Week in review: A letter to lawmakers

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.

Dear Assemblymen Nelson, O’Neill, Trowbridge, Edwards and Silberkraus:

Sometime in the next few days, you will make your most important decision of the 2015 Nevada Legislative Session. Given that you are all up for reelection next year, and are not guaranteed to be back for future sessions, it may well be the most important decision of each of your legislative careers.

That decision will be whether to support the largest tax hike in the history of the State of Nevada.

As my colleague Victor Joecks noted earlier this week, you five represent the crucial votes that will determine the outcome of the most important policy battle of the year. Gov. Brian Sandoval and his top legislative ally, Sen. Michael Roberson, are leading the charge to saddle hard-working Nevadans with $1.5 billion in new taxes. If they succeed, they will have truly made history — by using historic levels of Republican power in Carson City to implement the largest tax increase our state has ever seen.

I’m asking you to make sure they don’t succeed.

The pressure you’re under to support the tax hike is significant. Don’t think I don’t recognize and appreciate that. Both Gov. Sandoval and Sen. Roberson are Republicans who ran for reelection in 2014 on promises to keep taxes low and promote fiscal discipline. Both have broken their promises and, even as I write this, they are no doubt pressuring all of you to go back on the pledges you’ve made to your own constituents. The spotlight is on the five of you, and you’re no doubt feeling a lot of heat.

The reason I understand what it is you’re going through today is that we’ve been here before. Back in 2003, another Republican governor was pushing a massive tax-hike proposal. As is the case today, the final battlefield was the state Assembly, and the question then, as now, was whether 15 Assembly members — the number needed under the Nevada Constitution to prevent any tax increase — would stand strong against the governor’s efforts. 

As you consider the choice before you, I want each of you to ask yourself a question: If this is indeed the decision that will define your political legacy, what do you want that legacy to be? How do you want to be remembered?

I want you to think back to the point when you first decided to pursue a political career, and when you decided to do so as a member of the major party that, historically at least, has stood for limited, responsible government. Why did you make the decisions you did? What was it that motivated you to enter public service?

What were the principles and ideals that inspired you, and what was it that you wanted to accomplish during your time in office?

If someone — perhaps a constituent of yours — were to have told you back then that the fate of the largest tax increase in state history would soon be in your hands, what would you have told that person you would do? What would you have told yourself?

The intellectual case against this tax hike has been made clearly and consistently by a number of people, including many of your legislative colleagues and, yes, those of us at the Nevada Policy Research Institute. I won’t rehash those arguments here, because I know you’ve heard them enough times already.

All that’s left for you to do now is choose.

Twelve years ago, 15 courageous Assembly members did indeed stand strong against the governor’s tax push. They earned the nickname “The Fearless Fifteen,” and today they are remembered as taxpayer heroes for sticking to their principles in the face of enormous pressure — pressure that was every bit as strong as what you face today.

And now, it’s your turn. You have the opportunity to decide how it is that you’ll be remembered.

I don’t have to tell you that if you choose to give in to the pressure and support this tax increase, you’ll invite a good deal of criticism from me and my NPRI colleagues.  You’ll be panned on talk radio, you’ll get ripped by conservative grassroots leaders, and you’ll get a lot of angry calls and emails from voters in your districts. Call it a hunch, but I have a feeling that a Mr. Chuck Muth might have a few words to say about your decision as well.

But don’t oppose this tax hike to appease any of us. Do it because you want to stand for something you know is important. Do it because you know that the principles that led you to seek public office in the first place are as true today as they were back then. Do it because you know that Nevadans deserve better than the same policies that have failed us for decades.

Do it because you know in your heart that it’s the right thing to do for our great state and its great people.

Thank you.


Andy Matthews
NPRI President

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What's in Sandoval's new tax package

Late last night, Gov. Brian Sandoval’s team released the legislative language for his new tax package. The tax package is being proposed as an amendment on AB464.

Less than 24 hours later, at 3 p.m. today, there will be a joint meeting of the Assembly Ways and Means and Senate Finance Committees to discuss the amendment.

With only broad details being known beforehand, this will be a running blog of what’s in the bill.

Commerce tax

Sandoval is continuing his push for some form of a gross receipts tax and has changed the name of his gross receipts business license tax to a gross receipts “commerce” tax. Both versions of the tax are based on the same principle of taxation that voters rejected 4 to 1 in November.

