.
Chicken Little is alive and seemingly employed as a finance analyst or reporter for an education interest group. If one relies on newspaper headlines for education funding information, one might conclude that America's schools suffer from a perpetual fiscal crisis, every year perched precariously on the brink of financial ruin, never knowing whether there will be sufficient funding to continue operating. Budgetary shortfalls, school district bankruptcies, teacher and administrator layoffs, hiring and salary freezes, pension system defaults, shorter school years, ever-larger classes, faculty furloughs, fewer course electives, reduced field trips, foregone or curtailed athletics, outdated textbooks, teachers having to make do with fewer supplies, cuts in school maintenance, and other tales of fiscal woe inevitably captivate the news media, particularly during the late-spring and summer budget and appropriations seasons.
Yet somehow, as the budget-planning cycle concludes and schools open their doors in the late summer and fall, virtually all classrooms have instructors, teachers receive their paychecks and use their health plans, athletic teams play, and textbooks are distributed. Regrettably, this story is seldom accorded the same media attention as are the prospects of budget reductions and teacher layoffs.
For a variety of reasons, from one year to the next, schools almost always have more real revenue for each of their enrolled students. For the past hundred years, with rare and short exceptions and after controlling for inflation, public schools have had both more money and more employees per student in each succeeding year. Teacher salaries have increased more than 42 percent in constant dollars over the past half century, while educators' working conditions, health plans, and retirement arrangements have become ever more commodious. Moreover, school-related revenues and employment levels have increased even when the economy (as measured by Gross Domestic Product or GDP) turned down, unlike what typically happens in sectors such as manufacturing and retail sales, where recessions trigger cutbacks in personnel and profits.
And elsewhere, Guthrie has written:
Myth: America's schools have been underfunded for a long time - now is the worst time to cut spending further.And while Guthrie was speaking about nationwide spending in that last question, Nevada has also nearly tripled inflation-adjusted, per-pupil spending in the last 50 years.
Fact: Schools have been riding a century-long wave of rising revenues.
Per-pupil-spending today, adjusted for inflation, is triple what it was 50 years ago. To be fair, this is a national picture that does not hold for every locality. Nor does it account for the added cost of our now including handicapped children in public schools. Still, in most places, real dollar school spending has been increasing for a long time
Stockton, Calif. about to become the largest municipality to file bankruptcy
Two of the biggest factors in the upcoming bankruptcy in the city of 300,000: sweetheart deals for union employees and failed government-led economic development efforts.
Within the next three months, Stockton could become the nation's largest city to file for protection from creditors under U.S. bankruptcy code. Using a new California law, the City Council is trying to slow or stop the bust by entering mediation with creditors, including public employee unions. In the meantime, the Central Valley port city of 300,000 has suspended several bond payments and will not cash out vacation or sick time for employees who leave. ...Doling out redevelopment money to private businesses and organizations? Overpaying government employees? Does that sound familiar to anyone living in Nevada ... or to everyone living here?
[Former president of the Stockton Chamber of Commerce Joe Bryson] lives across the street in the historic Stockton Hotel, one of downtown's beautifully restored buildings, now given over to low-income housing. The city provided more than $2 million in redevelopment funds to get Paragary's restaurant on the hotel's ground floor. Gone now is the aroma of hand-cut rosemary noodles with seared chicken that would drift up to the rooms of the people who couldn't afford to eat out.
There's a lot of blame going around Stockton, Bryson says, but he still thinks past leaders should be given credit for trying to transform the city's gritty urban core, where grand brick buildings had become flophouses along a waterfront where most of California's export agricultural bounty sets sail.
"They didn't know people were going to stop paying their taxes," he says.
This brings Guy Domench, a repairman who was working on the bar's jukebox, to his feet.
"People are paying plenty of taxes. This is a high-tax town," he said. "The problem is the sweetheart deals they gave the employee unions. I'm 56 and I can't retire; I'd go broke. But these public employees have tremendous retirement deals. I want to see the city go bankrupt now. Break the deals." (Emphasis added.)
The financial problems in Stockton aren't unique. Many other cities around the country, like Harrisburg, Pa., which just defaulted on its bond payments, and the City of North Las Vegas, are facing the inevitable consequences of overpaying unionized employees, stockpiling debt and funneling money into redevelopment projects.
