Week in Review: A lesson from Tesla

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.


A lesson from Tesla

About 34 hours after the 28th Special Session of the Nevada Legislature began, Gov. Brian Sandoval last night signed legislation, passed unanimously by lawmakers, granting Tesla roughly $1.3 billion in tax abatements and renewable tax credits to build a battery factory in Storey County.

My NPRI colleagues and I have already spilled a good deal of ink weighing in on this story over the past week. In doing so, we’ve stressed a few points consistently: that the idea of Tesla coming to Nevada was cause for excitement; that the opacity and haste that have characterized the deal raised serious concerns; that lawmakers shouldn’t allow the euphoria of the moment to blind them to their responsibilities to make sure they were truly acting in the state’s long-term economic interests and examining risk as well as reward; and that crafting public policy to give special treatment to one company raised important questions of both constitutionality and justice. 

The deal having now become official, it may be tempting to assume that all the relevant questions have been answered. On the contrary: Many questions remain, and they can and will be answered only by the combination of careful future analysis and the continued unfolding of events.

So while the dust settles, at least for now, I thought I’d take this opportunity to highlight a facet of the Tesla saga that’s been getting far too little attention. There’s an important and fundamental lesson to be learned here, and it shouldn’t get lost amid the hype over this one particular deal.

Let’s start with a basic question: Why did Tesla decide to come to Nevada?

Surely, all businesses take many factors into consideration when deciding where to operate. But at least part of the answer to that question was provided by Steve Hill, the governor’s economic-development chief, who told the Reno Gazette-Journal that, “Without the sales tax abatement, we would've been immediately out of the conversation.”

Whatever you think of the merits of the Tesla deal itself, there is an inescapable lesson here: Favorable tax climates attract businesses. Tesla chose Nevada because of the opportunity to pay nothing to little in taxes, and because of the obvious benefits to the company that will result from that nonexistent to low tax burden. The less money Tesla is paying into government coffers, the more it has to grow, create jobs and increase wages. This benefits Tesla’s ownership, its employees and others in the economy as well.

So here’s another question: If it’s good for Tesla, then why not for everyone? If we acknowledge the power a low tax burden has to attract one business and to create jobs — and 60 lawmakers, plus the governor, just did exactly that — doesn’t it follow that extending such opportunities to other businesses all throughout the economy would lead to broader benefits as well?

The answer, of course, is yes. And since that’s the case, then the converse must also be true. Business owners will respond to higher taxes by shrinking their business, eliminating jobs or even moving away from those high-tax locations (or by not setting up shop there to begin with). And when that happens, the ill-effects are felt throughout the economy.

Still, we’re constantly being told, by advocates of higher taxes, that we can increase the tax burden on businesses without bearing those negative consequences. These folks constantly downplay or even deny the connection between the tax burden a business must pay in a particular location and its likeliness to choose to operate there. Well, the Tesla deal is a big, fat, $1.3 billion argument to the contrary.

It’s important to note that the benefits or negative effects of lowering or raising taxes are felt most acutely by small businesses, which are the primary driver of job growth in Nevada and across the country.

I had a chance to bring this up just yesterday, when I was a guest on Las Vegas Channel 3’s “What’s Your Point?” with Amy Tarkanian and Rory Reid. Rory is a big proponent of the margin tax, which will go before Nevada voters on this November’s ballot and would, if passed, result in a new, 2 percent tax levied against the gross revenues of businesses — even those that aren’t profitable.

Rory expressed his skepticism that implementing the margin tax would actually drive any businesses away, but the irony is that he did this immediately after applauding the decision to lure Tesla to Nevada with a massive tax-break package. Again, if the size of the tax bill was a major factor in Tesla’s decision on whether to do business in Nevada, then surely it would factor into the calculations of other businesses as well.

There’s a fundamental disagreement, even among free-market adherents, regarding the propriety of targeted tax breaks. Some favor them, arguing that it’s always good to let people keep more of their own money, and that we should strive to create as many loopholes as possible until everyone’s tax burden is decreased. Others argue that a true, competition-based market system requires a level playing field, with everyone operating under a uniform set of rules. And I’ve enjoyed hearing from lots of people in both camps over the past several days.

But wherever you fall on that divide, let’s make sure we appreciate the area where we can agree. Taxes do matter, and we should all work to advance public policies that keep taxes low here in the Silver State. With or without Tesla, that’s the path to a bright and prosperous future.

Take care, and have a great weekend.

