NSEA spent over $644K getting signatures for margin tax
Tomorrow, the Legislature is going to hold on hearing on Initiative Petition 1, aka the margin tax. What you won't be told is that NSEA spent over $644,000 to gather signatures for its initiative.
That's a good factoid to remember the next time a union bosses tries to brag about having "over 150,000 folks" sign the petition. Those signatures cost over $4 a pop. This chart is on page 12.
NSEA has over $1 million left to try and convince the public that raising taxes on businesses that are losing money is a great idea, but my favorite fact comes at the bottom under the heading "legislature." Here's what NSEA writes:
The goal was to protect members' jobs, salaries, and benefits and to engage the Legislature with an aggressive pro-education platform.
For NSEA it's not about the children, it's about paying the adults more for things unrelated to student achievement.
Read moreSequester jesters
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them.
Sequester jesters
I know what you’re thinking.
All the doomsday talk coming out of Washington, the promises about the dire consequences of sequestration, the warnings that life as we know it will end if the federal government doesn’t strike a deal to prevent the looming spending cuts … why, you can almost hear Bill Murray yelling in the halls of the Capitol: dogs and cats, living together — mass hysteria!
And the most terrifying thought of all: Could this really be the last Week in Review you’ll ever read?!
Well, I don’t want to come off as callous or dismissive of these doomsayers, but let’s just say I’m bullish on the sun rising on Saturday morning.
The context for all the fretting is this: Without action by our national leaders before the end of the day today, a series of cuts in federal spending will automatically kick in. Describing the impact of those cuts, President Obama said recently, “The sequester will weaken America's economic recovery. It will weaken our military readiness. And it will weaken the basic services that the American people depend on every single day.”
Sounds terrible. But we could use a little more context.
The sequester, if it comes, will result in cuts of about $85 billion from the federal budget. That sounds like an awful lot of money — until you remember we’re talking about, you know, the federal budget, of which the cuts constitute all of 2.3 percent. And that the federal budget has grown by 40 percent since 2007.
Raise your hand if you’ve ever had to cut 2.3 percent from your own personal budget. And keep it up if it led to a complete shattering of your world. Didn’t think so.
To put the sequester in further perspective, check out this chart from Americans for Limited Government, which shows that even with the cuts, federal spending would still increase this year compared to last, and would continue to increase each year going forward:
In addition, the Reason TV's Nick Gillespie does a great job of demonstrating just how overblown is the rhetoric coming from the president. I urge you to watch the full video, but here’s a particularly revealing excerpt:
The White House’s Office of Management and Budget says the sequester will cut a whopping $2 million from the $20 million budget for the National Drug Intelligence Center. That sounds pretty bad — until you realize the Drug Intelligence Center closed its door in June 2012.
In other words, we’re all supposed to be terrified about the supposed impact of cuts to a program that doesn’t even exist.
There are two particular facets of this whole debate that really underscore the main problems with government today. First, if the 2.3 percent cut really would gut essential services, then here’s my question: Why in the world have our politicians designed the system in such a way that the most important spending priorities are the first to go on the chopping block? If you had to cut your personal budget, you’d probably reduce spending on entertainment before food, no? Can’t government do something similar?
But second and more important is this: The federal government, even if the sequester were to take effect, still spends way, way too much money. If we can’t trim 2.3 percent of the budget without encountering howls of protest, how are we ever going to do the really heavy lifting — like reforming our entitlement programs?
I’d be curious to get your take on all this. Do you agree with me? Or are you fearful that the sequester will indeed have a negative impact on your life? Send me your thoughts at am@npri.org.
Thanks for reading, and I’ll see you next time … maybe.
Take care,
Andy Matthews
NPRI President
Remember, if you'd like to receive the latest from NPRI, sign-up for our emails here.
Reid it and weep
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them.
Reid it and weep
Earlier this week, U.S. Senate Majority Leader Harry Reid delivered an address before the Nevada Legislature. As I was reading through the transcript — it’s better for my blood pressure to read than to watch — I was struck by how much of what Sen. Reid said was either a distortion, based in ignorance or simply not true.
While it’s impossible to address all of the deceptive parts of Sen. Reid’s speech, here are the parts that really stood out to me.
