Number 11: Horsford: MBT 'hampers job creation' ... let's double it
In the spirit of the 12 Days of Christmas, I'm going to be listing my 12 favorite Write on Nevada posts from 2011. I'll post one each weekday from December 16 to January 2. We love to get your feedback, so please leave your thoughts in the comments. Here's number 11.
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Thoughts on this post: The consequences of raising taxes are well known. So well known that even those doing the raising admit that higher taxes hurt the job creation efforts of individuals.
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Horsford: MBT 'hampers job creation' ... let's double it
As the details of the Democrats' tax package, which would be the largest tax increase in Nevada's history, are introduced as part of SB491, it's worth remembering what Senate Majority Leader Steven Horsford wrote in the Las Vegas Sun on Sunday about the Modified Business Tax.
For example, the current modified business tax hurts small business and hampers job creation.As NPRI has been pointing out for years, Horsford's exactly right here. The MBT hampers job creation and, as such, increasing the MBT would lead to fewer jobs.
Unfortunately for individuals in Nevada, which currently has the highest unemployment rate in the nation, Horsford also wants to double the job-hampering MBT. Under current law, the MBT rate will decrease from 1.17 percent to .63 percent when the 2009 tax hikes sunset at the end of June.
Part of Horsford's plan to raise taxes by $1.2 billion is to permanently extend the 2009 tax increases. Now, Horsford and company do want to eventually replace the MBT with a "margins" tax - which is one of the most economically destructive tax instruments available to lawmakers - but the margins tax wouldn't kick in until 2012.
This means that in the short term, Horsford wants to double a tax he admits "hampers job creation."
Read moreNumber 12: The $1.1 billion education cut myth
In the spirit of the 12 Days of Christmas, I'm going to be listing my 12 favorite Write on Nevada posts from 2011. I'll post one each weekday from December 16 to January 2. We love to get your feedback, so please leave your thoughts in the comments. Here's number 12.
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Thoughts on this post: Liberals love to assume a massive increase in spending and then decry anyone who suggests spending less than their preferred amount as wanting to dramatically "cut" spending. It's a rhetorical tactic passed on deception, and as liberals use it again and again, it needs to be exposed again and again. Here is one way liberals tried to deceive the public in 2011.
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The $1.1 billion education cut myth
Last year, I wrote a commentary called the $3 billion deficit myth. In it, I described how by assuming a $1.5 billion increase in state spending, many ill-informed individuals were overstating Nevada's budget problems. While many public officials and media members have since gotten Nevada's budget situation right, some lawmakers are still using the same tactics to inflate Nevada's budget difficulties.
Nowhere has this been seen more than in the discussion over Nevada's education budget - especially with the claim that Gov. Sandoval's budget contains a $1.1 billion spending decrease to education.
Ways & Means Committee Chair, Speaker Pro Tempore Debbie Smith released the following statement after Governor Brian Sandoval vetoed A.B. 568, the K-12 education budget:This "cutting $1.1 billion from our public schools" claim is false. You can only manipulate your way to this number if you reverse reductions that have already been made and assume spending increases that don't yet exist.
"While I fully anticipated this veto, I question how the governor plans to champion economic recovery, end social promotion, and improve our graduation rates while cutting $1.1 billion from our public schools. ...
"In his veto statement, the governor mentions only spending the money we have and not allowing for additional funding of education. Let me be clear: A.B. 568 does not contain additional funding, but instead prevents massive cuts to public schools-the largest in our state's history. ...
"We remain firm in our commitment to bring much needed reforms to K-12 and to reject the $1.1 billion cut proposed in the governor's budget.
Here's what's actually happening with Nevada's K-12 education budgets (Pg. 37 on this worksheet):
In Fiscal Year 2010, Nevada spent $2.513 billion through the Distributive School Account (DSA).
In Fiscal Year 2011, Nevada spent $2.504 billion through the DSA.
So Nevada spent a total of $5.017 billion in the last biennium on 849,464 students. That's $5,906 per student per year. (Don't confuse this amount with total education spending, which is $9,885 per student. The DSA, which includes some money from local streams, is just the funding level that state government is responsible for.)
