Free speech under attack in Nevada

Our country has always recognized that people have an inherent right to free speech.

Hi, I’m Andy Matthews.

Even before the Constitution was adopted, founders like James Madison, Alexander Hamilton and John Jay embodied the right of Americans to speak freely and anonymously. Nearly 200 years later, the United States Supreme Court recognized that right when it protected the right of NAACP donors to remain anonymous.

In 1995, the court even upheld the ability to distribute anonymous campaign literature.

As the First Amendment makes clear, the right to free speech does not include a caveat that one must state his name before delivering his message.

Unfortunately, Secretary of State Ross Miller has worked hard to hinder the free-speech rights of Nevadans.

For years, Miller has aggressively pushed legislation limiting Americans’ free-speech rights by mandating that groups talking about politicians in a certain way disclose their funding sources. In response to ads criticizing him for accepting $60,000 in gifts from special interest groups, Miller’s supporters have filed a complaint to find out who’s paying for the ad blitz.

In today’s political climate, when individuals are vehemently and personally attacked from the Senate floor for their political positions and groups in the political minority are targeted by the IRS for investigations, it is more important than ever to protect every individual’s right to speak anonymously.

If unchecked, Miller’s efforts to erode free speech will allow the politically powerful to use the government’s power to harass, harm and intimidate minority speech, which is exactly why the First Amendment protects all speech in the first place. 

 

Three reasons most 'average' pension amounts mislead

Editor’s note: This article was originally published by Union Watch. While the focus is on California’s public pension systems, the same factors that create misleadingly low pension amounts in California may well exist in Nevada. The California experience provides a warning for those in Nevada looking to cite average pension amounts.  

Public pension systems in California, most notably CalPERS and CalSTRS, often cite their average pension payout as evidence that their pension benefits are reasonable. Also, many defenders of public pension plans attempt to use these averages to counter evidence that pension benefits have become excessive in recent years.

The following are three very important factors to consider when computing a raw average and then using this value as an indication of what public employees receive in retirement benefits. These are three reasons that “average” pension amounts are often artificially — and inaccurately — low.

Reason 1: Not adjusting for years of service

The biggest and most widely documented factor is ignoring years of service. Most analyses of average benefits include the implicit assumption that the pension benefit cited is for a full career (30 years or more) of service.

Including the pension amounts of those who have not worked a full career produces an average value that is much lower than what those who have worked a full career are receiving. Since a full-career employee is the benchmark used in measuring the equity of pension benefits, it is only appropriate to use the data that reflects that. 

Reason 2: Not accounting for beneficiaries

Many pension plans maintain their records in a way that makes the most sense for processing payments, but are incredibly misleading when used to calculate average pension amounts. The case of beneficiaries is a prime example of this. When a public employee qualifies for a pension, there are set guidelines for each plan depending on how beneficiaries are treated, but most plans default to the surviving spouse. In many cases, the retiree can designate additional beneficiaries as well.

So when calculating average pension amounts, if beneficiaries aren’t accurately identified and segregated from active service retirement amounts, the resulting average will be skewed downward. This is because any beneficiary payment will always be a portion of the full retirement amount, which will be incorrectly treated as if it were its own separate benefit amount. An example found on Transparentcalifornia.com illustrates this effect.

In the San Jose Police and Fire Pension Plan, there is no distinction between beneficiary and active service retirees. Consider, however, the following case of multiple beneficiaries. An individual with a retirement year of 2007 and years of service value of 25.02 received a $76,120.10 pension amount in 2013. Two more entries share the last name of this individual, as well as identical years of service and year of retirement but both only received $7,100.32 in 2012. As it is inconceivable that a San Jose police or fire retiree could retire with 25 years of service and receive an annual pension of just $7,100, these three separate entries – $76,120, $7,100, and $7,100 – are all components of one pension. So in this case, a $90,320 pension would be treated as roughly equivalent to three pensions of $30,107, a reduction of nearly two-thirds of the true pension amount that is given three times the weight of other pension amounts, if someone computed a raw average of the plan as a whole.