One reason believers in limited, accountable government say that the exorbitant salaries and pensions most government employees in Nevada receive are unsustainable is that those salaries and pensions are, as Stockton and Harrisburg show, unsustainable.
Two reasons believers in free enterprise say that it is wrong for the government to take from one business to subsidize its competitor are that A) it's unjust for government to take money from one business or individual to subsidize another business and B) government usually makes terrible business decisions.
It's (way past) time to end collective bargaining for local government employees, which is largely responsible for the enormous salaries and pensions those employees receive, and to end government's attempts to pick economic winners and losers under the guise of economic development.
Reason TV: Cough drops - the new mandate
Reason TV's take on the mandate debate. Enjoy.
If you missed NPRI President Andy Matthews' take on the real issue behind the contraception controversy, it's available here.
Rush to avoid debate no Fluke
A great column today from NPRI President Andy Matthews on the Rush Limbaugh and Sandra Fluke brouhaha:
I'm not interested in rehashing the details of the Rush Limbaugh/Sandra Fluke controversy, because this sensationalist storyline has distracted so many people from the infinitely more important debate on whether the federal government ought to be able to force health-insurance providers to cover the purchase of contraceptives.If you'd like to get more great commentary, like this, delivered to your inbox, there's a sign-up box for Write on Nevada on the top of this page's right-hand column. And if you'd like to get the latest in research, policy analysis and letters from Andy, go to npri.org and enter your email in the sign-up box on the top right.
It is, fundamentally, a debate over the very nature of government. It's a debate that those of us who believe in limited government and individual freedom ought to welcome. And it's one we need to win.
That's because it's a debate that so perfectly illuminates the core differences between the two main competing ideologies in this country.
Those on the Left believe in using the power of government to ensure that the choices they have identified as "for the public good" are forced upon all - even when it comes to the finest details of individuals' lives. Hence their belief, for example, that government can and should tell health-insurance providers that they must cover contraceptives (or tell the auto industry what kinds of cars to produce, or restaurants what kind of foods they can offer, or...).
On the other side of the debate are those of us who believe in the fundamental right of individuals to make these decisions for themselves. We may disagree internally as to the "right" choices on a whole array of issues, but ultimately, we agree that it is not the government's role to force a one-size-fits-all approach onto all of society.
That's why you see opponents of the contraceptives mandate arguing that government shouldn't force providers to offer that coverage, but you don't see us arguing that government should ban providers from doing so (or force automakers to produce gas-guzzlers, or restaurants to offer fatty foods). The argument, to us, isn't about contraception or fuel efficiency or proper dieting at all. It's about freedom.
Whatever one thinks of contraception, we should all be able to agree on this principle: It is not the government's place to mandate that insurance providers cover it. That's a given in a free society. What makes those on the Left so dangerous is not their view of contraception. It's their belief that government has a nearly unlimited right to tell people what to do - i.e., their implicit rejection of the very idea of a free society.
That is the most fundamental difference between our nation's two dominant political philosophies. Those of us who believe in freedom need to constantly remind citizens that we don't differ from the Left because we think we can run your life better than they can. We differ from the Left because we don't want to run your life at all. That's your job.
Now go out and have a fun weekend - if you want to.
Take care,
Andy
Tuition at 31 of Las Vegas' 34 private schools is less than what CCSD spends per pupil
Remember this the next time someone starts talking about "investing in education." If we are really interested in "investing" in education, let's put our dollars into the hands of parents who can select schools that are delivering better results for a fraction of the cost of public schools.
Vegas Inc assembled a list of the private schools in the Las Vegas area, and the vast majority of those schools charge less than what CCSD already spends per student.
For this current school year, CCSD is spending $9,152 per-pupil for current expenditures, which excludes debt repayments and capital costs. Twenty-five of the 34 schools* listed by Vegas Inc cost less than that per year. Eighteen of those schools cost less than $7,000 a year.
If you include debt repayments and capital costs (as tuition does for a private school), CCSD is currently spending $12,370 per student. Compared to that amount, 31 of the 34 private schools listed by Vegas Inc are cheaper than what CCSD currently spends per pupil.
This is by no means a perfect comparison. CCSD should have enormous "economy of scale" advantages, and many of the private schools probably fundraise to cover part of their budgets.