For the next two years, Gov. Sandoval has proposed spending the following:
In Fiscal Year 2012, Nevada would spend $2.345 billion through the DSA.
In Fiscal Year 2013, Nevada would spend $2.220 billion through the DSA, plus $161.6 million for Sandoval's block grant program (details here, pg. 5).
Sandoval also wants to spend $241 million more on K-12 education with the extra money projected by the Economic Forum.
That's a total of $4.968 billion on 847,652.1 students. That's $5,861 per student per year.
So Sandoval's proposal would spend $45 less per student for a total two-year spending reduction of $49 million. In terms of percentages, that's a .76 percent reduction to state support and less than a half a percent reduction to total education spending.
To compare, AB 568, vetoed by Sandoval yesterday, would have increased education spending by $660 million from the governor's recommendations. That would have increased education spending to $5.628 billion, which means that Nevada would spend $6,640 per student per year. That means Nevada would have spent $734 more per student each year.
How can Assemblywoman Smith claim that AB 568 doesn't contain additional spending?
How does a $49 million decrease turn into $1.1 billion?
How does a reduction of less than 1 percent equal "a massive cut" to education?
I think the answer to all those questions rhymes with "Higher, higher ants on tire."
And what's a possible reason for this deception? As reported by Jon Ralston last year, here's what an anonymous businessman said about claiming Nevada has a $3 billion deficit.
But then he [the anonymous businessman] called back almost immediately to make two more points. One was that the budget deficit should be pegged at closer to $3 billion by all the politicians to establish a large enough target for negotiations.Is Nevada's current budget debate about the truth? Or is it about manipulating the truth to increase one side's bargaining power?
For those who repeat the $1.1 billion education cut myth, the answer is clear.
For the majority of Nevada's citizens, the challenge now is not to be fooled again.
The 12 days of blogging: The best of Write on Nevada
In the spirit of the 12 Days of Christmas, I'm going to be listing my 12 favorite Write on Nevada posts from 2011. I'll post one each weekday starting tomorrow until January 2.
So, is this a way to shamelessly promote posts from the last year that you may have missed or an easy way to generate content during the busy holiday season? Yes and yes!
But the policy and principles that promote individual liberty, free enterprise and limited, accountable government don't change. Each post applies to a debate, principle or policy that's still very relevant.
The posts will count down from number 12 to my favorite post of the year. Hope you enjoy and Happy Holidays, Merry Christmas and Happy New Year!
The countdown will start tomorrow, but here's an honorable mention. It's a video NPRI did detailing our 20 year history.
Many thanks to our friends and supporters who made - and continue to make - everything NPRI does possible.
Big investment returns for PERS prove NPRI's pension study correct
Last month, NPRI released a study showing that Nevada's Public Employees' Retirement System is dramatically understating its unfunded liabilities.
The central claim of NPRI's study is that PERS does not account for the risk involved in assuming an 8 percent rate of return for investments. A risk-free 8 percent rate of return isn't available, and as a result, taxpayers are subsidizing the risk in the PERS system. Because PERS's payouts are guaranteed, a risk-free investment instrument should be used in actuarial assumption to accurately measure future obligations. To accurately account for guaranteed payouts, PERS' unfunded liability is over $40 billion.
Contrast this with a taxpayer and his 401k, who has to deal with reward and risk. Because it's a government-backed, defined-benefit system, PERS recipients bear no risk. Even if PERS investments crash, they are still entitled to full benefits.
In response to NPRI's study, PERS published "Policy Context on NPRI Pension Advocacy Paper."
In it PERS writes:
Consider this theory in light of the fact that Nevada PERS has generated an annualized investment return of 9.5% for 27 years, exceeding not only the long term investment assumption of 8%, but clearly exceeding the MVL assumed rate (in this case 4%), as well.This is precisely the point! If you are earning a 21 percent return, you are taking substantial risks with that money. Sure the return is high for this year, but so is the risk that those investments will lose money - likely a substantial amount of money - in future years. And right now that risk is unaccounted for in PERS' stated unfunded liability.