Reason 3: The same pension amount is reported in fragmented parts

Another potential error is when one employee’s pension is reported in fragmented parts. This could come from a divorced spouse receiving a portion of their pension or even in cases where the retiree changed departments and received a pension amount under two or more different formulas. As indicated above, when calculating an average, this reduces the pension amount by at least 50 percent, while giving this pension the weight of two or more entries, which lowers the raw average.

Conclusion

While it makes sense for pension plans to keep their payroll records in the format that is most efficient and accurate for them, it presents challenges for those citing “average” pension amounts. It is the responsibility of anyone who uses pension averages in their arguments, either for or against pension reform, to use accurate data that faithfully represents the point being made.

As demonstrated above, there is much more to calculating average pension amounts than it appears at first glance.

 

Obamacare

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.


Obamacare

Hindsight is said to be 20/20, but you and I didn’t need to see the implementation of Obamacare to know it would have a disastrous impact on American families and come between many individuals and their doctors.

Free-market analysts, like Cato Institute Senior Fellow Michael Tanner and those on NPRI’s staff, accurately forecasted the consequences of Obamacare years ago.

I’ll bet there were even times during the last seven months when you thought to yourself, “That’s what I said was going to happen ... four years ago.”

Like when the media finally realized that Obamacare kicked millions of Americans off their health care plans — and will force tens of millions more off when Obama stops arbitrarily delaying parts of his signature legislation. Many of those same Americans lost long-time family physicians, and now face exponentially higher premiums and deductibles for what is often less coverage than they had to begin with.

The law is far less popular than supporters have tried to claim, and sign-ups among young, healthy adults who will pick up the tab of the older and sick are lagging. 

As NPRI predicted, Obamacare has caused Medicaid enrollment — and the cost of providing it — to soar, further burdening cash-strapped taxpayers.

The CBO has now projected that Obamacare will increase the federal deficit by $226 billion by 2019, and we now know that Obamacare will cost the nation 2.5 million full-time jobs over the next decade by removing health insurance as a major incentive to stay employed.

As destructive as Obamacare has been, it has shown, once again, why we can and should trust free-market principles.

It’s not enough just to be right about what’s wrong, which is why free-market supporters are appropriately seizing the opportunity to turn from a policy that has profoundly hurt millions of Americans and offer real solutions for health care reform.

Michael Tanner has co-edited a book on free-market solutions to health care problems, and recently, he published an analysis titled Obamacare: What We Know Now.

When it comes to people who understand the current state of health care and the solutions the free market has to offer, Michael Tanner is among the best. And I’m excited to tell you he will be the keynote speaker at NPRI’s Spring Celebration on June 18 in Reno, so you can have the chance to hear his insights first-hand.

The only way to improve the access Americans have to quality, affordable health care is to limit government involvement and give individuals the freedom to choose the doctors and health care plans they like best. As we’ve seen with public education, a government-controlled monopoly is a sure way to run up costs and achieve substandard outcomes.

I hope you’ll join us in June to learn more about the free-market solutions to our nation’s health care problems. If you’d like more information on the event or if you’re ready to reserve your seat, you can do so here.

Thanks for reading and have a great weekend.

Andy Matthews
NPRI President


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Spotlight

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.


Spotlight

It’s the day every overpaid government bureaucrat dreads.

It’s the day when the sun shines in and everyone can see exactly how much government employees make.

This year, that day was yesterday. What day am I referring to?

The day NPRI releases government salary information on TransparentNevada.com, and everyone in the state can see exactly what government employees made in the last year.

Thanks to NPRI’s TransparentNevada, everyone can now see that, in 2013, a whopping 2,022 government workers made more than Gov. Brian Sandoval’s $183,120.29 compensation package. It didn’t stop there — 22,052 public workers made over $100,000 and 1,290 made over $200,000.

Beyond just the raw numbers, TransparentNevada reveals shocking increases in government compensation.