In 2004 the residents of Clark County decided they needed more police officers on the streets and voted for a small sales tax increase to pay for them. This legislature provided half the increase in 2005, but told law enforcement to return to ask for the other half.
Clark County law enforcement officials have waited seven years to put more cops on their beats, and the people they protect can wait no longer. Putting more police on the streets is vital to ensuring our neighborhoods are safe.
It sounds nice, but Las Vegas Metro doesn’t want to increase taxes on Clark County residents to hire new cops. Metro wants “flexibility” in how it can use that money. And since Nevada’s collective-bargaining laws give enormous power to labor unions, “flexibility” will mean a fat pay raise for the 1,998 Metro employees who took home more than $125,000 in pay and benefits in 2011 and the 852 employees whose compensation topped $150,000.
Sen. Reid continued:
But despite a decade of rumors and several concrete proposals, Las Vegas still doesn't have a major, multi-use arena — the kind of stadium that could host anything from a concert to a major sporting event. ...
But it's time we united around this idea to move Southern Nevada's economy forward.
Now, it would be great if a private company wanted to fund a stadium or dome, but scores of economists have shown that publicly funded stadium projects don’t move economies forward — they actually reduce inflation-adjusted, per-person income. Villanova University professor Rick Eckstein writes, “I have been studying and writing about publicly financed stadiums for more than 10 years and cannot name a single stadium project that has delivered on its original grandiose economic promises...”
Next, Sen. Reid said:
Nevada can no longer afford to put off investments in our children. If we ever hope to compete with students from Tucson or Burbank — never mind students from Tokyo or Berlin — we must adequately fund education today.
I’m no longer surprised when politicians like Harry Reid ignore the fact that Nevada has nearly tripled inflation-adjusted, per-pupil education spending in the last 50 years. But that doesn’t mean our kids aren’t still harmed when politicians try, once again, to “fix” education by dumping more money into a broken system.
Even research from Nevada’s Legislative Counsel Bureau has confirmed that as spending increased during the 2000s, Nevada’s graduation rate plummeted.
We know what works: school choice. School choice raises test scores, increases graduation rates and saves money. No wonder politicians in the pockets of teacher unions oppose school choice so strongly.
Sen. Reid saved one of his biggest whoppers for last, though:
The renewable-energy industry has been a bright spot during dark economic times, helping our state attract new businesses and create thousands of jobs that can never be outsourced.
NPRI’s Nevada Journal has shown that $1.3 billion in government handouts to renewable-energy companies since 2009 has produced only 288 permanent, full-time jobs. Sen. Reid is right that there are “thousands” of jobs that can no longer be outsourced. That’s because those temporary construction jobs no longer exist.
Do you ever listen to a politician like Harry Reid talk, and get the feeling that almost everything he’s saying is twisted or inaccurate?
That feeling doesn’t mean you’re wrong. It means you’re paying attention.
Take care,
Andy Matthews
NPRI President
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NPRI testimony on how Obamacare will increase ER visits
Yesterday, before the Joint Finance Committees, Geoffrey Lawrence, NPRI's deputy policy director, delivered the following testimony on the negative impacts of Obamacare.
Madame Chair and members of the committee, thank you for allowing me to participate today.
I’d like to briefly address an element of the managed care idea for Medicaid. Although NPRI ideally prefers Medicaid benefits to be structured around a consumer-driven health plan such as a Health Opportunity Account, many states have demonstrated a measurable cost savings by structuring those benefits around a managed care program.
However, under the ACA, I don’t believe we can hope that a managed care program will be able to reduce the state’s expenditures on emergent care. Let me provide a cautionary tale from Massachusetts.
According to statistics released by the Massachusetts Division of Health Care Financing and Policy, emergency department visits actually increased by 9 percent in the four years after universal health care was enacted in that state. By all accounts, this occurred because there were not enough providers to handle the additional demand created by thousands of new patients receiving health insurance. Even though these individuals nominally gained insurance, they were not able to obtain access to care, because of the shortage in supply. This led to increased non-price rationing and, as a result, more visits to emergency departments.
