Sandoval raising taxes to increase government employees' pay, funding for full-day K
In March 2012, Gov. Brian Sandoval announced that he supported raising taxes by extending the "temporary" sunset taxes. In a statement released by his office, he said:
In order to avoid cuts to education and other essential services, revenues from the sunset taxes will need to be continued.
Let's leave aside the fact that the best reforms, like the ones repeatedly highlighted by NPRI, save money while increasing results, especially in education. Has Sandoval supported raising taxes solely in order to avoid "cuts"?
Nope. Not by a long shot. Instead, he originally proposed spending tens of millions of dollars more on pre-K and full-day kindergarten programs that produce only minimal and temporary learning gains.
Fast forward to this week, when Gov. Sandoval is playing Santa Claus — tens of millions more to wasteful government programs and special-interest groups, financed by raising your taxes.
Gov. Brian Sandoval announced Monday that he wants to spend $25 million more than he previously proposed on K-12 education in the next biennium.
The funding will be directed to programs to help English language learners and to expand all-day kindergarten. It will bring the total new commitment to the two priorities in Sandoval’s recommended budget to nearly $60 million.
Sandoval also wants to increase state worker take-home pay.
State employees will no longer have to take unpaid furlough days, starting in July 2014, Gov. Brian Sandoval said.
The governor’s original budget provided for decreasing furlough days from six to three per year for the next two years.
Now, Sandoval’s $12 million plan calls for three furlough days between July 1 and June 30, 2014, and no furlough days between July 1, 2014, and June 30, 2015.
Funneling more money to wasteful education programs? Increasing the pay received by state workers?
Gov. Sandoval is raising taxes to increase government spending, not just to avoid cuts.
Read moreUnions want to prevail over taxpayers
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.
Unions want to prevail over taxpayers
Political power often translates into taxpayer-funded handouts to special-interest groups, but rarely is that dynamic seen so clearly as at the Legislature this last Wednesday, when Nevada’s labor unions held a small rally protesting a bill proposal by Assemblyman Cresent Hardy.
Hardy’s bill, which had a committee hearing Wednesday, would raise the threshold for when government construction projects must pay prevailing-wage rates from $100,000 to $1.5 million.
The prevailing wage is supposed to approximate the wages that “prevail” in the marketplace, but state regulations ensure that the vast majority of these wage rates are set at union rates — which are substantially higher than market rates.
So when a government entity in Nevada seeks a bid for a construction project worth more than $100,000, it doesn’t pursue the best deal. It requires that the winning contractor pay its employees at the “prevailing” wage rate — even though this substantially increases the cost to taxpayers. A study by NPRI’s deputy policy director, Geoffrey Lawrence, estimated that this requirement cost taxpayers almost $1 billion in 2009 and 2010. That’s a billion dollars less for building schools and roads or that could have been returned to taxpayers.
So if taxpayers lose, who wins? Labor unions — one of the most powerful special-interest groups in Carson City.
Requiring higher wages makes higher-priced union labor competitive. How high-priced is this labor? Consider these “prevailing” wage rates in Clark County: A flagperson must be paid at least $43.79 an hour in salary and benefits. A painter must make at least $47.58 an hour in total compensation. An alarm installer must make at least $56.87 an hour in total.
Yet these high wage rates didn’t keep labor lobbyist Al Martinez from crying, “When you go below the prevailing wage you can’t survive on that salary.”
Yes, how could anyone survive making less than $40 an hour, which is over $80,000 a year, in pay and benefits?
The whole thing reminds me of something Frederic Bastiat wrote in his classic book, The Law.
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.
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.
Bastiat wrote those words more than 150 years ago, but his recommendations couldn’t be more spot-on today. The Legislature should abolish Nevada’s prevailing-wage law without delay and ignore the sophistry spouted by vested union interests.
In other news, yesterday NPRI filed a public-records lawsuit against the Clark County School District. All the details are here, and we’ve already received a bunch of positive feedback. It appears we’re not the only ones excited to have the ability to try to compel CCSD to follow the law, instead of just asking nicely.
What are your thoughts on the prevailing wage or on NPRI’s lawsuit? Please let me know.
Finally, if you celebrate Easter, I hope it’s a blessed one.
Take care,
Andy Matthews
NPRI President
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Liberals to taxpayers: Please ignore your lying eyes
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.