Much of this debate is fueled by the difficult market conditions of the last few years. The markets themselves have been extremely unpredictable in the short term. However, even in this most recent decade, Nevada PERS has exceeded the long term investment assumption of 8% in six out ten years. The last two years the System generated 11% and 21% returns respectively. (Emphasis added)
As Andrew Biggs writes in NPRI's study:
Before explaining how economists value liabilities, it may make sense to point out one obvious problem with how public pensions currently measure their finances: A pension plan that takes more investment risk automatically is considered better funded. That improvement in funding occurs immediately, before the higher expected returns are actually earned and increases no matter how much risk the plan chooses to take. As shown above, if PERS shifted its portfolio from one with an expected return of 8 percent to a riskier portfolio with an expected return of 8.5 percent, the measured value of its liabilities would immediately fall by around $2.4 billion and its funding ratio would rise from 70 percent to around 76 percent. On paper, Nevada PERS and pensions around the country could make themselves technically solvent simply by investing in riskier assets.The other problem with assuming an 8 percent rate of return, Biggs notes, is that it will be more difficult to achieve high returns in the future.
Reality is a different story. The obvious flaw with this approach is that a portfolio does not become more valuable simply because it has a higher expected rate of return. Simply put, one dollar of stocks is worth the same as one dollar of bonds. Each has a combination of risk and return that buyers and sellers in the market value at one dollar. But according to GASB accounting, one dollar of stocks is effectively worth two dollars of bonds, because it allows a plan to discount its liabilities using a much higher interest rate. Economists, as a profession, simply believe this approach is wrong - no two ways about it.
While PERS' historical performance has been solid, it may be more difficult to achieve projected returns going forward than it was in the past. The simple reason is that the riskless return paid on Treasury securities - the foundation on which a risky portfolio is built - has fallen. In 1985, for instance, the yield on 30-year Treasury securities was over 10 percent, meaning that a pension plan could exceed 8 percent nominal returns while taking almost no risk. Today, the 30-year Treasury yield is around 4 percent, meaning that a plan must take significantly more risk to generate the same nominal return as in the past. At the same time, PERS notes that its goal for real returns, net of inflation, rose from 3 percent in 2000, to 3.5 percent in 2002, to 3.75 percent in 2003 and 4.5 percent thereafter, despite falling yields on inflation-indexed bonds.It's (way past) time to overhaul PERS. Starting on page 23, Biggs lays out a roadmap for pension reform.
Compare and contrast: Justice Kagan and the Nevada Supreme Court
Earlier this week, Supreme Court Justice Elena Kagan recused herself from a case involving Arizona's controversial law dealing with illegal immigration.
The SCOTUS blog notes that she recused herself because "presumably because she had something to do with the issue in her former role in the Obama Administration Justice Department."
That's how it's supposed to work in court cases. It's impossible for a judge to be a neutral arbitrator in all cases, because they have friends, family and business interests. So, if there's a "proceeding in which the judge's impartiality might reasonably be questioned," Nevada's Code of Judicial Conduct, which is adopted by the Nevada Supreme Court, dictates that a judge should recuse himself or herself.
The code then details that this includes times when "[t]he judge has a personal bias or prejudice concerning a party or a party's lawyer, or personal knowledge of facts that are in dispute in the proceeding" or if a judge is "a party to the proceeding or an officer, director, general partner, managing member, or trustee of a party."
So, let's check. The Supreme Court administers the foreclosure mediation program, helped create the program, implemented it, advertises for it on their website, collects fees from it (although the justices don't benefit from those fees) and publicly brags about the program.
If this isn't a situation where a "judge's impartiality might reasonably be questioned" or a "judge has a personal bias or prejudice concerning a party," I'm not sure one exists.
From the Las Vegas Sun:
The Nevada Supreme Court is in the unusual and uncomfortable position of deciding whether a state program that it operates is constitutional.Here are some of Conklin's comments that the story is referencing:
The court has since 2009 operated a state mediation program, providing a forum in which homeowners and lenders see if they can negotiate a deal to avoid foreclosure. The Legislature created the program after the housing bubble burst and the state became the nation's foreclosure capital. It has so far served more than 12,000 Nevada homeowners. ...