This cautionary tale is particularly relevant for Nevada because the rate of physicians per 100,000 in population is significantly lower here than in Massachusetts. According to the latest data from the U.S. Census Bureau, Nevada has 188 physicians per 100,000 in population, whereas Massachusetts has 469 physicians per 100,000 in population — about 2.5 times as many as Nevada.
Thus, we should expect to see the problem of non-price rationing for a limited supply of available health care to be much more pronounced here than was the case in Massachusetts — meaning our emergency rooms could soon become overwhelmed with additional demand. If this comes true, it could be a costly prospect for Nevada.
Time to acknowledge that Nevada's 'clean energy' emperor isn't wearing any clothes
Tonight, Senate Majority Leader Harry Reid will address the Nevada Legislature. Earlier this week, he tweeted that one of the things he'll be talking about is Nevada's "clean energy potential."
What a joke.
If this was 2009, we could debate about the "potential" of subsidizing so-called "clean energy" projects, like solar, wind and geothermal. We could debate about if "renewable energy" mandates are the key to diversifying Nevada's economy.
But it's not 2009. It's 2013, and four years later, we know that over $1.3 billion in government handouts to "clean energy" companies has resulted in just 288 permanent jobs. That's over $4.6 million a job.
But the problems with "clean energy" subsidies go beyond government picking winners and losers in the economy. Energy from these "renewable" sources is up to four times as expensive as energy from traditional sources — and solar and wind facilities require back up power for “intermittency issues.”
Reid's rhetoric can no longer distract us from the fact that we can all see that's Nevada's "clean-energy" emperor isn't wearing any clothes.
Do taxes change behavior? Ask Manny Pacquiao
Taxes are influencing where boxing star Manny Pacquiao will have his next fight, and it's bad news for Las Vegas.
Manny Pacquiao's chief adviser insisted Monday that the Filipino superstar's preference is for his next bout – a fifth fight against Juan Manuel Marquez – to take place away from Las Vegas, with the off-shore Chinese gambling resort of Macau emerging as the "favorite."
The Dec. 8 fight between Manny Pacquiao and Juan Manuel Marquez was held at the MGM Grand in Las Vegas. Michael Koncz told Yahoo! Sports that the 39.6 percent tax rate Pacquiao would face if he were to fight again in the U.S. makes a fall bout in Las Vegas "a no go." ...
"Manny can go back to Las Vegas and make $25 million, but how much of it will he end up with – $15 million?" (Promoter Bob) Arum said. "If he goes to Macau, perhaps his purse will only be $20 million, but he will get to keep it all, so he will be better off."
Even though Pacquiao would make $25 million if the fight was held in Vegas, you know who else would have benefited? Workers in hotels and restaurants who would have benefitted from the extra tourists.
This is yet another example of how punishing the "rich" hurts folks at all levels of the economy and a reminder for liberals like Steve Sebelius that higher taxes do indeed hurt businesses.
(h/t Americans for Tax Reform)
The Mob Museum, one year later
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 Mob Museum, one year later
Remember this?
That’s a link to a news video that Kyle Gillis, a reporter for NPRI’s Nevada Journal, produced one year ago today. The story covered the grand opening of the National Museum of Organized Crime and Law Enforcement, popularly known as the Mob Museum, and spotlighted criticism from NPRI and the Taxpayer Protection Alliance over the use of public funds for the project — as well as some colorful reaction from former Las Vegas mayor Oscar Goodman, the museum’s primary champion.
In the video, Goodman boldly predicts that the museum will draw 800,000 visitors in its first year of operation, while acknowledging that he’s been cautioned to put the actual number at a more realistic 400,000 or 500,000. Oh yeah, he also refers to critics of the project — which was subsidized with $42 million in taxpayer money — as “idiots,” “morons” and “monkeys.”
It was with great interest, then, that I read Kyle’s follow-up piece on the museum yesterday while eating my morning banana. One year later, the numbers are in. How many visitors did the Mob Museum attract? 800,000? 500,000? 300,000?
Try 250,000.
Hizzoner was over-confident by a mere 320 percent.
Now, I recognize that schadenfreude can be awfully off-putting, so let me be clear that my intent here is not to embarrass Oscar Goodman for being embarrassingly wrong. He’s just guilty of making the same mistake that so many of our politicians have made — albeit with an extra-heavy dose of hubris to go with it.