In Sandoval’s gross receipts BLT proposal, there were over two dozen industry specific rates. In his new proposal, Sections 24 to 49, similar rates are maintained, although they will be assessed as rates, instead of being based on the tables from SB252.

The proposed rates are:

  1. Agriculture, forestry, fishing and hunting: .063 percent
  2. Mining: .051 percent
  3. Utilities and telecommunications: .136 percent
  4. Construction: .083 percent
  5. Manufacturing: .091 percent
  6. Wholesale trade: .101 percent
  7. Retail trade: .111 percent
  8. Air transportation: .058 percent
  9. Truck transportation: .202 percent
  10. Rail transportation: .331 percent
  11. Other transportation: .129 percent
  12. Warehousing and storage: .128 percent
  13. Publishing, software and data processing: .253 percent
  14. Finance and insurance: .111 percent
  15. Real estate and rental and leasing: .25 percent
  16. Professional, scientific and technical services: .181 percent
  17. Management of companies and enterprises: .137 percent
  18. Administrative and support services: .154 percent
  19. Waste management and remediation services: .261 percent
  20. Educational services: .281 percent
  21. Health care and social assistance: .190 percent
  22. Arts, entertainment and recreation: .24 percent
  23. Accommodation: .2 percent
  24. Food services and drinking places: .194 percent
  25. Other services: .142 percent
  26. Unclassified business category: .128 percent

Week in review: Whose side are they on?

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.

Anyone who has paid even minimal attention to lawmaking has likely asked themselves at one point or another: “Whose side are they on?”

“They,” of course, being lawmakers, and the “sides” being either government’s or the people’s.

I had to ask myself that question this week after reading through Victor Joecks’ commentary on which Nevada Assembly members may vote for the largest tax hike in Nevada history. It seems some lawmakers, despite having been elected by voters who were strongly opposed to tax hikes, are considering switching from the People’s team to the Government’s team.

Lawmakers were sent to Carson City to play on behalf of the people, to fight against tax hikes; voters couldn’t have been clearer in their rejection of tax increases in November. But alas, some lawmakers, though hired to play on the People’s team, are being recruited by the Government’s team.

And the man leading the effort to raise taxes? Governor Sandoval.

Though he too was elected on promises not to raise taxes, Gov. Sandoval started playing for the Government’s team nearly as soon as the election was over. And now he’s trying to take some of those on the People’s team, especially legislative rookies, with him.

As Victor explained in his commentary, Assemblyman Pat Hickey offers some insight into the tax-hike negotiations in two recent posts to his blog, Soup to Nuts. Assemblyman Hickey offers his analysis on which Republicans he thinks are definitely supporting tax hikes, likely to support tax hikes, or currently unsupportive of tax hikes.

Assuming all 17 Assembly Democrats vote for a tax hike — which isn’t guaranteed — Gov. Sandoval needs at least 11 Republicans to switch from the People’s team to the Government’s team. By Hickey’s analysis (not NPRI’s analysis or any lawmaker’s public position), Assembly members Paul Anderson, Melissa Woodbury and Lynn Stewart have already abandoned the People’s team, while Hickey thinks Assembly members Derek Armstrong, Randy Kirner, Stephen Silberkraus, and Hickey himself are likely to raise taxes.

The good news is that even Hickey, presumed to be close to Sandoval, doesn’t think Sandoval has the votes for even his new “hybrid” plan that combines the problems with all the proposed tax increases.

For the remaining members, Hickey reports that Gov. Sandoval and his Government team are dangling the proverbial signing bonus: play for the Government’s team during session and get supported by the Government’s team come next election.

And, unfortunately, Sandoval has sent no public signals that he’s willing to negotiate for less than a massive expansion of government. Which means that any Special Session would be the result of Sandoval’s refusal to compromise.

What’s worse than the governor switching teams is that the tax hikes for which he’s advocating aren’t necessary. In April, NPRI released its Freedom Budget, a plan that would adequately fund government without raising taxes. Yesterday, a second budget proposal was presented to the Assembly Committee on Taxation and, like our plan, also finds no need to raise taxes.