Assembly Majority Leader Marcus Conklin, D-Las Vegas, wondered last month whether the Supreme Court can be unbiased as it decides this case because it collects fees to administer it.
Conklin: It [the Supreme Court ruling the FMP unconstitutional] would be kind of odd, because the court administers the mediation program, and the court system retains all the fees. So sometimes you wonder what, you know, what level of bias there might be, you know, in that process, but I would suspect that they would uphold it.Given this information, let's try some simple logic.
Nevada Newsmakers host Sam Shad: You're concerned about bias from the Supreme Court due to the fact that they collect fees from the program?
Conklin: I'm not concerned about it, but the fact still remains that they administer that program, so, because they administer that program and they know it in detail, you know, I would assume it's awfully hard to argue against.
Not to mention the fact that members of the court were there to testify in support and participate in the drafting of the law in the first place. So, I would hope if there's a constitutionality question, we would have addressed it during the legislative session when we had members of the Supreme Court present.
Nevada's Code of Judicial Conduct, which is approved by the Nevada Supreme Court, says a judge should recuse himself or herself from a "proceeding in which the judge's impartiality might reasonably be questioned."
As detailed above, there are significant reasons to question the impartiality of every Supreme Court justice in the case involving the constitutionality of the Foreclosure Mediation Program. These reasons boil down to the fact that the Supreme Court justices are running the program.
Therefore, as directed by the very judicial conduct code they approved, every Supreme Court justice should recuse himself or herself from the Foreclosure Mediation Program case.
This isn't even a tough call. Nevada's Supreme Court justices need to follow the example of Justice Kagan and recuse themselves.
Sandoval's new plan: Let's use taxpayer money to bail out 'homeowners' ... and banks!
Because government interference in the housing market has worked out so well so far. Let's see, between the Community Reinvestment Act, the Federal Reserve's manipulations of interest rates, the $8,000 tax credit for new home buyers and Nevada's own unconstitutional Foreclosure Mediation Program, I'd say the government has done a great job solving Nevada's housing problems.
Wait ... what? Nevada's mortgage delinquency rate is more than double the national average, at over 12 percent?
I thought all these government programs were supposed to fix this foreclosure crisis.
Not to fear. Gov. Brian Sandoval is about to announce even more government interference in the housing market. Because if one government program doesn't work, the answer couldn't be less government - it must be another government program!
It hasn't been officially announced, but in reading the tea leaves (aka Sandoval's recent interviews with Jon Ralston and Channel 8), I'm going to predict that Sandoval's grand new plan to "help" those in foreclosures involves subsidizing homeowners and banks with taxpayer dollars.
Specifically, I expect an announcement that some banks have agreed to make principal reductions on the mortgages of those facing foreclosure or, at least, an expansion of access to federal subsidies available to "homeowners" facing foreclosure.
Outside of a court order, why would a bank agree to reduce the principal of a loan? Because Sandoval will use some of the $190 million available from the feds in Nevada's "Hardest Hit Fund" to replace some or all of the reduced principal.
Combined with a public information campaign, expanding eligibility and a shiny new website to "streamline" the process of getting federal subsidies, this may score Sandoval political points. It won't, however, fix Nevada's foreclosure problems. Indeed, it will only make things worse.
First, it's unjust to use taxpayer dollars to subsidize the entities - the individual who can't pay his mortgage and the bank that made or bought the loan - that are causing the problem. Now, this money is coming from the feds, so at least Sandoval isn't spending state money. But this interference is still going to make things worse.
By financially rewarding those who are in or near foreclosure, you incentivize other homeowners to flirt with foreclosure and punish those who pay their bills on time. In turn, this depresses home prices, which hurts every homeowner who is doing his best to make on-time payments.
Finally, this prolongs the housing problem, because the market isn't allowed to bottom out and rebound. Instead, these government programs keep the market bouncing along the bottom. This also hurts those who are looking to become new or first-time homeowners.
Imagine if government had stayed out of the way and the housing market had been able to bottom out in 2008 and 2009. We'd likely have been looking at a real recovery this year, but instead, government is still trying to fix the problem it created and elongated.