What this shows, however, is that if Nevadans are serious about "investing in education," we need to examine low-cost alternatives and figure out why Nevada has nearly tripled inflation-adjusted, per-pupil spending in the last 50 years while student achievement has remained stagnant.
If we're really "investing" to get results in education (and not just sending more money into a broken system), it won't end up costing more.
*Vegas Inc lists 38 private schools, but four did not supply their tuition rates. I excluded them from this list.
Government math: Las Vegas spends $185 million to save $400,000 a year in energy costs
I'm referring, of course, to the new Las Vegas City Hall.
City officials, led by Mayor Carolyn Goodman, have been putting out a ridiculous talking point, bragging that the new city hall will save Las Vegas $400,000 a year in energy costs.
"This is an incredible night for us all," the mayor [Carolyn Goodman] said.The same talking point has also been in the RJ multiple times.*
She said the energy efficient building, which features 33 "solar trees" in the front that generate electricity, will reduce the energy costs by more than $400,000 a year.
Now, we at NPRI are all about saving money, but that's not what's happening here. What Mayor Goodman fails to brag about is that city hall mortgage payments are going to grow from $3.5 million in Fiscal Year 2013 to annual payments of $13.4 million in FY 2017. To compare, the old city hall was paid off.
So savings of $400,000 a year will bring the net mortgage payment down to ... $13 million a year.
Yep, Las Vegas will spend $13.4 million a year to save $400,000 a year.
No wonder, former-mayor Oscar Goodman called critics of government-led economic development efforts, like the Mob museum, "monkeys" and "morons."
Anyone can see that it's a great idea to spend $185 million to save $400,000 a year, because by the year 2474, the new Las Vegas city hall will have finally paid for itself.
*Reporters on this issue have done a good job pointing out that the building is going to cost $185 million, so this blog isn't a knock on them. It's just a demonstration of how ridiculous government officials can be when trying to justify wasting your money. Don't let them fool you.
If more types of taxes solve budget problems, why is California running out of money?
After the 2012 election, expect many liberals to start asserting that Nevada needs to "reform" its tax code.
Two things to note here. First, by "reform" those liberals, as they showed last session, mean increase. Going behind the rhetoric, the above sentence actually means, "After the 2012 election, expect many liberals to start asserting that Nevada needs to increase taxes by creating a new type of tax."
Second, most liberals will pretend they don't want to increase taxes in order to try and get elected. Even Sen. Steven Horsford, when he was running for state senate in 2008 and a few months before he voted for the largest tax hike in Nevada's history, said, "I won't support tax increases -- not when the private sector is losing revenue and losing jobs."
So after not being honest with voters, here's the argument liberals will make. If Nevada had another type of tax (like a margins tax) - a third leg on Nevada's tax "stool" - Nevada's budget problems would be solved.
If that's the case, California - with a personal income tax, corporate income tax, and sales tax - should be the model of fiscal stability. Oh, wait. California is currently running out of money.
California is going broke. Again. The state controller has estimated that the state will run out of money sometime this month. California will need to find $3 billion in cuts or revenues to keep the state in the black through the rest of this fiscal year.Just more evidence that controlling spending is a much, much bigger factor in a state's fiscal condition than the types of taxes a state has. That's certainly the case in Nevada, where, despite all the overblown complaints about spending reductions last session, the state is still spending substantially above the inflation-adjusted, per-capita spending level Nevada had in 1994.
And next year looks even worse. California's Legislative Analyst Office projects that, even with billions in one-time revenues from Facebook's impending IPO, Gov. Jerry Brown's budget will run a $6.5 billion deficit.
Now, if there are lawmakers who are interested in revenue-neutral tax reform, NPRI has put forward an excellent proposal, called One Sound State. But NPRI's tax reform proposal is a proposal for tax reform, not increasing taxes under the guise of reform.
This proposal will show if left-leaning politicians are interested in reform or in just spending more of your money.
Reason TV: Attack ads, circa 1800
The next time someone complains that modern politics is getting too divisive or polarized, just show them this video.
As the words (and attack ads) of President John Adams and President Thomas Jefferson show, those who pretend politicians from 200 years ago were the standard of civility - that we should emulate - don't know their history. And if you don't agree with me, you must want children to writhe on a pike.*
*I assume everyone will understand that's a reference to the video, but if not, watch the video!