Andy Matthews
NPRI President


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Week in Review: Tesla

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.


Tesla

When I wrote to you last week about the perils that come when government subsidizes private businesses, I didn’t think I’d have the opportunity to broach the subject again so soon.

As you’ve probably heard, Gov. Sandoval announced yesterday that he is calling a special session next week to propose giving Tesla up to $1.3 billion in tax abatements and transferable tax credits in exchange for Tesla building a new battery factory in Northern Nevada. If passed, this would mean that Tesla would pay no sales tax for 20 years and no real or personal property tax or modified business taxes for 10 years and would receive $195 million in transferable tax credits.

Before the announcement I had sent a letter to the Governor and members of the Legislature urging them not to offer Tesla direct subsidies that are prohibited by Article 8, Section 9 of Nevada’s Constitution.

It is good to see that the package the Governor described didn’t include any direct subsidies. I believe that the lack of direct subsidies stemmed directly from NPRI’s lawsuit, filed earlier this year, against the state’s unconstitutional Catalyst Fund. Gov. Sandoval and his team knew that if direct subsidies had been or are proposed, NPRI’s litigation center is always prepared to act to defend Nevada’s Constitution. So the lack of direct subsidies is a victory for all Nevadans, and I believe that you and I helped make this victory possible.

Before digging into the tax package, you and I first need to think about how this is happening. In our system of government, it’s not enough to do the right thing; you must do the right thing in the right way.

Negotiating a $1.3 billion tax giveaway in secret and then expecting legislators to pass legislation approving the deal within one week is simply not the right way to create laws.

Who will be the first lawmaker to quip that we have to pass the Tesla bills to find out what’s in them?

Calling a special legislative session on a few days’ notice for the benefit of one company also fosters a system where the politically powerful are even more advantaged over everyone else.

But what about the staggering $1.3 billion tax package? Is it constitutional, and is it a good deal for Nevadans?

Again, an important caveat: As I’m writing this, our team here has not seen any legislative language, so we’re forced to analyze only summaries of the deal as prepared by the Governor’s staff.

It’s impossible to make a final judgment on this package without seeing the legislative language. Certainly, substantially reducing Nevada’s wasteful transferable film tax credit would be a positive.

There is a legitimate disagreement even among free-market adherents over targeted tax breaks. While all agree that taxes should be low and that government shouldn’t pick the winners and losers, there is some disagreement on whether in the process of lowering taxes, all tax rates must be uniformly lowered or whether on the way to lower taxes it is appropriate to expand tax loopholes incrementally so that at least some folks escape taxation until everyone has a loophole and everyone pays fewer taxes.

Regardless of where you fall on that divide, this Tesla deal will lead to the need for government to either reduce wasteful spending or raise taxes on other businesses or individuals.

I believe taxes should be low — even lower than they are now — but we do need taxes to fund essential government services. Whether a company is planning on hiring 6,500 new employees or 65, companies creating jobs brings more people to Nevada. As Nevada’s population grows, government expenditures also increase. This is why NPRI always references per-pupil or per-capita spending when we compare government spending over time. We expect the amount government spends to increase as the population grows or to decrease if the population shrinks.

So if Tesla hires 6,500 new employees, as it says it will, government expenditures will naturally increase. But if Tesla pays no taxes for 10 years and no sales tax for 20 years, some of the normally available tax revenue won’t be increasing. This means that government will either need to reduce its per-capita spending or look to raise taxes on other businesses and families.

Now, NPRI has done plenty of work on how to reduce government spending while achieving the same or greater results, so that first option is certainly possible and definitely preferable. But if per-capita spending isn’t reduced, higher taxes are the only alternative.

While 6,500 jobs are a lot, it’s important to remember that that would represent just 0.5 percent of the 1.26 million jobs currently in Nevada’s economy. If you’re one the business owners employing some of the other 99.5 percent of Nevadans, how do these tax breaks make you feel?

I hope Tesla succeeds, but I also hope other, less politically connected Nevadans and business owners aren’t left subsidizing Tesla’s success or failure at the expense of their own employees and businesses.

Until next time,

 

Andy Matthews
NPRI President


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Week in Review: Stadia mania

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.


Stadia mania

I was talking the other day with Chantal Lovell, NPRI’s deputy communications director, and as we were chatting Chantal mentioned that she “hates” sports.

Her remark came as we were discussing a story published Tuesday by the Las Vegas Review-Journal, which reports that the City of Las Vegas is considering bearing more than 75 percent of the costs for a $200 million soccer stadium in Symphony Park. Chantal found this news quite unsettling.