Two notes: First, since Sandoval hasn't formally announced his plan, I could be wrong about it, and I hope I am. But, given Sandoval's interviews and his plans to meddle in other areas of the Nevada economy, I doubt it.
Second, on a personal level, I sympathize with someone who can't make his house payment and how stressful/horrible that is for him and his family. And no doubt the governor feels badly for such a person as well. But personal feelings of sympathy are not a justification to use government money to bail out individuals and banks, especially when those actions reward the behavior causing the problem and hurt every other homeowner who's doing his best to pay his mortgage on time.
From ReasonTV: A case study on why the stimulus failed
Great, great stuff from ReasonTV. It's yet another reminder of what an epic failure the stimulus was and is. And it should serve as a warning to every elected official in Nevada - starting with Gov. Brian Sandoval - who is looking to government to solve Nevada's economic problems.
(h/t Hotair)
Why separation of powers matters: Collusion between government agencies and elected officials
On Monday, I began a series here at Write on Nevada, detailing exactly why the separation-of-powers provision in Nevada's constitution is essential to protecting liberty.
We've looked at how liberty isn't inevitable and must be protected. We've seen how important the separation of powers was and is to political philosophers, America's founders and the U.S. and Nevada Supreme Court. We've applauded legislators who understand and respect the separation of powers, even if it meant finding a new job. And we've seen the corruption that happens when legislators are allowed to ignore the separation of powers.
And today, I want to share how, for decades, government agencies have wanted powerful legislators on their payrolls, because they "added value" in Carson City and "open[ed] doors" lobbyists couldn't.
And that brings us back to former-assemblyman Wendell Williams, although this story is bigger than one individual. As before this story comes from Steven Miller's most excellent Lawmakers vs. the law series.
It was late November 2003, and for Las Vegas city employee and state Assemblyman Wendell Williams, the days were dwindling down to a precious few.It's time for the judicial system to stop this abuse and enforce Nevada's separation-of-powers provision.
For months, he'd been in political hot water. Now the city council had scheduled a special hearing that appeared to be his last chance to save his $86,000-a-year city job.
As detailed in the third installment of this series, disclosures of Williams' multiple driving and scofflaw-court transgressions across the state had been followed by revelations of scandalous deals with the brass at the Community College of Southern Nevada (now called the College of Southern Nevada).
But it wasn't those issues that were bringing him before the city council on Nov. 25. Rather, it was the fact that, for weeks, reporters at the Las Vegas Review-Journal had been turning up more and more abuses by Williams of his position as a city employee.
And it was dawning on voters - assisted by reporters, columnists and editorial writers at the two major Las Vegas papers - that in this avalanche of preferential treatment for a powerful politician that was creating problems across the state, the City of Las Vegas had never been a mere innocent bystander.
But that, of course, was what the city wanted the public to believe.
Two months earlier, city officials - caught out by damning information about to be made public by R-J reporters probing Williams' personal use of his city-issued cell phone - suddenly announced that the assemblyman would repay the city $1,844 for personal calls made over a 13-month period - the very period of the newspaper's request.
Significantly, city officials made those arrangements with Williams on the same day that reporters were at last receiving the assemblyman's city cell-phone records that the paper had requested.
One day after breaking the cell-phone story, the Review-Journal came out with another blockbuster: During each of the 2003, 2001, 1999 and 1997 legislative sessions, Williams had finagled ways to "double-dip" - to get paid for doing his city job at the same time he was being paid a legislator's salary and per-diem expenses as an active state lawmaker.
For the 2003 session, Williams agreed to repay the city $6,765 for hours he did not work but for which he had submitted false time cards and had been paid. It harkened suspiciously back to 1997, when Williams had also been required to repay the city - that time nearly $4,000 - after it was discovered he had received full-time pay for two weeks of the legislative session. At the time, city officials had publicly blamed the overpayments on "clerical errors."
In 2003, city officials had at least twice sought to conceal the full scope of Williams' fraud against city taxpayers:In response to the newspaper's request for all of Williams' "pay records" for January through July, [reported the R-J,] city officials provided only a summary of revised time sheets, which made no mention of the thousands of dollars in pay discrepancies.During the 2001 legislative session, too, R-J reporters found, Williams had wangled full-time city pay by spuriously billing taxpayers for sick pay, vacation pay and holiday pay.