This latest no-tax-hike plan was created by Controller Ron Knecht, Assemblyman Jim Wheeler and Assistant Controller Geoffrey Lawrence, whom many of you probably remember as NPRI’s former director of research. The Balanced Plan for Growth, as they call it, is a line-by-line alternative budget that not only doesn’t raise taxes, but allows those “sunset” taxes to finally sunset.

With November’s “Red Wave” and the 4-to1 rejection of the proposed margin tax, voters couldn’t have been clearer on the rules of the game: They don’t want more tax hikes.

Taxpayers need to continue to encourage lawmakers to remain on the People’s team.

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

Andy Matthews
NPRI President

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Week in review: Meet Yuri Maltsev

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.

When you’re the president of a free-market think tank, trying to defend the principles of limited government and individual liberty in the face of a historical tide that seems always to be going against you, it’s easy to feel like you’ve taken on a heavy lift.

You might even permit yourself an occasional feeling of self-satisfaction over your willingness to embrace such a great challenge, and to devote your time and energy to so noble a cause. This is tough work, you might think to yourself. But it’s important work, and by God, somebody’s got to do it. And I guess it’s up to people like me to answer that call.

And then you learn about someone like Yuri Maltsev.

Who is Yuri Maltsev? Well, Dr. Maltsev is a lot of things, including a college professor of economics, an author of five books and countless articles, and a frequent commentator on some of the nation’s leading television news stations.

He was also a member of a senior economics team that worked for Mikhail Gorbachev in the Soviet Union, putting together Gorbachev’s package of political and economic reforms known as perestroika

That term — perestroika — is a Russian word that literally means “restructuring” or “reconstructing,” and it reflects the magnitude of the shift that was occurring in the Soviet Union in the late 1980s and early 1990s. Unlike today’s American people, who, despite our country’s mounting problems, still stand on a centuries-old tradition of classical liberalism and democratic ideals, Russians of that era were trying to adopt a system that was entirely foreign to so many of them.

So yeah, maybe those of us in America’s free-market movement don’t have it quite so rough. We’re trying to preserve a way of life. Dr. Maltsev and his team were trying to create a completely new one.

I could tell you a lot more about Yuri Maltsev and his story, but I’ve got a much better idea — I’m going to let him tell you himself.

On June 17, Dr. Maltsev will be the keynote speaker at NPRI’s annual Spring Celebration, which will once again be held at the Eldorado Hotel & Casino in Reno. Tickets and tables for the event are now on sale, and you can reserve your spot by clicking here.

A number of individuals affiliated with NPRI have already seen Dr. Maltsev speak in person, and those who join us on June 17 are in for a real treat. His presentation is sure to feature a wonderful blend of insight, analysis and humor. And it will come from a truly unique perspective.

Dr. Maltsev defected to the United States in 1989 and, having lived under communist rule, he brought with him a profound understanding of the way intrusive government stifles economic growth and innovation. (There’s something else he brought with him — something quite hilarious, actually — but for that anecdote you’ll have to come to our dinner.)

Having continued his work in the economic realm here in the U.S., he has developed an even deeper appreciation for the role that free markets and open government (glasnost, to again use the Russian term) play in creating and sustaining a just and prosperous society.

His keenest observation during his time in the U.S. will serve as the central theme of his speech at NPRI’s dinner. That observation is the extent to which Americans, especially in recent years, have allowed our nation’s freedom-based foundation to erode, and permitted a more statist, collectivist system to develop in its place.

So dire has the situation become, in Dr. Maltsev’s view, that he believes it may well be time for a perestroika of our own here in the United States. And on June 17, he will not only discuss why he believes that to be the case, but he’ll also talk about how those of us who cherish liberty can become even stronger champions for the principles that have long served as the backbone of America’s greatness.

The challenges we face today may not be quite as steep as what Yuri Maltsev and his colleagues undertook in the Soviet Union more than two decades ago. But let’s not understate it, either — we certainly have our work cut out for us, and reclaiming America’s proud heritage of freedom is going to take all the effort we can muster.

I hope you’ll join us on June 17 as we recommit ourselves to that effort, and take in some words of wisdom to help us along the way.

Thanks for reading, and take good care.

Andy Matthews
NPRI President

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Week in review: tunnel

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.

