Flores attacks Hutchison for ‘false facts’ using falsehoods

On Monday, Lt. Gov. candidate and Assemblywoman Lucy Flores put out a press release attacking Lt. Gov. candidate and Sen. Mark Hutchison. Entitled “Hutchison Campaign Running on False ‘Facts.’” The release stated:

Furthermore, claims that he [Hutchison] joined forces with Governor Sandoval to expand the education budget by $500 million are downright false. $1 billion had already been stripped from the education budget; the $500 million “added” barely covers rollup costs associated with expanding numbers of enrolled pupils. Sen. Hutchison’s position as a fighter for education is nothing but misleading. (Emphasis added.)

As I’ve shown before, even a casual look at Nevada’s education budget documents show that state education spending has increased in each of the last four years. While Flores claims $1 billion was “stripped” from the education budget, state education spending through the DSA has increased to its highest levels ever.

As I wrote yesterday,

A review of Nevada’s education budget, however, shows that Nevada’s state education spending through the Distributive School Account will increase from $5,374 per-pupil in Fiscal Year 2013 to $5,676 per-pupil in FY 2015. In addition, state spending on special education and class-size reduction will grow from $263.9 million in FY 2013 to $295 million in FY 2015.

Less than $28 million of Nevada’s increased education spending in FY 2014 and 2015 comes from projected increases in student enrollment at FY 2013 spending levels.

So where did Flores come up with this claim? I don’t know, and I wonder if her campaign does either.

I have called the Flores campaign seeking documentation of this “$1 billion” claim four times. I was even promised an email with documentation. The campaign has provided nothing. I will provide an update if documentation is ever provided.

It is impossible to overstate how important it is to get the facts right here.

Liberal’s solution to education — spending more — hasn’t worked and won’t work, but it won’t be defeated in the court of public opinion if liberals can get away with claiming that record-high spending equals a $1 billion spending cut.

 

Proposed CCSD teacher contract contains five types of pay increases

Pay increases are unrelated to performance, highlight need for collective bargaining reform

Clark County School District officials love secrecy. In the last month, they held invite-only meetings to consider teaching kindergartens about masturbation. CCSD is fighting a public-records lawsuit filed by NPRI seeking government email addresses. They also routinely provide little notice about how they plan to spend tax dollars.

That’s exactly what’s happened with the new contract between CCSD and the Clark County Education Association, which negotiates a single contract for over 18,000 teachers.

On the agenda for tomorrow’s board meeting is approving this new contract. As CCSD officials routinely complain that they don’t have enough money, even scoring a recent New York Times piece featuring administrators fretting about the growth in student population, the public might expect that this contract pinches pennies.

After all, if old facilities are really harming the learning of CCSD students, wouldn’t CCSD negotiators insist on a contract that reflects that priority?

Nope.

The proposed one-year contract for teachers contains five separate pay increases — none related to how effect a teacher is helping students learn.

These include:

  • A “step” increase for experience, including new “steps” for CCSD’s longest tenured teachers
  • A “column” increase for earning advanced degrees
  • Paying for teachers’ share of increased PERS contributions
  • A 1 percent increase to the salary table effective March 2015
  • Eliminating employer and employee contributions to the Retiree Health Plan

Teachers will also have to pay $20 a month more per employee and dependent(s) for health insurance. The District is continuing to negotiate a district-wide health plan, which the public should make sure doesn’t consist of putting all CCSD employees in union-controlled Teachers Health Trust.

In total, these raises will cost the district over $43 million. These additional expenditures will also do nothing to increase student achievement.

Contracts like this, which feature spending increases without any additional accountability, are part of the reason why Nevada’s inflation-adjusted, per-pupil spending has nearly tripled in the last 50 years, while results have declined for decades.

This kind of spending is hardly an isolated incident. Last year’s contract with teachers contained six different types of pay increases.

This contract also gives a preview of how — without substantial reforms to NRS 288 — additional education funding from the margin tax or legislative action will be wasted without increasing achievement.

Fortunately there are dozens of ways to increase student achievement without spending more.

Victor Joecks is executive vice president of the Nevada Policy Research Institute, a non-partisan, free-market think tank. For more visit http://npri.org.

 

NPRI responds to Vice President’s call in Vegas for a higher minimum wage

In response to Vice President Joe Biden’s visit to Las Vegas where he argued on behalf of raising the minimum wage, NPRI released the following statement from its Director of Research and Legislative Affairs Geoffrey Lawrence.

The minimum wage is an illusion by which we are led to believe that a government price control on labor will lead to prosperity. In reality, markets have never reacted favorably to any form of price control.