Take the City of North Las Vegas, which is still teetering on the brink of insolvency. Did its employees see a big pay decrease? Nope. Just the opposite.

The 500 highest earners in the city saw their compensation increase by an average of $5,000 apiece, for a total increase of $2.52 million. This included the cash-strapped city’s library director, who took home $427,487.15. And she wasn’t even the highest paid employee. North Las Vegas had a deputy chief of police pocket $458,146.39 in 2013.

With salaries like these, it’s no wonder that governments are constantly demanding more and more from taxpayers.

In Washoe County, citizens had to fight tooth and nail to stop a property- and sales-tax increase. Clark County has recently increased its gas tax, and there are attempts to raise sales and property taxes, too. And of course, there’s the margin tax looming on the November ballot.

Why is more never enough with government?

In large part, it’s because of exactly what you find on TransparentNevada — government salaries keep getting bigger and bigger, and union bosses still demand more!

How will spending more on education help anything, when the Clark County School District went from having two administrators making over $200,000 in 2012 to five in 2013? This lack of accountability is just one reason spending more won’t improve education or other government services. How will paying more to the same people doing the same job improve anything?

It won’t.

This is why we need TransparentNevada. TransparentNevada exposes the salaries government bureaucrats desperately want to hide and produces the outrage that makes it politically possible to challenge government unions.

Will you support our TransparentNevada efforts right now by donating $20.22 in “honor” of the 2,022 government employees who took home more than the governor?

The information on TransparentNevada is a crucial part of showing why tax increases aren’t necessary.

Consider Las Vegas Metro, which has been pushing for a sales-tax increase for over a year. In 2013, it paid two assistant sheriffs $512,469.92 and $467,529.63.

Why give more tax money to a government agency that shelled out roughly $1 million to two employees?

Last year, the City of Henderson, which wants to raise property taxes on its residents, paid a deputy fire chief $500,560.95.

And lest you think it’s only Southern Nevada that has high employee compensation, nine of the 10 highest paid government employees are in Reno, including the Reno-Tahoe Airport Authority president who collected $521,674.92.

Then there are the three Washoe County Sheriff Deputies who made more in overtime than in base pay in 2013.

And this is happening as the average Nevadan has faced a decline in income of more than 13 percent over the last several years.

It’s outrageous, and only TransparentNevada lets you easily see and share this information, which changes the hearts and minds of those who are exposed to it.

Will you donate $20.22 or more right now to ensure that even more Nevadans learn about these outrageous salaries?

Thank you for support.

Sincerely,

Andy Matthews
NPRI President

P.S. Last year TransparentNevada earned almost 2 million page views, and by the end of the week, we’ll surpass 1 million page views for 2014, which will put us on pace to reach more people than ever before with this information.

This salary information — searchable by name — is changing the public’s attitude about government employee compensation and helping voters realize that high salaries are causing budget problems throughout our state.

Will you help us share TransparentNevada with more people than ever before by making a donation of $20.22 or more immediately, in recognition of the 2,022 government employees who last year made more than the governor?

Your support of TransparentNevada will make a difference for liberty. Thank you.


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Pension millionaires

Do you know someone who’s a millionaire?

Hi, I’m Andy Matthews.

Your immediate response might be ‘no,’ but if you know a retired government worker, chances are, you do.

A new study finds that Nevada’s pension benefits are the most generous in the entire nation, even compared to wealthy states like California and New York, where the cost of living is high.

Receiving an average pension of over $64,000, the average government retiree with 30 or more years of service in Nevada is on track to get more than $1.3 million over the course of retirement! And this doesn’t include the tens of thousands of dollars in health care benefits many retirees receive.

This study doesn’t even consider public safety employees, who can retire in their 40s and make several million dollars in retirement.

If a $64,000 retirement pension sounds like a lot, that’s because it is. In Nevada, the median household income is $54,000. In fact, Nevada’s retirees are doing better, salary wise, than 87 percent of the state’s current, full-time work force.