 “Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnel.” — John Quinton

This past November, as I’m sure was the case with many of you, I was filled with more hope than I’ve had in a while. Not only did voters across the country support small-government, freedom-loving candidates, but here in Nevada, voters — by a 4-to-1 margin — said no to raising taxes.

It seemed like people were finally waking up — as if there were a light at the end of the tunnel.

And in Nevada, where Republicans took control of the legislative and executive branches of state government for the first time in 85 years, I really thought we’d see some changes.

So NPRI published a series of articles outlining “How Republicans can succeed where Democrats have failed.” We identified education, collective bargaining and public pension reforms as the areas that presented the greatest opportunities for positive change. Many lawmakers took the suggestions offered in these articles — and in our Solutions 2015 policy guide — and drafted bills to turn our ideas into reality.

One such idea that already has become reality is a tuition tax credit scholarship program. Last week, Gov. Brian Sandoval signed into law an Opportunity Scholarship program that allows businesses to make tax-deductible donations to a scholarship fund, which parents may tap into to offset or cover the cost of private education. There are also a number of bills moving through the Legislature to make needed changes to collective bargaining and the Nevada Public Employees’ Retirement System.

Unfortunately, we’re also seeing some proposals that are at odds with what voters likely expected from politicians who promised to “keep taxes low.”

Despite having campaigned against the margin tax, Gov. Sandoval is now urging legislators to support the largest tax increase in Nevada history, in the form of a gross-receipts tax similar to the margin tax voters so soundly rejected just months ago. And on Tuesday, 17 Nevada senators voted to support that tax; only four stood up and echoed the will of voters by saying “no.”

Going against the clearly expressed will of the people is bad enough, but Gov. Sandoval’s tax plan — which would levy a new tax on businesses regardless of their profitability — won’t even improve education as he’s claimed.

We at NPRI think Nevada taxpayers deserve to know what’s happening in Carson City as they’re busy working to pay for government’s excesses. So on Wednesday, we released a new video highlighting Gov. Sandoval’s flip-flop on taxes.

The 48-second clip features the governor telling voters, in his own words, that taxes aren’t the solution to Nevada’s problems — and then going on to discuss his history-making tax plan.

We also created a page on our website that lists Gov. Sandoval’s contact information, as well as the email addresses and phone numbers of every Assembly member and senator in Nevada, so that citizens can make their position on debilitating taxes known (again).

Since the video was posted on YouTube on Wednesday morning, it has been viewed more than 23,000 times. Considering that, before we released this video, 90 percent of Nevadans didn’t know Gov. Sandoval supports the largest tax hike in state history, that’s an incredible number of people who now have a better idea of what their governor, once an adamant tax-hike opponent, is now doing.

Numerous people have contacted NPRI to ask what they can do about their flip-flopping policymakers and this proposed tax. Fortunately, it’s not too late to contact your Assembly members, who have yet to vote on the tax plan, SB252.

And of course, if you’d like to help us spread our message to more people, you can do so by making a donation here.

As I wrote to you after the election, Nevada has a great opportunity this legislative session to reduce the size, scope and spending of government, and to increase freedom in the Silver State.

There’s a light at the end of the tunnel here in Nevada. And we can’t let the politicians go out and buy more tunnel.

Until next time,

Andy Matthews
NPRI President

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Week in review: five that survived

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.

It’s not quite Selection Sunday — that day each year when we all learn which teams have made the cut for the NCAA basketball tournament — but last Friday was nevertheless a crucial decision day at the Nevada Legislature.

Friday was the last day for bills to be voted out of committee, meaning that those that failed to get the green light from committee members by the end of last week are now relegated to the ash heap of history.

Fortunately, there were a number of really good bills that did make the cut, and will now move forward in the legislative process. Here’s a look at five bills in particular that survived decision day and deserve to become law.

Senate Bill 302. Authored by Sen. Scott Hammond, this gem of a bill would establish an Education Savings Account program, which would allow parents who opt into the program to access funds from an account designated specifically for their child, and to use those funds to choose the school or school type they feel is best tailored to their child’s needs.