Liberals to taxpayers: Please ignore your lying eyes
Any time you shine a light on the practices of government, you’re bound to hit a nerve. That was certainly the case with my recent commentary in the Las Vegas Review-Journal, which highlighted 2012 employee-compensation data for the Las Vegas Metropolitan Police Department, posted recently at TransparentNevada.com.
The commentary drew the ire of liberal RJ columnist Steve Sebelius, who accuses NPRI of, among other wrongs, distorting the data.
Sebelius argues that the compensation levels I referenced in the commentary — including 149 Metro employees who brought in more than $200,000 last year — were misleading, because I supposedly implied that these numbers reflected salaries alone, rather than the total compensation levels (salary plus benefits, overtime, etc.) they actually represented.
It’s a curious charge, inasmuch as I very clearly used the term “total compensation” in the piece. One is tempted to assume that Sebelius simply missed this, except that in his own column, he cites my use of the term “total compensation.” Apparently, to Sebelius, to use the term “total compensation” when one really means “total compensation” is misleading.
Furthermore, there’s a reason why, when it comes to Metro, it’s important to focus on the total compensation figures, rather than just on base salaries — as Sebelius would clearly prefer to do. That’s because department employees receive, in addition to their base pay, compensation in more than a dozen other categories, many of which are nearly unheard of in the private sector. These categories include not only health benefits and overtime pay, but also longevity pay, call-back pay, uniform allowance, shift differential pay, payments for unused vacation and sick days upon retirement, and more.
In fact, when one looks at captains, lieutenants, sergeants and officers as separate classes, the average employee in each enjoys a benefits package worth more than 50 percent of the base pay. And that still doesn’t include multiple other categories of compensation.
So to report only the base pay would fall far short of providing an accurate depiction of what Metro employees actually cost taxpayers. And to present base pay alone as “total compensation” would be highly inaccurate and misleading.
Sebelius is free to argue that these total compensation levels are justifiable. That he chooses not to, but opts instead to pretend that the data (provided to NPRI by Metro itself, by the way) is somehow flawed, suggests that even he recognizes the weakness of such an argument.
In my commentary, I noted that the release of this compensation data comes at a time when Metro is pushing for a sales-tax hike in order to increase the department’s funding, and is issuing ominous warnings that a failure to secure new revenues will threaten public safety.
Again Sebelius takes issue with my point, writing: “And how’s this for irony: NPRI complains about six-figure salaries augmented in many cases by overtime pay. But if we were to pass the quarter-cent sales tax and hire more officers, we wouldn’t need to pay so much overtime.”
The real irony, however, is that Sebelius is advancing this argument when not even Metro itself is pretending the tax hike would be used just to hire more officers. While that was indeed the originally stated justification for the tax increase in 2004, Metro is now seeking “flexibility” in how to spend the money — meaning the new funds will be used to maintain or even increase current employees’ already-exorbitant compensation levels.
Finally, Sebelius finds a contradiction in the fact that NPRI operates a government-transparency website but doesn’t release its own salaries and donors. Surely Sebelius, as a member of the press, grasps the difference between financial information on private entities — funded only by those who willingly choose to do so — and public ones — which we are all forced to fund, whether we like it or not.
And that is exactly why NPRI created TransparentNevada to begin with. Taxpayers deserve to know how and where their money is being spent, and they’re free to visit the site, view the data and decide for themselves whether public funds are being allocated wisely. In the meantime, we at NPRI will keep supplying this crucial information — no matter how many nerves we strike.
Take care,
Andy Matthews
NPRI President
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Where we all should agree
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.
Where we all should agree
Earlier this week, we at NPRI updated our government-transparency website, TransparentNevada.com, with 2012 salary data for the Las Vegas Metropolitan Police Department.
The release of this data has generated a lot of media coverage, helping to bring increased public attention to the handsome compensation levels that many Metro employees enjoy. The data shows, for example, that 149 employees took home more than $200,000 in total compensation last year, and that 888 of them brought in more than $150,000.
The timing of this release was appropriate for two reasons. One is that this week, March 10-16, is Sunshine Week, a national effort to raise awareness of the importance of making government more transparent. The other reason is that Metro is currently pushing for a sales-tax increase for the purpose of generating new revenue for the department, and wants “flexibility” in how the additional funds would be spent — meaning the money would be unlikely to go toward the hiring of new officers, the original justification offered by tax-hike proponents.
Most of the responses to the release of this data, and to NPRI’s commentary on it, have reflected outrage — over both the high compensation levels and the claims by Metro brass that the department is underfunded.