Price controls, such as the minimum wage, that make low-skilled or entry-level labor more expensive, lead to fewer jobs. Instead, business owners tend to find ways to mechanize these jobs rather than paying wages they cannot afford. This is why the Congressional Budget Office has estimated that raising the minimum wage to $10.10 an hour would cost 500,000 jobs.

Of course, few business owners want to lay off existing employees and so the full effects of minimum wage laws aren’t always immediately visible.Frequently, business owners will allow entry-level jobs to disappear through attrition, and so there are clear winners and losers from a minimum wage hike: Current employees who remain in their jobs might experience slightly higher wages in the short-term, but future job seekers will find it even harder to do so as entry-level opportunities dry up. When workers cannot secure entry-level employment, their entire career progression may be thwarted because they cannot get their foot in the door.

Statistically speaking, minimum wage laws are also associated with high unemployment rates among particular demographic groups consisting primarily of women, teens and minorities.

Most observers have now forgotten that the idea for a minimum wage law was originally developed by the early Progressives in the late 19th Century as a massive social engineering project designed to price minorities out of the labor force.  At the time, proponents believed that a minimum wage law would prevent minorities from being able to sustain their families and, thus, result in a racially whiter population.  While that is no longer the explicit goal, the historical legacy of minimum wage laws is still evident in its demographic effects.  That’s why Nobel Laureate Milton Friedman called the federal minimum wage law “one of the most, if not the most, anti-black laws on the statute books."

 

Week in Review: Communication

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.


Communication

Some of you may remember that I started here at NPRI as the Institute’s communications director, and so from the beginning I’ve always had a deep appreciation for the importance of communicating our ideas in a clear, powerful and effective way.

Through the years, our communications operation has grown tremendously, and we’re blessed today to have that operation in the very capable hands of Chantal Lovell. Chantal is hard-working, intelligent and, most important, an outstanding communicator. But you don’t have to take my word for it.

I mentioned last week that I was in Denver for the annual meeting of the State Policy Network, and SPN’s program included the final rounds of the first-ever Great Communicators Tournament. Think Freely Media, the tournament’s sponsor, kicked off the tournament weeks earlier by inviting participants to submit a short video making a moral argument for a free-market policy position.

About 150 people entered, 60 of whom were selected to have their videos posted online to be voted on. Of those 60, the top two vote-getters, plus 10 chosen by judges, advanced to compete in Denver. And those remaining 12 competed over multiple days, making arguments on issues ranging from Medicaid expansion to right-to-work laws to pension reform. Finally, on the penultimate day of the conference, the top three contestants competed live in front of about 900 people.

And when it was all over, our own Chantal Lovell was the last one standing.

I know I speak for everyone here at NPRI when I say that I’m incredibly proud of Chantal for her achievement. But I’m not the least bit surprised. As brilliant as she was on stage, she’s just as superb working day-to-day in the trenches, getting our message out.

What makes her so good is that she understands something very important — that to win the policy arguments, it’s not enough just to have the facts on your side. Statistics, data, econometric analyses — these things are necessary. But when it comes to convincing voters of the merits of our ideas, nothing beats having the right story.

This past summer, we published a policy study finding that approximately 3,610 Nevada jobs would be destroyed if voters pass the margin tax, which will appear as Question 3 on this November’s ballot (if you’re not already up to speed on this issue, see here).

Naturally, we’ll continue to promote the findings of that study over the next few weeks. But at the same time, we’ll be sharing the stories of the individuals behind the numbers.

We’ve already highlighted a few, including:

  • Randy and Kathalynn Thwing, owners of New Standard Manufacturing, which for more than 25 years has been building and selling padlocks here in the Silver State. They say they might have to pick up and leave Nevada if the margin tax takes effect, essentially being forced out of the place they’ve called home since the 1980s.
     
  • Frank and Lelia Friedlander, who own Las Vegas Window Tinting. They estimate that the margin tax would result in an additional $24,000 on their tax bill. Rather than lay off workers or cut wages, they plan to try to absorb the new cost themselves — which means the tax will hit their family directly.
     
  • Renee Newman, who runs a construction company along with her husband. Renee says that if Question 3 passes, the company could be forced to close altogether — leaving their 70 current employees jobless.
     

We hear all the time that the margin tax — revenues from which ostensibly will go toward education — is needed because of what it will do for “the children.” But what about the children of those 70 individuals who work for Renee Newman? Will they really be better off if their parents lose their paychecks?

Public policy doesn’t exist in a vacuum. It has a real-world effect on real people. And in the case of the margin tax, that effect would, in far too many cases, be disastrous. It’s important that we spend the next few weeks making sure our fellow Nevadans understand that.