Is it any wonder that Nevada PERS has an unfunded liability of around $41 billion?

Eventually, this burden will catch up with us. While the legislature has increased contribution rates in recent years, retirees risk benefit reductions unless the system is soon reformed. As bankruptcy proceedings in Detroit have shown, not even public pensions are safe in times of fiscal collapse.

It’s time to enact retirement plans comparable with private-sector plans. Just as with Social Security, defined-benefit plans should base payouts on an employee’s career earnings, not the final three years’ wages, and all employees should be shifted into a hybrid or defined-contribution plan.

 

Voting to extend unemployment

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.


Voting to extend unemployment

Earlier this week, Nevada’s U.S. senators succeeded in advancing a plan to hinder the nation’s economy.

The Senate voted 59-38 to reward not working by reviving long-term unemployment benefits. If the House follows suit, unemployed Americans will be able to reap combined federal and state jobless payments for 18 months.

Sen. Dean Heller co-authored the legislation, and Sen. Harry Reid vilified those who wouldn’t support it, saying “They don’t care.”

Unsurprisingly, Reid gets it wrong. Those who think extending unemployment benefits — retroactively, no less — is bad policy care deeply about the unemployed. We care about them enough to want to help them work again.

Time and time again, research has shown that increasing unemployment benefits increases unemployment; it does not reduce it or stimulate the economy. Proponents of long-term unemployment benefits argue that the subsidies allow people to hold out for better, higher-paying jobs, but the data shows that the key to economic growth is a populace that works.

Even President Obama’s former economic advisor, Larry Summers, admits that “unemployment insurance lengthens unemployment spells." The list of economists who recognize this goes on and on, and even includes Paul Krugman, at least when wearing his “economics textbook author” hat. Recent, real-world case studies also confirm this truth.

North Carolina reduced in-state unemployment benefits and shortened the length of time recipients could reap the benefits, and — this might shock Harry Reid — the state’s unemployment rate fell to a five-year low. Georgia and South Carolina also reduced unemployment benefits and saw their unemployment numbers decline.

Despite what the data has consistently shown, Sens. Reid and Heller are working to make a safety net into a comfortable hammock. And, when one considers all the welfare benefits the State of Nevada has to offer, that hammock entraps people instead of motivating them.

My heart goes out to anyone who has lost a job, particularly in this still-stagnant job market. But the solution to ending long-term unemployment isn’t to pay people to remain unemployed longer, but rather to get the government out of job creators’ way. Removing onerous regulations and debilitating business taxes would create an environment in which businesses can thrive and hire.

It’s foolish to throw money we don’t have at a problem, when doing so will only make it worse.

On a different note, I’d like to congratulate “fsdnevada” for picking Kentucky to be in the national championship game and for winning our NPRI Bracket Challenge. Fsdnevada, if you’re reading this, please send me your address. We tried to message you to get your address so we could send you the signed Jonah Goldberg book you’ve won, but your ESPN account no longer exists.

One last thing: I’m off to Mexico for a few days next week, to give a speech, meet with some business leaders, do a little sightseeing and lay the groundwork for the forthcoming launch of Transparent Mexico (OK, just kidding about that last one).

But in all seriousness, I’ll be staying in Ajijic, a town not far from the city of Guadalajara, so if any of you know the area well and have some favorite spots I ought to check out, I’d love to hear your suggestions.

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

Andy Matthews
NPRI President


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Unsustainable salaries become unsustainable: Reno edition

Thirty-five Reno firefighters and their families, as well as all city residents, are about to experience the pain that is the inevitable result of unsustainable salary and benefit increases.

Today, the Reno Gazette-Journal reports that the City of Reno is preparing to lay off 35 firefighters and begin part-time closures of three fire stations because it did not receive a federal grant that would have covered its burgeoning costs.

In response, City Manager Andrew Clinger said, "We knew this was a possibility, and we've been working on a restructuring plan for some time to ensure the continued safety of our citizens."