Some people, however, have expressed a different view. These folks have argued that Metro employees deserve the salaries they draw and, in fact, should make even more. A few have even directed some unfriendly words toward yours truly for arguing otherwise.
I’ve been asked a few times whether this criticism bothers me. It doesn’t, and here’s why: I’m grateful for the opportunity even to have this debate.
Our chief motivation for launching TransparentNevada back in 2008 was our recognition of the fact that for far too long, government in Nevada had been extremely opaque. This meant that debates over government spending were held largely in the dark, with neither side of the discussion knowing much about what we were already spending, and where. The debates may have been lively, but they were mostly uninformed.
Making information on government financing readily available to the public changes that, and that’s what TransparentNevada does. Whether you believe government is currently spending too much or too little, you now have the ability to base your view not just on ideology, but on fact. It’s a very important shift.
And there’s another reason why government transparency is especially important today. Given all the economic and fiscal challenges Nevada is now facing, it’s more crucial than ever that government operate as effectively and efficiently as possible. Taxpayers of all ideological stripes need to be able to see for themselves how responsibly Silver State politicians are allocating public funds.
Make no mistake: That NPRI falls within the limited-government camp is certainly no secret. And we will continue to be firm in our support for public policies that rein in government spending and empower the private sector to drive economic growth.
But whether you agree or disagree with that position — whether you think we need bigger government or smaller government — I hope you at least share our view that we need open government.
After all, it’s your money. And you deserve to know what your elected officials are doing with it.
Until next time, take care.
Andy Matthews
NPRI President
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Super intentions
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.
Super intentions
So Dwight Jones is out as Clark County School District superintendent, the news breaking this week that he is resigning effective March 22 so that he can care for his ailing mother in Dallas.
I’ve already been asked more times than I can count for my reaction to the news, with most questions focusing on 1) Jones’ performance in his two years on the job, and 2) what his departure will mean for education in Clark County.
It’s difficult to assess where Jones’ performance would rate on the traditional A through F scale. Given the brevity of his tenure, he probably warrants an “Incomplete.”
But I think that to the extent he leaves a legacy, it is this: He came to the job with great intentions, accomplished some modestly positive things, but in the end proved incapable of fully overcoming the structural impediments to meaningful change.
At his best, he was a superintendent who was not afraid to take on the powerful teacher union, who took some positive steps toward greater school and teacher accountability and who made school district practices a bit more transparent; at his worst, one who allowed himself to become part of the chorus clamoring for higher taxes as a means of improving student achievement.
But even with that blemish on his record, it can be said that Jones, much like Gov. Brian Sandoval and state Superintendent of Public Instruction James Guthrie, recognized that spending more money on a structurally flawed system is not the path to improvement. Deep, systemic reforms are in order, and Jones deserves credit for at least nudging the district in that direction. The problem is that monoliths are hard to move.
Which brings us to the future. The monolith must be moved, for the sake of Clark County’s children. Whoever replaces Jones should embrace the reforms of the past two years, and then build upon them. Most important, though, is this: Whether at the state or local level, education policy in Nevada must be guided by an understanding that the way to truly improve student achievement is to empower parents with more control over how and where their children are educated.
It’s far too rare that someone like Dwight Jones, willing to speak hard truths and shake things up, is even given a chance to run a school district. So credit the school-board trustees for making the bold choice to bring him in to begin with. Now let’s hope they’ll have the courage to stay the course.
Thanks for reading, and I’ll see you next time.
Andy Matthews
NPRI President
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NSEA spent over $644K getting signatures for margin tax
Tomorrow, the Legislature is going to hold on hearing on Initiative Petition 1, aka the margin tax. What you won't be told is that NSEA spent over $644,000 to gather signatures for its initiative.
That's a good factoid to remember the next time a union bosses tries to brag about having "over 150,000 folks" sign the petition. Those signatures cost over $4 a pop. This chart is on page 12.
NSEA has over $1 million left to try and convince the public that raising taxes on businesses that are losing money is a great idea, but my favorite fact comes at the bottom under the heading "legislature." Here's what NSEA writes:
The goal was to protect members' jobs, salaries, and benefits and to engage the Legislature with an aggressive pro-education platform.
For NSEA it's not about the children, it's about paying the adults more for things unrelated to student achievement.
Sequester jesters
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.
Sequester jesters
I know what you’re thinking.