When questioned last week about the lawmaker's pay while he was in Carson City, city officials also did not acknowledge that they had themselves questioned the hours he claimed during the legislative session.
The Review-Journal interviewed Williams' boss, Neighborhood Services Director Sharon Segerblom, the day after Williams signed an agreement to return to the city more than a quarter of his 2003 pay. She said she "had no reason to question" his time sheets.
"In the communication I had with him, I had no reason to think he wasn't working," Segerblom said Sept. 25.
Williams' timecard had, however, been an issue for months, officials admitted Friday.
According to a breakdown by Las Vegas Sun editorial writers, the assemblyman had "billed the city for the entire time the Legislature was in regular session at his then-wage of $36 an hour. Williams also was brazen in collecting 208 hours of sick time, 112 hours of vacation time and 32 hours of holiday time during that period."
The Sun also noted that Morse Arberry - at the time chairman of the Assembly's powerful Ways and Means committee - had used the same ploy in the 1997, 1999 and 2001 legislative sessions when he, too, was a state lawmaker being paid to nominally work in the city's Neighborhood Services department.
"Based on the information that has been slowly trickling out about Williams - and now about Arberry," counseled the Sun, "the city should ask a government agency or someone not affiliated with the local government to conduct an independent investigation." The obvious problem with the investigation that the deputy city manager was supposedly conducting, noted the editorial, was the "questions as to whether the city government itself has some culpability in this affair," given the power Williams and Arberry had in the state legislature.
But there would be no independent inquiry.
None of the city's higher-ups - administrators or elected officials - saw any percentage in risking an investigation that might get out of control.
An independent investigator, after all, might well parade before voters some of the massive evidence suggesting what had been the city's actual policy: hiring, as city employees, powerful state lawmakers precisely because they were powerful state lawmakers.
Political scientists regularly note that if government can evade constitutional separation-of-power provisions, collusion between actors in the separate branches at the expense of voters and taxpayers easily follows.
As Williams' last-chance hearing proceeded, council members admitted that they were looking at only the tip of the iceberg. Yet other council members just wanted to end any look at the imbroglio at all and quickly "move on," without probing deeper. That, of course, spoke volumes about the actual culture operating within the city's leadership.
But even more direct evidence was being placed clearly on the record.
The de facto policy that had existed within city management when she had been a deputy city manager in the early 1990s, said the now-councilwoman, Lynette Boggs McDonald, had been quite clear.
City officials, she said, definitely wanted legislators on the city payroll - because they "added value."
No other city bigwig at the hearing wanted to touch that radioactive factoid with a 10-foot pole.
Williams himself, however, was more than happy to elaborate.
Given his position as a lawmaker, he said, city officials would call him to "open doors" in the Legislature that regular employees - i.e., hired lobbyists - could not.
The assemblyman didn't seem to get it: Proving the collusion by city government - to those in city government and before the news media - only made him more radioactive.
Within 10 days, he'd been fired.
Why separation of powers matters: Praising Sen. Kieckhefer and Assemblywoman Flores for getting it right
Freedom is fragile. The separation of powers in government is essential to preserving liberty and stopping government overreach.
To have up to 20 percent of Nevada's legislators take an oath to uphold Nevada's constitution and then violate its third article by working for an executive- or judicial-branch employer is a real danger to liberty.
The good news is that many legislators understand this and respect Article 3, Section 1 - even though, for some of them, it meant finding different full-time employment.
Sen. Ben Kieckhefer left his job with DHHS after he was elected to the Senate, precisely because of his respect for the separation of powers.
Before her election as assemblywoman, Lucy Flores worked for the University of Nevada, Las Vegas. In fact, I made mistakenly included her on NPRI's list of legislators who also have or had employment in the executive or judicial branch while serving in the legislature.
Only minutes after CJCL filed its case last week, Assemblywoman Flores called me and let me know that she no longer worked for an executive-branch agency precisely because she didn't want to have to deal with this issue.