I testified on SB302 before the Senate Committee on Education, and as I told the committee members, this bill would bring much needed accountability to our education system. That’s because it would empower parents to take advantage of the same competitive dynamics that make the producer-consumer relationship so mutually beneficial in a free-market system. Nevada’s education system has been underperforming for far too long, and this bill (combined with the Opportunity Scholarship bill that Gov. Brian Sandoval has already signed into law), would provide genuine reason to believe brighter days are ahead.

Assembly Bill 182. This bill would enact a number of important labor reforms that would curb the undue benefits from which public-employee unions currently profit. Specifically, it would prohibit government entities from collecting dues on behalf of union organizations; it would end the process of allowing governments to pay union employees for work they do solely for their union; it would exclude management and supervisory employees from the collective-bargaining process; and it would eliminate “evergreen” clauses and mandatory binding arbitration.

For decades, union bosses have wielded incredible and often unchecked power over the policymaking process in Nevada, and the resulting increases in the cost of government are simply unsustainable. The good news is that this legislative session has finally produced some serious efforts to get this problem under control. Speaking of which…

Assembly Bill 280. Another bill I was able to testify on, AB280 would eliminate mandatory collective bargaining for local governments, allowing local officials instead to choose whether to bargain collectively with employees through their unions. The collective-bargaining process has, probably more than anything else, been responsible for the mounting fiscal problems that have caused headaches for policymakers and have threatened citizens’ access to legitimate government services. No surprise, then, that NPRI has been highlighting the need for reform in this area for a long time.

This bill would stop short of getting rid of collective bargaining altogether, and is actually a wonderfully democratic approach to this challenge. Making collective bargaining optional would mean that voters in local communities could elect policymakers that would decide the issue the way their constituents want. If the voters are opposed to collective bargaining, they can elect officials who would do away with it. If the voters think collective bargaining is a good idea, then, well … good luck to them. But let’s at least give them a choice.

Assembly Bill 190. This one would institute a welcome reform to the Nevada Public Employees’ Retirement System, by allowing new hires to choose a 401k-style plan rather than the current one-size-fits-all, defined-benefits approach. The current system hurts government workers because it’s inflexible — and it’s hurting the rest of us through the crippling long-term liabilities it has created. To wit: PERS’ true unfunded liability, based on fair-market valuation, is around $40 billion.

As NPRI’s Victor Joecks said recently of the proposed plan: “This hybrid system is ideal for today’s younger workforce, which values flexibility in their career planning and don’t see themselves working for the same employer for 30 years. It also allows them to leave their pensions to their spouse or children.” Of Nevada’s growing, PERS-driven fiscal crisis, Victor added: “Taxpayers … can’t afford to have lawmakers ignore this problem any longer.” Assemblyman Randy Kirner, who authored this bill, certainly isn’t ignoring it. And neither should his colleagues.

Senate Bill 158. Here’s a bill that would bring some greater transparency to government here in the Silver State. The gist of this one is simple: The bill would require local governments to release any new, extended or modified collective-bargaining agreements to the public 10 days before elected officials vote on the contract.

We’re all about open government here at NPRI, and SB158 is a common-sense way to let taxpayers know more about what politicians are doing with their hard-earned money.

There are, of course, lots of other good bills that warrant a mention, but I didn’t have room to include them all in this space. So do me a favor: Shoot me an email (am@npri.org) and let me know which bill or bills you’ll be watching over the coming weeks. I’ll highlight a few of the more popular ones next week.

Thanks for reading, and have a great weekend!

Andy Matthews
NPRI President

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Week in review: giving citizens a choice

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.

Last week I shared with you the text of the testimony I gave on Senate Bill 302, which would establish Education Savings Accounts here in Nevada.

Earlier this week I was in Carson City, where I testified on Assembly Bill 280, Assemblyman Erv Nelson’s bill that would allow local governments to decide whether to bargain collectively with public employees. Under current law, collective bargaining is mandatory for local governments, and freeing up those local officials to make that call for themselves has been one of NPRI’s top legislative priorities during this year’s session.

What follows is the text of my testimony:

Mr. Chairman, Assemblymen and -women, my name is Andy Matthews, and I’m the president of the Nevada Policy Research Institute. I want to thank you for this opportunity to testify in support of Assembly Bill 280, which would eliminate mandatory collective bargaining for local government entities in Nevada.