We need to keep sharing the story of Randy and Kathalynn, and of Frank and Lelia. And others, too. You may have a story of your own, or know someone else who does. If you do, I hope you’ll let us know. Those stories need to be heard.
Thanks for reading — and be sure to drop a congratulatory note to Chantal at cl@npri.org!

Until next time,

Andy Matthews
NPRI President


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Week in Review: Our cause

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.


Our cause

I want to begin this week by thanking all of you who joined us Tuesday night at the Venetian for NPRI’s 23rd Anniversary Celebration. It was great to once again see so many long-time friends and supporters of the Institute, and to see plenty of new faces as well, as we celebrated 23 years of fighting for free-market principles here in the Silver State.

I’ve received an abundance of positive feedback from many who attended, and a lot of praise particularly for our keynote speaker, Judge Andrew Napolitano, who gave an impassioned speech about the importance of restoring and defending constitutional principles and the rule of law.

Again, my sincerest thanks to those of you who attended.

The only downside to the evening was the 4 a.m. wake time that awaited me the next day. On Wednesday morning, I boarded a plane for Denver, location of the 22nd Annual Meeting of the State Policy Network, where I’ve been for the past few days.

The annual SPN meeting always serves as a wonderful reminder that in this great cause of ours, we’re not alone. All across the country, state-based think tanks are working just as hard to advance sound policy ideas as we are in Nevada.

I’ve had a chance to talk with some of my fellow think-tank leaders, and it’s inspiring to hear what they’re up to. Whether they’re working to advance school choice, make government more transparent or implement tax and budget reform, they all share a commitment to the same underlying principles that you and I hold dear. And they’ve put in an enormous amount of time and effort fighting for those principles.

In my remarks at Tuesday night’s dinner, I noted that it’s often tempting to look at all the challenges facing us today, and to wonder whether we really have the opportunity to turn things around. And I added that when I looked across that room of supporters, and saw in their faces the passion for what we’re doing, the clear answer to me was: Yes.

And spending the past few days in Denver has reinforced that view. All across our country, dedicated, freedom-loving citizens are committing themselves to creating a nation filled with prosperity, opportunity and hope.

Our cause faces many challenges today. But make no mistake: Our cause is strong.

Have a great weekend,

Andy Matthews
NPRI President


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Week in Review: Madison and Henderson

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.


Madison and Henderson

“If men were angels,” wrote James Madison in Federalist No. 51, “no government would be necessary.”

He continued:

If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government; but experience has taught mankind the necessity of auxiliary precautions.

One such precaution, of course, is our system of checks and balances — the separation of various governmental powers within government itself. Unfortunately, that framework has begun to break down in recent times — nationally and certainly here in Nevada as well.  

The people remain the ultimate check on government — or, as Madison put it, “the primary control on the government.” And if our elected representatives fail to govern responsibly, we the people have the ability to vote them out of office. Increasingly, however, it has become crucial for citizens to check government with more frequency than every two, four or six years.

NPRI has been proud to be at the forefront of many efforts to check government, and our TransparentNevada website, which contains government employee salaries and other public information, is a very helpful tool in many of those efforts.

This includes a victory for taxpayers that NPRI won recently in Henderson.

Over one year ago, city officials in Henderson began to lay the groundwork for proposing a property tax increase. They convened a special budget committee to make recommendations but instructed committee members not to look at employee compensation, which is 80 percent of the city’s budget. Unsurprisingly, the budget committee then recommended a significant property tax increase to fill a supposed $17 million annual shortfall.

In April 2014, city officials announced a series of community meetings to discuss the findings and gauge the public’s reaction to their property tax increase trial balloon.

Led by NPRI’s Victor Joecks, our team used TransparentNevada information to raise numerous questions about what Henderson officials were telling the public. Through public testimony, media interviews and handing out fliers at community meetings, we showed that Henderson’s officials are some of the highest paid in the Vegas Valley. We also showed that Henderson’s budget “cuts” were really just reductions in desired expenditures.

Henderson residents were furious to learn that the reason city officials wanted to increase their taxes was that NRS 288 had forced them to give raises to city employees making over $200,000 a year in total compensation, while the median household income in Henderson had fallen more than 9 percent in five years.

And the raises continued. Over the summer and fall, Henderson announced it was giving raises and bonuses to its various employee groups.

Rather than risk political suicide at the polls next year, earlier this month the city council unanimously voted to table talk of a tax increase until at least 2016.

No, men aren’t angels, and that certainly includes those in the Henderson city government. But when we as citizens take seriously our duty to serve as that ultimate check on governmental power, we accomplish a lot in ensuring that those who are elected to govern, govern responsibly.

And don’t worry, Henderson residents. NPRI will be there in 2016, too.

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

Andy Matthews
NPRI President


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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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