Rather, my point is to call attention to a lesson that our policymakers better learn, and fast: that glitz, glimmer, fanfare and all the clever marketing and media savvy in the world may be able to fool some of the media and public — but they can’t fool the laws of markets and economics.
The reason the Mob Museum’s underperformance was so easy to predict is the same reason so many other such endeavors have failed. When politicians substitute their judgment for that of consumers acting in a free market, the results are never good. As I wrote at the time of the museum’s opening:
That is exactly why it should be left to the private sector to do these things. Maybe the Mob Museum is a good idea. Maybe it's a bad idea. But such an idea should be funded by individuals willing to risk their own money — or it should not be funded at all. Allowing the free market to determine which projects move forward ensures that the decision will be based on consumer demand, not on political appeal.
That basic principle is as true today as it was one year ago, 100 years ago and 1,000 years ago. And it will be no less true 1,000 years into the future. Yet remarkably, one thing that’s every bit as consistent as that principle is the stubborn insistence from politicians that they’re capable of finding a way around this time-tested system. Which means the rest of us must be equally steady in our commitment to holding them accountable.
As Kyle’s story notes, the Mob Museum drew just enough visitors in its first year to break even financially, and only then because it doesn’t have to pay back the $42 million in subsidies. But what happens during future years, as the novelty declines and it fails to achieve even that token level of success? Just like we’ve seen with other misguided government efforts, such as the Monorail and the Springs Preserve, taxpayers will likely end up footing the bill for the museum’s operating costs.
As Taxpayer Protection Alliance President David Williams said when the museum first opened: “This really is a no-win situation for the taxpayer.”
A year later, it’s clear that taxpayers are indeed — and quite predictably — losing.
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.
Let's raise the minimum wage to $900 an hour
During his State of the Union address, President Obama called for raising the federal minimum wage to $9 an hour.
[L]et's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. We should be able to get that done.
This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. And a whole lot of folks out there would probably need less help from government.
Obama touches on the liberal argument for raising the minimum wage, but let me spell it out more directly here.
Raising the minimum wage to $9 an hour wouldn't increase unemployment, but would give poorer workers more spending money. Since poorer workers tend to spend any cash they receive immediately, this would help the economy.
If this is true, why stop at $9 an hour? If government can "raise the incomes of millions of working families" through unconstitutional mandates and not hurt those workers or the broader economy, it's time to raise the minimum wage to $900 an hour.
Who's with me?
Liberals — even the very liberals who make the above argument — don't support that plan though. I know because yesterday on KNPR's State of Nevada I asked Danny Thompson, Secretary-Treasurer of Nevada's AFL-CIO, and David Cooper from the liberal Economic Policy Institute to support that very idea. Both passed though, with Cooper acting like the idea was absurd.
And of course the idea's absurd. But it's an idea based on the very principles Cooper, Thompson and Obama espouse.
What are the true impacts of the minimum wage? A recent Las Vegas Review-Journal editorial puts it well.
Harvard University's Greg Mankiw says there is 79 percent agreement among his peers that "a minimum wage increases unemployment among young and unskilled workers" - ranking just below the fact that a "large federal budget deficit has an adverse effect on the economy," at 83 percent.
"Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to nine dollars an hour," the president said.
But economists have demonstrated that hardly anyone tries to raise a family on the minimum wage. Rather, low-income jobs provide a bottom step on the ladder for young and inexperienced workers, who quickly earn raises as they improve their usefulness to employers.
One of the terrible ironies here: The most pernicious effects of a high minimum wage — a sop to the labor unions who have long considered Mr. Obama their go-to guy - are felt among minority youth, who already struggle mightily to reach that "bottom rung."
While the overall U.S. unemployment rate stands at 8.1 percent, African-American unemployment is now at 14.1 percent, and the official unemployment rate for black youth ages 18 to 29 is 22.3 percent.
Bonus: Here's Milton Friedman detailing the destructive impacts of the minimum wage.
NPRI praises digital learning in testimony to Assembly Ed Committee
Today, Geoffrey Lawrence, NPRI’s deputy policy director, offered the following testimony to the Assembly Education Committee.