My organization has written at length about the enormous costs to taxpayers that result from laws that force governments to bargain collectively with public employees through their unions. In Nevada, we have found that collective bargaining produces an additional cost to taxpayers in the tens of millions of dollars annually — that’s the additional cost above and beyond what government would otherwise cost without collective bargaining in place. Nationally, the combined additional yearly cost to all state and local governments is approximately $100 billion.

At a time of serious fiscal and economic challenge, nationally but especially here in our state, this arrangement is one that we simply can no longer afford. The collective-bargaining process serves as a massive burden for local government officials who are charged with managing a city’s or county’s finances in a responsible way. But the consequences are not just seen on a balance sheet. They are felt by the citizens in our communities whose access to basic and legitimate public services becomes threatened, as policymakers are forced to choose between providing these services and meeting the ever-increasing demands of the public-sector unions.

This is a system that is highly expensive, insulated from accountability, and, quite frankly, no longer sustainable.

Opponents of this bill will claim that collective-bargaining laws are essential in order to protect government employees, and that this bill represents a draconian effort to trample the rights of workers. They would argue, and indeed often do argue, that if government lacks the funds to cover the financial obligations that collective bargaining creates, then the solution is simply to take more money from the private sector by way of tax increases.

All of this, of course, is just one front in the classic conservative vs. liberal, right vs. left debate that has been waged since long before any of us were here, and will be waged long after all of us are gone. It’s no secret where I and my colleagues at the Nevada Policy Research Institute stand in that debate.

The beauty of the bill before you is that it allows that debate to take place in local communities all across our state, rather than presume that Carson City ought to settle it for everybody. This bill, as you know, would not outlaw collective bargaining; it would merely empower each local government body to choose for itself whether or not to engage in the collective-bargaining process. This is important because it would give citizens a much stronger voice in how local fiscal affairs are conducted. If the residents of Elko or Reno or Las Vegas think that their local government employees ought to be able to negotiate under collective bargaining laws, then they can vote to elect officials who will implement that policy. Residents who feel otherwise can vote for candidates who pledge to do the opposite.

Again, it is my view and that of my NPRI colleagues that the collective bargaining process does a tremendous disservice to the taxpayers who are ultimately forced to foot the bill for the resulting artificial increase in the cost of government. 

But the bottom line is that if this bill becomes law, citizens and policymakers in communities all across our state will be able to make that decision for themselves — they will finally have a choice in how to manage their fiscal affairs, and can select the approach that they believe will work best for them.

In that sense, this bill is not so much about identifying a particular solution to our mounting fiscal challenges, as it is about adhering to an important principle — giving more power to local communities and the individuals who comprise them. I want to thank Assemblyman Nelson for his bold leadership on this issue, and I hope you will all join him in supporting this bill. Thank you.

Until next time,

Andy Matthews
NPRI President

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Week in review: what I'll say today

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.

I’ve written multiple times over the past few months about Education Savings Accounts, an education-reform proposal that we’ve been promoting vigorously here at NPRI since even before the legislative session began.

At 3:30 this afternoon, Sen. Scott Hammond’s bill to establish ESAs here in Nevada will receive a hearing before the Senate Committee on Education, and I’ll be at the Grant Sawyer Building in Las Vegas offering testimony via teleconference in support of the bill. The hearing will provide a great opportunity to get NPRI’s arguments in favor of ESAs on the record, and I wanted to share with you, in advance, the text of my remarks.

Here’s what I plan to say (you can watch the hearing by clicking here):

Madam Chairwoman, Senators, my name is Andy Matthews, and I’m the president of the Nevada Policy Research Institute. I want to thank you for this opportunity to testify in support of Senate Bill 302, which would establish Education Savings Accounts in the State of Nevada.

.           The need to improve Nevada’s education system has been discussed at great length and over many years, by policymakers, pundits and ordinary citizens as well. Indeed, there is a strong bi-partisan consensus that our public education system has continued to fall short of its responsibility to ensure that every child has access to a high-quality education.

The primary reason why that conversation continues today, decades after it began, is that during all that time we have continued to take the same approach to addressing this problem. That approach has been to repeatedly increase education spending, without implementing serious, structural reforms to our system. Since 1960, Nevada has nearly tripled public education spending on a per-pupil, inflation-adjusted basis, in the hope that this increase in resources would improve student achievement. That we continue to grapple with the problem of an underperforming school system today should be all the proof we need that this approach has failed.