That respect for the constitution and her actions should be applauded.
According to her campaign website, Sen. Allison Copening resigned from executive-branch employment to run for office. I don't know if she left her executive-branch job, because she didn't want to violate the constitution or if she needed the time to campaign, but regardless, it was the right decision.
Although there are many legislators who are clearly violating Nevada's constitution, there are also legislators - of both parties - who respect the constitution. And that's a very good thing.
Why separation of powers matters: Thoughts from Madison, Montesquieu, others
Why is the separation of powers essential? I offered my thoughts yesterday, but since everything I wrote was just an attempt to capture the brilliance of Madison, Jefferson, Montesquieu and others, I wanted to share with you some of their quotes on why the separation of powers is so important. All emphasis is added.
James Madison in Federalist 47:
The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, self-appointed, or elective, may justly be pronounced the very definition of tyranny.Montesquieu on the separation of powers:
There is as yet no liberty if the power of judging be not separated from legislative power and the executrix.The U.S. Supreme Court in O'Donoghue v. United States, 289 U.S. 516 (1933).
The Constitution, in distributing the powers of government, creates three distinct and separate departments-the legislative, the executive, and the judicial. This separation is not merely a matter of convenience or of governmental mechanism. Its object is basic and vital, Springer v. Government of Philippine Islands, 277 U.S. 189, 201, 48 S.Ct. 480; namely, to preclude a commingling of these essentially different powers of government in the same hands.James Madison in Federalist 51:
In order to lay a due foundation for that separate and distinct exercise of the different powers of government, which to a certain extent is admitted on all hands to be essential to the preservation of liberty, it is evident that each department should have a will of its own.Thomas Jefferson in Notes on Virginia Q.XIII, 1782:
[A very capital defect in a constitution is when] all the powers of government, legislative, executive and judiciary result to the legislative body. The concentrating these in the same hands is precisely the definition of despotic government. It will be no alleviation that these powers will be exercised by a plurality of hands, and not by a single one. One hundred and seventy-three despots would surely be as oppressive as one.Nevada Supreme Court in its 1967 Galloway v. Truesdell decision:
The separation of powers; the independence of one branch from the others; the requirement that one department cannot exercise the powers of the other two is fundamental in our system of government.Madison in Federalist 48:
Montesquieu has recited the reasons for the desirability of having the governmental powers separate. In City of Enterprise v. State, 69 P.2d 953 (Ore. 1937), he is quoted: "* * * there can be no liberty * * * if the power of judging be not separated from the legislative and executive powers. * * * Were the power of judging joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control, for the judge would be the legislator: Were it joined to the executive power the judge might behave with all the violence of an oppressor."
It is agreed on all sides, that the powers properly belonging to one of the departments ought not to be directly and completely administered by either of the other departments. It is equally evident, that none of them ought to possess, directly or indirectly, an overruling influence over the others, in the administration of their respective powers. It will not be denied, that power is of an encroaching nature, and that it ought to be effectually restrained from passing the limits assigned to it.George Washington in his 1796 farewell address:
The spirit of encroachment tends to consolidate the powers of all the departments in one, and thus to create, whatever the form of government, a real despotism. A just estimate of that love of power, and proneness to abuse it, which predominates in the human heart, is sufficient to satisfy us of the truth of this position.Is the separation of powers essential and should it be vigorously defended? NPRI sides with, to name only a few, Madison, Montesquieu, the U.S. Supreme Court, Jefferson, the Nevada Supreme Court and George Washington in saying, "Yes!"
The necessity of reciprocal checks in the exercise of political power, by dividing and distributing it into different depositaries, and constituting each the guardian of the public weal against invasions by the others, has been evinced by experiments ancient and modern; some of them in our country and under our own eyes. To preserve them must be as necessary as to institute them.
If, in the opinion of the people, the distribution or modification of the constitutional powers be in any particular wrong, let it be corrected by an amendment in the way which the Constitution designates. But let there be no change by usurpation; for though this, in one instance, may be the instrument of good, it is the customary weapon by which free governments are destroyed. The precedent must always greatly overbalance in permanent evil any partial or transient benefit, which the use can at any time yield.