All the doomsday talk coming out of Washington, the promises about the dire consequences of sequestration, the warnings that life as we know it will end if the federal government doesn’t strike a deal to prevent the looming spending cuts … why, you can almost hear Bill Murray yelling in the halls of the Capitol: dogs and cats, living together — mass hysteria!
And the most terrifying thought of all: Could this really be the last Week in Review you’ll ever read?!
Well, I don’t want to come off as callous or dismissive of these doomsayers, but let’s just say I’m bullish on the sun rising on Saturday morning.
The context for all the fretting is this: Without action by our national leaders before the end of the day today, a series of cuts in federal spending will automatically kick in. Describing the impact of those cuts, President Obama said recently, “The sequester will weaken America's economic recovery. It will weaken our military readiness. And it will weaken the basic services that the American people depend on every single day.”
Sounds terrible. But we could use a little more context.
The sequester, if it comes, will result in cuts of about $85 billion from the federal budget. That sounds like an awful lot of money — until you remember we’re talking about, you know, the federal budget, of which the cuts constitute all of 2.3 percent. And that the federal budget has grown by 40 percent since 2007.
Raise your hand if you’ve ever had to cut 2.3 percent from your own personal budget. And keep it up if it led to a complete shattering of your world. Didn’t think so.
To put the sequester in further perspective, check out this chart from Americans for Limited Government, which shows that even with the cuts, federal spending would still increase this year compared to last, and would continue to increase each year going forward:
In addition, the Reason TV's Nick Gillespie does a great job of demonstrating just how overblown is the rhetoric coming from the president. I urge you to watch the full video, but here’s a particularly revealing excerpt:
The White House’s Office of Management and Budget says the sequester will cut a whopping $2 million from the $20 million budget for the National Drug Intelligence Center. That sounds pretty bad — until you realize the Drug Intelligence Center closed its door in June 2012.
In other words, we’re all supposed to be terrified about the supposed impact of cuts to a program that doesn’t even exist.
There are two particular facets of this whole debate that really underscore the main problems with government today. First, if the 2.3 percent cut really would gut essential services, then here’s my question: Why in the world have our politicians designed the system in such a way that the most important spending priorities are the first to go on the chopping block? If you had to cut your personal budget, you’d probably reduce spending on entertainment before food, no? Can’t government do something similar?
But second and more important is this: The federal government, even if the sequester were to take effect, still spends way, way too much money. If we can’t trim 2.3 percent of the budget without encountering howls of protest, how are we ever going to do the really heavy lifting — like reforming our entitlement programs?
I’d be curious to get your take on all this. Do you agree with me? Or are you fearful that the sequester will indeed have a negative impact on your life? Send me your thoughts at am@npri.org.
Thanks for reading, and I’ll see you next time … maybe.
Take care,
Andy Matthews
NPRI President
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Reid it and weep
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.
Reid it and weep
Earlier this week, U.S. Senate Majority Leader Harry Reid delivered an address before the Nevada Legislature. As I was reading through the transcript — it’s better for my blood pressure to read than to watch — I was struck by how much of what Sen. Reid said was either a distortion, based in ignorance or simply not true.
While it’s impossible to address all of the deceptive parts of Sen. Reid’s speech, here are the parts that really stood out to me.
In 2004 the residents of Clark County decided they needed more police officers on the streets and voted for a small sales tax increase to pay for them. This legislature provided half the increase in 2005, but told law enforcement to return to ask for the other half.
Clark County law enforcement officials have waited seven years to put more cops on their beats, and the people they protect can wait no longer. Putting more police on the streets is vital to ensuring our neighborhoods are safe.
It sounds nice, but Las Vegas Metro doesn’t want to increase taxes on Clark County residents to hire new cops. Metro wants “flexibility” in how it can use that money. And since Nevada’s collective-bargaining laws give enormous power to labor unions, “flexibility” will mean a fat pay raise for the 1,998 Metro employees who took home more than $125,000 in pay and benefits in 2011 and the 852 employees whose compensation topped $150,000.
Sen. Reid continued:
But despite a decade of rumors and several concrete proposals, Las Vegas still doesn't have a major, multi-use arena — the kind of stadium that could host anything from a concert to a major sporting event. ...
But it's time we united around this idea to move Southern Nevada's economy forward.
Now, it would be great if a private company wanted to fund a stadium or dome, but scores of economists have shown that publicly funded stadium projects don’t move economies forward — they actually reduce inflation-adjusted, per-person income. Villanova University professor Rick Eckstein writes, “I have been studying and writing about publicly financed stadiums for more than 10 years and cannot name a single stadium project that has delivered on its original grandiose economic promises...”