Unlike Chantal, I love sports. I was a multi-sport athlete in high school, began my professional career as a sportswriter and even had an opportunity, back in 2001, to try out for my beloved Boston Red Sox and publish an article about the experience. (I didn’t make the team, and yet, somehow, they’ve managed to win three World Series since then without me. I know — I’m as puzzled as you are.)

But despite our difference of opinion on sports (I’m right, by the way), Chantal and I had the same reaction to that R-J story. That’s because we agree on something far more important: the proper role of government.

As much as I’d love to see a new sports stadium in the Las Vegas Valley, I also recognize that other people should not be forced to subsidize my hobbies and interests. Yet if the city goes ahead with this plan — which it will consider at a city council meeting on Sept. 3 — that’s exactly what would happen. Taxpayers — even those who have no interest in sports whatsoever — would be forced to pay for the new stadium, and to do so to the tune of more than $150 million.

The overarching principle here is that government shouldn’t pick the winners and losers in an economy. There are countless ideas out there that may have some degree of merit, but a fundamental injustice is done when the government starts deciding which deserve funding and which do not. If building a new stadium is such a good idea, then let the private sector do it, with private dollars. That way, the project’s chances to move forward will depend on its ability to attract genuine support in the marketplace, rather than its ability to curry favor with politicians.

But what about the supposed economic benefits a new stadium would bring? Wouldn’t a new stadium generate all kinds of new economic activity, making it an investment that will pay off for all of us — sports fans and non-sports fans alike? Proponents of such plans constantly tell us the answer to those questions is yes.

The record, however, says otherwise.

As Chantal noted in a commentary earlier this year, “Communities that venture into the stadium-subsidizing business have a history of coming out on the losing end. Time and time again, government officials and bureaucrats invest the taxpayer’s money into a sports venture, only to have the grandiose promises of neighborhood revitalization and economic stimulation fall flat.”

And because it’s taxpayers who foot the bill for these schemes, they’re the ones left to suffer the consequences when things don’t work out as planned. Let someone put up his own money for a stadium — as we’ve actually seen the MGM do already — and the risks are borne, properly, by someone who has willingly chosen to assume them.

I’d be thrilled to see a new stadium in Las Vegas. But if it’s going to happen, it should happen the right way — through the free market, and not by the hand of government.

Until next time,

 

Andy Matthews
NPRI President


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Week in Review: The merits

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.


The merits

One of the most common observations NPRI’s supporters share with me goes something like this:

“You know, Andy, I hear a lot of people on the left criticize you guys when you come out with some new study or analysis. But I never hear any of them actually prove you wrong — or even bother to try.”

I must say, I’ve observed the same thing — and in a way, I get a kick out of it. Those who oppose our ideas always greet our work with accusations of bias or sinister motives, or with demands that we reveal who’s funding us. But they never seem interested in refuting the merits of what we’re saying. I’ll let you draw your own conclusions as to why that may be.

So why am I bringing this up? There’s a new study out this week touting the many supposed benefits if Nevada voters were to pass the margin tax, which will appear as Question 3 on this November’s ballot. The study’s most significant conclusions are that passing the measure would 1) improve the quality of our education system, and 2) strengthen the state economy through increased job creation.

The study was conducted by UNLV’s Center for Business & Economic Research and paid for by The Education Initiative. In case you’re wondering: Yes, the latter is the same group that is leading the charge to pass the new tax. So here we have the folks who are funding a ballot measure releasing a study finding that said ballot measure is a terrific idea. I’ll give you a moment to recover from your shock.

Now, it’s tempting to simply scoff at all this, and to dismiss it as both absurdly predictable and predictably absurd. But to reject a study’s conclusions based on the identity of its authors or funders would be exactly what I just got through scolding our critics for, wouldn’t it? More times than I can count, I’ve reacted to criticism of NPRI’s work by thinking: Either prove us wrong, or zip it. And so we need to hold ourselves to the same standard.

That’s why, in our press release on Wednesday reacting to the study, we made only brief mention of who wrote and paid for it, and then shifted to an analysis of the study’s substance. And indeed, there were many serious flaws for us to point out.

For example, the study’s authors appear to arrive at their job-growth numbers based heavily on the redirecting of corporate funds from capital investment toward labor-intensive government-spending programs. This line of thinking, however, runs counter to a very basic and widely recognized economic principle: that capital investment is the chief driver of both labor productivity and wages, and serves as the foundation of our economy. Nevada’s long-term economic health depends on the sustainment and growth of the state’s supply of capital. 