Nevada’s children and parents deserve better. And fortunately, Senate Bill 302 provides them genuine reason for hope, and I want to thank Senator Hammond for his leadership on this issue. Education Savings Accounts would bring much-needed accountability to our education system by empowering parents who opt into the program with the ability to choose the school or school type best suited for their individual children. This means that schools would have a powerful incentive to provide a high-quality education, because their failure to do so would lead to parents taking their tuition dollars elsewhere. Likewise, high-performing schools would see more and more students come through their doors. The school’s success would be rewarded and, in an unmistakable win-win, more students would receive the education they deserve.

This concept is one we take for granted throughout civil society. We freely choose where we shop, where we eat, where we stay when we go on vacation. We expect and receive high-quality goods and services through this process because producers know that the only way to stay in business is to satisfy their customers.

Those dynamics have been lacking in our education system, and the results have been tragic now for generations of Nevada’s youth. This bill would bring those dynamics — competition and accountability — to that system. And both the statistics on similar programs across the country, as well as common sense tell us that our students would benefit enormously.

It’s time for school choice in Nevada, and I urge you to act on this historic opportunity to make it happen. Thank you.

Until next time,

Andy Matthews
NPRI President

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Week in review: alternative

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 past January, NPRI had to get some roof repairs done on its Las Vegas office after winter rains led to several leaks, one of which was in my office.

My executive assistant, Patty Andrews, called around to several roofers to get some quotes, finally landing on one company that came out to assess the damage and offer an estimate.

In that instance, as in all the other times I’ve received an estimate for that sort of job, not once did I think to myself, “This guy doesn’t know what he’s talking about. I should offer him more than he’s asking for.” After all, the purpose of getting a quote is not just to get an idea from an expert on the cost of a job, but to enable the buyer to shop around and find the best price.

So I was particularly surprised to learn that Gov. Brian Sandoval’s budget, which calls for the largest tax hike in Nevada history, allocates more money to numerous agencies than the respective agencies had requested.

Just like with a roofer offering an estimate for a repair, agencies presumably have a better sense of how much money they need to operate than does someone not working in the department. For example, the Department of Health and Human Services and Clark County Child Welfare agency requested $91.4 million for 2016 and $95.6 million for 2017. Yet Gov. Sandoval’s budget would give them an additional $3.5 million in each year.

In total, the cost to taxpayers to give agencies the higher amounts proposed by Gov. Sandoval rather than the amounts they’ve requested is $38.4 million in general funds and $109.5 million in non-general funds over the next two years.

It’s the array of unnecessary spending increases like this that inspired NPRI to publish our own, alternative budget for Nevada, called the Freedom Budget. Unlike Gov. Sandoval’s current budget proposal, ours would not increase taxes, implement new ones or extend taxes scheduled to sunset.

NPRI’s line-by-line, department-by-department recommendations for each of Nevada’s 441 budget accounts are actually based on the Executive Budget proposed by Gov. Brian Sandoval in 2011, when he was sticking with his campaign promise not to raise taxes.

By increasing spending at a slower rate than Gov. Sandoval has proposed (and by making common-sense recommendations like funding agencies at the levels they’ve requested, not more), the Freedom Budget would save taxpayers $1.3 billion over the next two years compared to Gov. Sandoval’s budget.

The Freedom Budget is based on four principles: increase spending from Sandoval’s 2011 proposal, but at a slower rate than the governor has proposed; eliminate funding for inefficient government programs; fund agencies at the amount they’ve requested, not more; and limit government to its core, constitutional functions. And lawmakers are already showing interest in our recommendations.

Gov. Sandoval’s 2010 campaign for governor was based on his commitment that “we have to balance that budget without raising taxes.” In 2014, he was outspoken in his opposition to the margin tax, which voters overwhelmingly rejected. Now secure in office, he has proposed a budget full of spending increases as unnecessary as paying a contractor more than he’s quoted you — and full of tax hikes like those he once decried.

But as the Freedom Budget makes clear, Nevada can do better and doesn’t need to raise taxes to do so. By spending at a slower rate, eliminating ineffective and unconstitutional programs and implementing policy reforms that require government to become more efficient, we can truly build a New Nevada.