Next, Sen. Reid said:
Nevada can no longer afford to put off investments in our children. If we ever hope to compete with students from Tucson or Burbank — never mind students from Tokyo or Berlin — we must adequately fund education today.
I’m no longer surprised when politicians like Harry Reid ignore the fact that Nevada has nearly tripled inflation-adjusted, per-pupil education spending in the last 50 years. But that doesn’t mean our kids aren’t still harmed when politicians try, once again, to “fix” education by dumping more money into a broken system.
Even research from Nevada’s Legislative Counsel Bureau has confirmed that as spending increased during the 2000s, Nevada’s graduation rate plummeted.
We know what works: school choice. School choice raises test scores, increases graduation rates and saves money. No wonder politicians in the pockets of teacher unions oppose school choice so strongly.
Sen. Reid saved one of his biggest whoppers for last, though:
The renewable-energy industry has been a bright spot during dark economic times, helping our state attract new businesses and create thousands of jobs that can never be outsourced.
NPRI’s Nevada Journal has shown that $1.3 billion in government handouts to renewable-energy companies since 2009 has produced only 288 permanent, full-time jobs. Sen. Reid is right that there are “thousands” of jobs that can no longer be outsourced. That’s because those temporary construction jobs no longer exist.
Do you ever listen to a politician like Harry Reid talk, and get the feeling that almost everything he’s saying is twisted or inaccurate?
That feeling doesn’t mean you’re wrong. It means you’re paying attention.
Take care,
Andy Matthews
NPRI President
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NPRI testimony on how Obamacare will increase ER visits
Yesterday, before the Joint Finance Committees, Geoffrey Lawrence, NPRI's deputy policy director, delivered the following testimony on the negative impacts of Obamacare.
Madame Chair and members of the committee, thank you for allowing me to participate today.
I’d like to briefly address an element of the managed care idea for Medicaid. Although NPRI ideally prefers Medicaid benefits to be structured around a consumer-driven health plan such as a Health Opportunity Account, many states have demonstrated a measurable cost savings by structuring those benefits around a managed care program.
However, under the ACA, I don’t believe we can hope that a managed care program will be able to reduce the state’s expenditures on emergent care. Let me provide a cautionary tale from Massachusetts.
According to statistics released by the Massachusetts Division of Health Care Financing and Policy, emergency department visits actually increased by 9 percent in the four years after universal health care was enacted in that state. By all accounts, this occurred because there were not enough providers to handle the additional demand created by thousands of new patients receiving health insurance. Even though these individuals nominally gained insurance, they were not able to obtain access to care, because of the shortage in supply. This led to increased non-price rationing and, as a result, more visits to emergency departments.
This cautionary tale is particularly relevant for Nevada because the rate of physicians per 100,000 in population is significantly lower here than in Massachusetts. According to the latest data from the U.S. Census Bureau, Nevada has 188 physicians per 100,000 in population, whereas Massachusetts has 469 physicians per 100,000 in population — about 2.5 times as many as Nevada.
Thus, we should expect to see the problem of non-price rationing for a limited supply of available health care to be much more pronounced here than was the case in Massachusetts — meaning our emergency rooms could soon become overwhelmed with additional demand. If this comes true, it could be a costly prospect for Nevada.
Time to acknowledge that Nevada's 'clean energy' emperor isn't wearing any clothes
Tonight, Senate Majority Leader Harry Reid will address the Nevada Legislature. Earlier this week, he tweeted that one of the things he'll be talking about is Nevada's "clean energy potential."
What a joke.
If this was 2009, we could debate about the "potential" of subsidizing so-called "clean energy" projects, like solar, wind and geothermal. We could debate about if "renewable energy" mandates are the key to diversifying Nevada's economy.
But it's not 2009. It's 2013, and four years later, we know that over $1.3 billion in government handouts to "clean energy" companies has resulted in just 288 permanent jobs. That's over $4.6 million a job.
But the problems with "clean energy" subsidies go beyond government picking winners and losers in the economy. Energy from these "renewable" sources is up to four times as expensive as energy from traditional sources — and solar and wind facilities require back up power for “intermittency issues.”
Reid's rhetoric can no longer distract us from the fact that we can all see that's Nevada's "clean-energy" emperor isn't wearing any clothes.