The study also, in championing the margin tax’s supposed benefits in the education realm, claims to rely upon a body of research finding a correlation between education spending and student achievement. As NPRI’s Geoff Lawrence noted, “The studies they cite, however, don’t actually make this comparison at all. They instead relate class size to achievement levels in the early grades — a body of research that is not in dispute.”

Last month, we at NPRI released our own analysis of the margin tax proposal, and you probably recall that our conclusions differed greatly from those in The Education Initiative’s study. That’s because our study was based on sound economic theory and a proper understanding of the effects of taxation on private enterprise — as well as an honest assessment of the relationship between education spending and results.

The same cannot be said of The Education Initiative’s analysis. Nevertheless, we welcome this new addition to the debate over the margin tax. It has given us a chance to once again discuss the proposal on the merits — something we at NPRI are never afraid to do.

•••

A few of you asked me about my recent trip to Minnesota, which I referenced in last week’s column. I actually did quite a bit of traveling last week, visiting not only Minnesota but also North and South Dakota before spending a few days on the Oregon coast. I had originally planned to go to Oregon back in March, and solicited some of your recommendations on particular places to go, but I ended up having to cancel that trip. However, I was able to put a lot of your suggestions to good use when I finally made it there last week. So thanks again!

Anyway, after this recent jaunt, I’ve now been to 49 states — and next summer’s trip to No. 50, Alaska, is already planned. I’d be curious to hear from any one of who have managed to check all 50 off your list. Which state is your favorite? (Excluding Nevada, of course!)

As always, thanks for reading, and I’ll see you next time.

Andy Matthews
NPRI President


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Week in Review: Free at last

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.


Free at last

Imagine if along with the deductions for taxes, social security and unemployment on your paycheck was a deduction to support a set of political and social causes you vehemently oppose.

Worse yet, imagine that the group taking money from your paycheck was telling people far and wide that you support the very causes you know cause harm to yourself, other taxpayers and the economy.

For workers like Rebecca Friedrichs, who works in a state without right-to-work protections, this isn’t some imaginary scenario. It’s life.

On Tuesday, as part of National Employee Freedom Week, Rebecca told her story while sitting alongside NPRI’s Executive Vice President, Victor Joecks. They participated in a panel discussion on employee freedom hosted in Washington, D.C., by the Heritage Foundation, with C-SPAN covering the event.

Rebecca described how it felt when some of the money she earned as a California teacher was put toward causes and political candidates she opposes. And she talked about the bullying and intimidation that employees experience when they dare challenge the status quo.

“We literally felt like little children being bullied on a playground,” Rebecca said of the treatment she and others received after questioning the union’s use of members’ dues for political causes.

Unfortunately, Rebecca’s story is far from unique — versions of it play out in every state. Earlier this year, Nevada Journal reported on threats and intimidation by the Culinary Union, and a new poll released by NEFW finds that over 28 percent of union members said they would leave their union if they could do so without penalty.

That’s why National Employee Freedom Week, when groups across the country highlight employees’ ability to opt-out of union membership, is so important. This week, NPRI led the way in shining light on the stories of people like Rebecca, who’s receiving an agency-fee rebate for her union’s political spending. We let union members know they have options when it comes to union membership, even in non-right-to-work states like California, Illinois and New Jersey.

Earlier this week, I told you about the growth of NEFW, which NPRI started last year in conjunction with the Association of American Educators. Since I last wrote to you, the campaign has generated even more coverage across the nation and from major media outlets.

In addition to the Wall Street Journal and Politico articles I mentioned Monday, National Employee Freedom Week was featured by The Washington Examiner, The Washington Times, The Daily Caller, Townhall, Bloomberg Businessweek, The Orange County Register, The Ben Shapiro Show and numerous other major outlets in various states.

Thanks to this media attention, countless union members now know they have the right to break free from unions that build themselves up by tearing dissenting members down.

Do you know what else is encouraging? Earlier this week, we shared with you the results of a poll that found 82.8 percent of Nevadans support allowing union members, without force or penalty, to leave their union if they want to.

But that’s not only true in Nevada. Across the country, 82.9 percent of Americans expressed support for this principle, usually called right-to-work.

And even in non-right-to-work Minnesota (where I was vacationing this week, by the way), 83.44 percent of those polled expressed their support for this principle.