Mr. Chair and members of the committee, I thank you for the opportunity to address you today. The Nevada Policy Research Institute has always encouraged the aggressive use and expansion of digital learning.
Digital learning can provide a student-centered learning environment and deliver a customized and stimulating curriculum for the students who engage in it.
Further, digital mediums grant students access to the best teachers and expertise in the world. Particularly for students who reside in Nevada’s rural areas, who otherwise might never gain exposure to the world’s greatest teachers, digital education offers an exciting opportunity capable of preparing these students for success in a digital, 21st Century world.
At the same time, because digital mediums make innovative distance learning programs possible, they offer greater flexibility to families in which students or parents maintain unconventional schedules for work or extracurricular activities. Further, distance learning can obviate the need for the construction of additional classroom capacity in traditional schools, thereby lowering costs to taxpayers.
Of course, digital learning doesn’t solely mean distance learning and it needn’t replace classroom teachers. Instead, teachers in schools that have embraced digital learning have utilized the expertise of teachers across the world to supplement their own classroom lectures. In fact, many free resources, such as the Khan Academy and iTunes University, allow teachers to build their students’ understanding of academic concepts to an extent that was previously unthinkable.
Please allow me to provide an example:
At Clintondale High School, outside of Detroit, principal Greg Green was frustrated by the chronic failure of his students. Nearly three-fourths of his students came from low-income families and were free- or reduced-lunch eligible. So Green came up with the idea for a pilot program: He encouraged his ninth-grade teachers to “flip” their classrooms by developing their lectures on a digital platform, often incorporating resources such as Khan Academy, and assigning these lectures as homework. Then, during classroom hours, students were to work through the problems that would traditionally be assigned as homework. In the “flipped” classroom, teachers were standing ready to help students with these problems whenever they struggled.
Students enoyed watching digital presentations on their laptops, tablets or smartphones. And for those who didn’t have these resources, Green held the school’s computer lab open for longer hours.
The program was so effective that Green expanded the program school-wide for the 2011-2012 school year. The results speak for themselves. That year, the school’s failure rates in English plummeted from 52 percent to 19 percent. In math, failure rates fell from 44 percent to 13 percent. In science, 41 percent to 19 percent, and in social studies, 28 percent to 9 percent. Attendance rates also improved while disciplinary infractions declined as students began to take greater interest what they were being taught.
The “flipped” school model is one of the best demonstrations of how effective digital learning can be and offers a new model of reform for our public schools. Thank you.
Hickey: Beware unintended consequences
Policy proposals have two types of consequences: those that are seen and those that are unseen.
Policy debates often center on the "seen" consequences, even though the "unforeseen" consequences usually have a larger impact. The perfect example of this was AB 284, which virtually stopped notice of default filings, a necessary step in the foreclosure process, in October 2011 and is creating an artificial housing bubble in Nevada. At the time, legislators debated the "justice" of allowing banks to foreclose on a home where an "owner" had stopped making payments.
That's why it's refreshing to read Assembly Minority Leader Pat Hickey detail the need to be aware of unintended consequences.
In Australia in the late 1800's, a landed gentleman from England thought "the introduction of a few rabbits could do little harm, and might [even] provide, a touch of home."
The result? Rabbits being the extremely prolific creatures they are, have wreaked ecological havoc on the land of the "Down Under." Cute little Cottontails have contributed mightily to the erosion of topsoils and the destruction of native trees, throughout the Australian bush.
Such is the law at work, of unintended consequences. ...
Before deciding that any new taxes, or even a supposed "revenue neutral" new tax structure should be unleashed on the Nevada economy--lawmakers should seriously invite all affected parties to contemplate the implications of any such change: and listen to what they say. ...
Despite what may sound like doom and gloom (or cranky conservatism), this is the time to have a serious sit down about Nevada's tax structure. It should also be a time for us to be aware of what is down the rabbit hole. "Wonderlands" can result in chaos and confusion--just ask "Alice."
There's a compelling case to be made for revenue-neutral tax reform — and NPRI's made that case here — but revenue neutral must be truly revenue neutral. For instance, trading temporary taxes for permanent ones isn't revenue neutral.
Regardless of where you are on the tax debate, it's great to see one lawmaker acknowledge that ideas have consequences — and those consequences often aren't the intended ones.