Thanks for reading, and have a great weekend!

Andy Matthews
NPRI President

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Week in review: something new

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.

I caught this news story from Channel 3 Las Vegas the other day, spotlighting Gov. Sandoval’s efforts to win legislative support for his record-breaking tax-hike plan. The centerpiece of that plan is a massive new tax on businesses, revenues from which would predominantly be funneled into Nevada’s broken K-12 education system.

Getting his plan through the Legislature will require support from members of both parties, and, with that no doubt in mind, the governor took the novel approach of inviting three of his gubernatorial predecessors — Democrats Robert Miller and Richard Bryan and Republican Robert List — to testify in support of his proposal this week. Lamenting the state’s dismal educational performance, Gov. Sandoval cast his plan as an overdue and forward-looking solution to a problem that has been allowed to persist for far too long. Thus his pitch’s pithy punctuation point: “It simply is not 1960 anymore.”

That’s true — it’s not 1960 anymore. And much indeed has changed in the past 55 years. To give just one example, Nevada’s public education system in 1960 spent $3,144 per pupil in today’s dollars. Fast forward all the way to 2011, the most recent year for which data is available, and that number had increased to $9,313. That’s quite a change indeed.

But wait a minute. Come to think of it, maybe what those numbers suggest is that, at least when it comes to addressing Nevada’s educational challenges, nothing has really changed at all. In fact, that may well be one of the few constants over the past 5½ decades. If you were to take Doc Brown’s DeLorean back to 1960, kidnap someone and bring him to the present day, he’d find much of the modern world unrecognizable. But he’d also find that when it comes to public education, we’ve been taking more or less the same approach over the past 55 years. What the dramatic increase in per-pupil spending really shows is that for all that time, education policy has been based on the premise that spending more money will yield better results.

So while Gov. Sandoval’s sales approach may well have been novel, the substance of his plan is anything but. What he’s proposing — tax hikes to pay for education spending increases — is the same idea that has been tried, unsuccessfully, since before the governor was even born. Viewed in that light, the continuity suggested by the presence of governors Miller, Bryan and List really was a nice touch.

Fortunately, there is an effort in the works that would come at our educational problems from a new perspective. Senate Bill 302, which would establish an Education Savings Account program, was introduced on Monday, and if signed into law would provide reason to genuinely believe our education system may finally be on the road to improvement.

NPRI introduced the idea of ESAs in our Solutions 2015 publication, and as we explained there:

ESAs are private accounts held by individuals from which beneficiaries can make certain approved purchases for educational reasons. These include private‐school tuition, online education, textbooks, transportation costs or private tutoring.

In other words, instead of the state just sending money to public schools, where those funds are then spent on the students who enroll there, the money would follow the students who opt into the program. Those students and their parents would then be able to use that money to shop around for the school or even school type that is the best fit for them as individuals, while students who choose to remain in the traditional public system would benefit from the academic improvements seen when schools are forced to compete.

It’s a basic fact of economics that competition breeds quality. That’s the case all throughout the private sector, and it would be the same in our education system as well. ESAs would create a true marketplace where schools would compete for students, and the way to thrive in any marketplace is to offer a product good enough for people to want to buy it. Schools would have a powerful incentive to provide high-quality education, because failing to do so would mean their students (and their tuition dollars) would head elsewhere.

Those competitive dynamics, sadly, have been lacking in Nevada’s education system, and the results have been tragic for Nevada’s children. SB302 provides the best hope our students have had in a long, long time, and Sen. Scott Hammond, the bill’s sponsor, deserves an enormous amount of credit for showing bold leadership on this issue.

To his credit, Gov. Sandoval’s education plan does include a school choice measure. Via Assembly Bill 165, the governor seeks to create a tuition tax-credit scholarship program, which is a good (albeit modest) step in the right direction. Still, the thrust of the governor’s proposal is on the tax-and-spend side of the equation, and 55 years of history make clear where that will get us.

If the governor is serious about improving Nevada’s education system, and leading us beyond our history of failure, he should make it a high priority to ensure that SB302, the Education Savings Account bill, becomes law, and that AB165 is expanded when he signs it into law.

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

Andy Matthews
NPRI President

Remember, if you'd like to receive the latest from NPRI, sign-up for our emails here.

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