All across the country, we have union members wanting to leave their unions; widespread public support for their ability to do so; and, now, National Employee Freedom Week — which is dedicated to empowering those workers to do exactly that.

Thanks for reading, and have a great weekend.

Andy Matthews
NPRI President


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Week in Review: Answering the Bell

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.


Answering the Bell

I’ll confess to having never heard of Kristen Bell before this video of her surfaced recently (such is my familiarity with modern-day pop culture). Apparently she’s an actress and a singer — and also, if that video is any indication, an aspiring economist.

The video is entertaining, if for no other reason than it calls to mind the common joke at the expense of those who sing poorly, in which they are advised against quitting their day job. This time, of course, the scenario is reversed. Singing is her day job, and she does it quite well. So well, in fact, that I’m going to go ahead and suggest she stick to it.

Watch the video for yourself (be advised that there’s a bit of bad language at the end), but here’s the gist of it: Ms. Bell, dressed as Mary Poppins, performs a little number to the tune of “A Spoonful of Sugar.” Except the lyrics are changed so that she’s calling for “just a three-dollar increase” in the federal minimum wage. The current floor of $7.25 an hour simply isn’t enough to live on, she melodiously explains, but one stroke of the government pen can make everybody’s financial worries melt away.

For a retort to all this, I couldn’t possibly do better than this video from our clever friends at Reason, who trot out Bert the chimney sweep to suggest that “just three pages of econ” might help Ms. Bell see the flaws in her reasoning.

I did, however, visit this topic in the not-too-distant past, in a column I wrote in response to cries, both nationally and here in Nevada, for a minimum-wage hike. As I wrote then:

Minimum-wage laws kill jobs. And increasing the minimum wage would kill even more of them. This is true for a very simple reason: If you increase the cost of something to an employer, he will be able to afford less of it. This means that entry-level jobs will disappear or, as we’re seeing already, human workers will be replaced by machines. In other words, minimum-wage laws hurt the very people they’re intended to help by pricing those people out of the labor market.           

Ms. Bell would have us believe that providing current low-wage employees a life of abundance is as simple as legislating more money into their pockets. But as I noted in that excerpt (and as the Reason video points out as well), her policy prescription would actually do serious harm to many of those same employees — by turning them into former employees.

But the most obnoxious line from Ms. Bell’s ditty refers to “the CEOs in fancy suits each giving their own trumpet toots” who “forget how hard it is to work a shift.” And she’s just getting warmed up. “They don’t like to break a sweat,” she informs us. “They prefer to just collect.”

Now, I find this maddening — and not just because I’m a CEO who wears fancy suits (they’re not actually all that fancy).

Only someone completely detached from the real world (as Hollywood types can often be) could fail to appreciate how much “sweat” goes into building and growing a business. Ms. Bell’s casual and ignorant dismissal of the tireless effort entrepreneurs put forth in order to earn their success would be insulting — if the source weren’t far too comical to take seriously.

No fair-minded person would deny that some people in this country are worse off than others, especially during these tough times. But the way to create economic opportunity for all is to remove governmental barriers to business development and job growth, not erect new ones.

Raising the minimum wage would only make things more difficult for those who are now struggling — and no amount of lyrical wit or musical talent can alter that reality.

•••

Speaking of musical talent (see what I did there?), last week I offered to buy a cup of coffee for the first person who wrote in and accurately identified the first song I learned to play on guitar, and I noted that I’d referenced some of the song’s lyrics somewhere in that column.

Some of our staff warned me that the hint wasn’t obvious enough, and it seems they were right, because nobody came up with the correct answer. However, there were lots of great guesses, my favorites including Bachman-Turner Overdrive’s “Takin’ Care of Business” and Van Halen’s “Hot for Teacher” (I have to admit, that last one gave me a chuckle). Anyway, I’m going to give you all another shot at it, but this time I’ll help you out a bit more. The artist is Pink Floyd, and the relevant line from last week’s column referred to teachers trading the “hot air” of union rhetoric for the “cool breeze” of reason and logic.

No winner this time, and I’m drinking all the coffee myself.

Have a great weekend!

 

Andy Matthews
NPRI President


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Week in Review: For my next number ...

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.


For my next number...

Seriously, I love you guys, but you’re killing me here.

Last week I wrote what I thought was one of the more important Week in Review columns of the year. I discussed NPRI’s brand-new study on the dangers of the margin tax, and shared with you some of the extensive media coverage of our domino-toppling spectacle, which we used to illustrate the 3,610 jobs the study found would be wiped out if the tax were to go into effect. Lots of useful, substantive stuff in there.

So which line from that 700-word column triggered the most email responses? A reference I made in passing — parenthetically, no less — to my acoustic guitar. It’s really encouraging to see you all have your priorities in order.

All right, all right. I’m just giving you a hard time. Actually, I get it. Sometimes our minds need a break from the worrisome world of public policy. So let’s do this: I’ll reserve some space at the end of this week’s column to answer some of your questions on my burgeoning career as a rock star. Sound good?

For now, though, let’s get down to business.

***

Pop quiz: What’s better than quitting an organization you don’t wish to belong to? Answer: Never joining in the first place.

Those of you who follow NPRI’s work know that for three straight years now, we’ve been informing teachers throughout Nevada of their right to leave their union if they want to. The unions try to keep that right a secret, of course, but thanks in part to our efforts, more than 1,400 teachers across the state opted to leave their union between 2012 and 2013. This year’s opt-out window just closed, and we should know in a couple months how many teachers followed suit in 2014.

Teachers who have left their union cite all kinds of reasons for doing so. But the fact is that many of them only joined the union to begin with because they thought they didn’t have a choice. In actuality, they do. And for new Clark County teachers, the coming weeks will provide an opportunity to make the choice that’s right for them.

On August 13 and 14, representatives from the Clark County Education Association will be at the school district’s new-teacher orientation, in an effort to get those new teachers to sign up. From what we’ve been told by some teachers, these union reps can make it seem as though joining the union is a requirement. Teachers should know, however, that joining the union (and paying the $780-plus a year union membership will cost) is entirely optional.

And here are a couple other things the union doesn’t want new (or any) teachers to know: In Nevada, non-union members and union members enjoy the same compensation, and for teachers concerned about liability insurance, there are alternatives to the union — such as the Association of American Educators — that offer better coverage for a fraction of the cost.

There are plenty of other reasons why belonging to the union might not be the best option for some teachers. But the bottom line is that each individual teacher should be trusted to make an individual decision regarding union membership. It’s been humorous these past few years to see union leaders accuse NPRI of being “anti-teacher” simply for informing teachers of their rights. Increasingly, however, teachers aren’t buying it. They’re showing an eagerness to trade the hot air of union rhetoric for the cool breeze of reason and logic, and are recognizing that whether to belong to the union is a decision they can and should make for themselves.

So if you’re a new teacher, remember: Union membership is a choice, not a requirement. We won’t tell you what to do, and neither should a union official. Keep that in mind at your orientation.                                      

***

OK, so … I bought my guitar (a steel-string acoustic, for those of you who asked) a few years ago, after a conversation with our own Joe Becker, actually. We were at a conference together, and Joe had his guitar with him. He’d been playing for about 15 years at that point, and as we got talking, it brought back fond memories of a Fisher-Price four-string I had as a kid, and I thought it might be a nice thing to take up. So I bought my guitar, and then — life being full of so much other stuff — I stuck it in a closet and pretty much forgot I even had it for a while.

But over the past few months, I’ve been playing pretty often, and it really is a lot of fun. I’m still getting the hang of it — I’m not sure what the technical names for the various skill levels are, but I’d guess I fall somewhere between “terrible” and “I think maybe you’re holding it upside down.” But I’m one of those artists who’ve never cared much for what the critics think.

In all seriousness, I do appreciate those of you who wrote in on that subject. A bunch of you asked what kind of stuff I like to play, so let’s have some fun here. I’ll buy a cup of coffee for the first person who can write in and accurately guess the first song I learned. (Hint: There’s a reference to some of the song’s lyrics somewhere in this column.) Good luck to you all!

Take care, and I’ll see you next time…

 

Andy Matthews
NPRI President


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Week in Review: Dominoes

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.


Dominoes

We all know the saying, “A picture is worth a thousand words.”

But this week, at NPRI’s Las Vegas office, we created a picture worth a whole lot more than that.

You’ve probably seen some of the widespread coverage of this already, but on Tuesday, we released a new study on the impact the proposed margin tax would have on Nevada’s economy. To illustrate that impact, we set up, and then toppled, 3,610 dominoes — one for each job the study finds will be destroyed if voters pass the margin tax this November.

Problems with this tax proposal run deep, but even a cursory review reveals why it would be so devastating. If it passes (it’s Question 3 on the ballot), it would result in a new, 2 percent tax levied on the revenue of Nevada businesses that gross more than $1 million a year. A million bucks may sound like a lot, but that breaks down to just $2,739.73 a day in sales, which means it would encompass most mom-and-pop restaurants, grocery stores, gas stations, etc. And because it’s a tax on revenue, and not on profit, struggling businesses — and even those already losing money — would be forced to pay it.

That’s not all. The study also finds that the margin tax would decrease Nevadans’ real disposable income by $240 million in its first year (and by more in future years), while investment would drop by more than $7 million annually.

These numbers are important. But what matters far more is what they stand for. Each of those 3,610 dominoes we knocked down this week represents the job of a member of our community that will be wiped out if the margin tax goes into effect. That number could include your job, or that of someone you know. Just think about the stress and hardship you’d endure if, just like that, your job were to suddenly vanish.

And for what? To throw more money at a public education system that is failing not because of insufficient funding, but because of systemic problems that can only be solved through structural reform? A job-killing tax that would do nothing to accomplish its purported goal? Talk about a lose-lose.

You and I know all this, of course. Our challenge is to get that message out, and to help citizens all across our state understand the real-life effects the margin tax would have on themselves, and on their neighbors, friends and family. The release of our new study is a crucial part of that effort, but we also knew that creating a powerful visual would generate attention and interest on a much grander scale.

And so it did. Our domino spectacle earned an abundance of media coverage, not just from almost all of the Las Vegas media, but also from multiple TV stations in Reno. Take a look over at the right column of this bulletin for a more comprehensive overview, but I thought this story from Las Vegas’ Channel 8 and this one from the Las Vegas Review-Journal (which also ran the story as the lead in Wednesday’s hard-copy Nevada section) captured the events particularly well.

It’s great to see our work being disseminated so broadly. (I have to admit, Tuesday evening brought me a good deal of satisfaction, as I sat out on my back patio, enjoying a cigar and a scotch while playing my acoustic guitar and checking out all the coverage online.) It’s invigorating to know that in the past few days, hundreds of thousands of voters have been exposed to the crucial findings of our study, many of them no doubt learning of the dangers of the margin tax for the very first time.

But what happened this week marks the beginning of our task, not the end.

Between now and November, our job — yours and mine — is to continue to reach as many Nevadans as possible with the truth about what the margin tax would mean for our state.

I know you’re up to it. And I look forward to fighting alongside you in the weeks and months ahead.

Thanks for reading, and I hope to see you at one of next week’s Friedman Legacy Day luncheons.

Andy Matthews
NPRI President


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The emerging school choice consensus

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.


The emerging school choice consensus

Last week I used this space to talk about a report NPRI had just released, which focused on the many ways Nevada policymakers could improve the state’s failing education system without spending more money. The report offers an abundance of policy recommendations — 33 of them, in fact — and each is highly meritorious.  

But of all the policy options available, there’s one that stands out above all others in its potential to help the state realize profound gains in student achievement. What Nevada needs, ultimately, is school choice.

As Geoff Lawrence, the report’s author, writes:

The evidence that school choice is among the most cost-effective strategies for elevating student outcomes … grows by the day. In particular, school choice tends to benefit minority students and students from low-income households. No serious academic study has ever found that school choice harms any group of students.

The evidence to which Geoff refers, of course, simply confirms what ought to be obvious. Allowing parents to choose which schools their children attend would force schools to compete for enrollees and tuition dollars, and would therefore give them a powerful incentive to provide a high-quality education. It’s a concept that we apply, without even thinking about it, to nearly every other facet of our lives. Just consider how absurd it would be if the government began dictating, based on your zip code, which restaurants, shopping malls or movie theaters you could go to. Do you think your local Applebee’s would work as hard to satisfy you if management knew you had no choice but to eat there?

Fortunately, the arguments for school choice — advanced most articulately and passionately by the late Dr. Milton Friedman and echoed today by devotees of the movement he inspired — are resonating. And not just among those identified with the political Right, the constituency one might expect to most naturally gravitate toward policies rooted in market-based principles.

Earlier this year, we at NPRI hosted a screening of a film called “The Ticket,” which documented a number of successful school-choice programs around the country that have drawn backing from Republicans and Democrats alike. These stories indeed reflect a trend that has seen the fight for school choice garner support from across partisan lines.

Among the latest to join the chorus is a group of high-profile figures from the sports and entertainment industries. While we’re used to celebrities unabashedly speaking their minds on political issues, typically the views expressed come from the Left (a source of constant irritation for many of us). However, the American Federation for Children has released a series of videos featuring the likes of sports stars Jalen Rose, Lisa Leslie and Deion Sanders, TV host/entertainer Kathie Lee Gifford and actress/producer Vivica A. Fox, among others, expressing their support for giving parents more choice in how and where their kids are educated.

Promoting education reform generally, and school choice specifically, has been at the heart of NPRI’s mission since our founding nearly 23 years ago, and it’s heartwarming to see this effort attract such widespread support. There’s a lot of momentum on our side — and we need to keep pressing onward.

You’ve probably seen some of our emails on this already, but I want to take a moment to remind you again that in a couple of weeks, we will be holding a couple of policy luncheons — one in Las Vegas (July 30) and one in Reno (Aug. 1) — that will focus on the power of school choice to transform lives and provide hope to those children most in need.

The speaker at each event will be Virginia Walden-Ford, a long-time school-choice advocate who has seen first-hand the ability of educational freedom to create opportunities for our nation’s youth, and particularly the most underserved members of the population. Her story is truly inspiring, and I hope you’ll read this profile of her that Townhall published a few years back. It’s the kind of courage and determination she has displayed that will ultimately ensure that we win on this critical issue.

And of course, I hope you’ll take the time to attend one of our luncheons and hear her story in person. I assure you, you won’t be disappointed. You can register for either event here.

It’s said often, but it’s worth repeating. School choice isn’t about Republicans or Democrats, or even conservatives or liberals. It’s about our children and their hopes for the future. We’ve made great progress on this issue, and I hope you’ll join us in a couple of weeks to help us keep it going.

Thanks for reading, and I’ll see you soon.

Andy Matthews
NPRI President


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Week in Review: This will make you laugh

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.


This will make you laugh

I received an email the other day from a friend and long-time NPRI supporter. Attached to the email was this image:

Come on, admit it — that one made you laugh. But it’s true, isn’t it? You can have an endless supply of something, but it won’t do you much good if you’re utterly clueless as to how to use it.

The world of public policy is certainly full of examples. And my friend was apparently reminded of one when he looked at that image. With his email, he included a simple sentence: “The only thing missing is the CCSD logo.”

He seems to have noticed the pattern.

For years, Nevada’s education establishment and its defenders have been clamoring for increased funding. The margin tax initiative, brought to you by the teacher unions and set to go before voters this November, is but the latest attempt to get their hands on the one thing they always want: more money. But what these folks don’t want is accountability for how they’re using the money they already receive. And their ongoing success in avoiding such accountability is a large and growing problem for Nevada’s taxpayers and students.

It needs to stop.

This week, we at NPRI released a new report that gets at the heart of the Silver State’s education challenges. Authored by Geoff Lawrence, the report documents how decades of shoveling more money into our public education system has failed to deliver the promised gains in student achievement. The problem, Geoff explains, isn’t a lack of resources. It’s the inability of our school systems to use current resources properly.

To address that problem, the report explores a number of policy reforms — 33, in fact — that have a proven track record of success in other states, and can be implemented here in Nevada without any increase in spending. These reforms would improve educational achievement not by blindly adding to the pile of resources, but by ensuring that existing resources are utilized more efficiently — something that, sadly, we rarely see in the public-education realm.

The report is a great read and a welcome addition to the education-policy debate. I strongly urge you to check it out (you can do so here). There’s a lot of material in there, but I hope the main thing you take away from it is this: We can throw all the money in the world at our education problems, but we’re not going to get anywhere until we start demanding that the recipients of that money use it wisely.

***

Speaking of accountability, we’re still within the window when dissatisfied teacher-union members can hold union bosses accountable for their performance. Teachers who want to leave their union can do so, but they must act by July 15. If that’s you — or if it’s someone you know — the place to get more information is www.nevadateacherfreedom.com.

In the past two years, more than 1,400 teachers statewide have decided to opt out of union membership, and for a variety of reasons. Many cite poor customer service. Others like the idea of saving hundreds of dollars a year in union dues, believing they can spend that money better than union officials can. And some don’t like the idea of belonging to an organization that uses their money to push job-killing proposals like the margin tax.

Whatever the reason, we at NPRI believe that teachers who want to leave the union should be able to. Unfortunately, the union makes it difficult to do so (witness the narrow, two-week opt-out window), but we’ll be working hard over the next few days to reach as many teachers as possible with this important information.

Thanks for reading, and I’ll see you next time.

Andy Matthews
NPRI President


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