Unfortunately, Nevada’s collective bargaining law makes the most obvious restructuring plan, reducing inflated compensation, difficult to impossible. And firefighter compensation is quite high in Reno.

In 2012, the last year for which data is available, 12 of the 286 people employed by the department took home over $200,000 in salary and benefits. Sixty-three made over $150,000, and nearly everyone made over $100,000.

All compensation data can be found at TransparentNevada.com, but here’s a snapshot of what some of the department’s brass received in total compensation in 2012:

  • Paul Keckley, a fire battalion chief, took home $280,358.08.
  • Frederick Kajans, fire battalion chief, took home $278,006.88.
  • William Munns, fire battalion chief, took home $259,973.88.
  • Timothy O’Brien, fire battalion chief, took home $257,120.78.
  • Dana Tucker, fire battalion chief, took home $251,971.72.

Considering the median combined household income in Reno is $47,814, the salaries — even the $100,000-plus ones — are extravagant.

Public employee compensation packages are severely inequitable with the private sector, and as made evident by Reno’s latest move, are unsustainable. If the department’s unions refuse to compromise and the legislature fails to modify or eliminate the collective bargaining law, the only thing residents and employees have to look forward to in the future are similar cuts to city services. 

The 35 firefighters who will be laid off didn’t create the glaring systemic problems within the department’s budget — collective bargaining had the biggest role in that — but they and the citizens who experience slower response times and lesser service will be its victims.

Let’s hope state lawmakers are learning from Reno and North Las Vegas and will make changes next session that allow cities to make significant long-term changes to their employee costs.

 

Truth about the Texas margin tax

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.


Truth about the Texas margin tax

It’s not often voters get a trial run before they sign off on a new tax, policy or program.

A lot of the time, the actual impact of a ballot measure isn’t known until it is implemented, or even years later.

Fortunately for Nevada voters, we don’t have to guess or speculate about what will happen if the margin tax passes this November: All we must do is look to Texas.

Texas enacted a margin tax in 2008, becoming the first and only state in the union to implement this particular type of gross-receipts tax. Now, a move is under way to repeal that tax, which hurts small and family-owned businesses, creates a paperwork nightmare for businesses and has for years prevented Texas from reaching its full economic potential.

Since its implementation, the margin tax has forced businesses to scale back production, cut pay and benefits, raise prices, lay off workers and even close their doors. Many companies saw their tax burden increase tenfold under the margin tax, and thousands of Texans have lost jobs as a result of the tax.

After the tax was enacted, Texas’ business-tax-climate rank dropped from seventh to 13th best in the nation, reducing the Lone Star State’s competitive advantage.

And for all of the pain the tax has caused families, the Texas margin tax has brought in billions less in revenue than projected.

Supporters of the Nevada proposal — which would impose a margin tax rate two-to-four-times higher than that in Texas — dismiss the problems Texas has had with the margin tax and instead point to the state’s economy, which is booming in comparison to Nevada’s. While it’s true Texas has flourished in recent years, it’s not because of the margin tax, but in spite of it.

Unlike in Nevada, where nearly 85 percent of the land is federally owned, very little of Texas is owned by the federal government, meaning Texas’ land and resources are available for private citizens to use, creating jobs and economic growth. Additionally, Texas’ oil resources give it an economic boost, it has less business red tape than Nevada, it has relatively cheap energy and has a minimum wage at the federal rate.

Several studies have explored the idea of changing or repealing the tax and found that repealing it would create 41,500 net new jobs within a matter of years, add $3.4 billion in net new investment and increase personal, disposable income by $9.8 billion.

State Sen. Craig Estes is one of the many Texans to recognize the benefit of ridding the state of this destructive tax, so he has introduced a bill to repeal it. Hoping to educate Nevadans about what a margin tax means for a state’s economy, the senator is coming to the Silver State next month to give talks in Las Vegas and Reno.

As voters consider Texas’ margin-tax mistake, it’s important to understand the economic implications of such a move. I hope you’ll take a couple hours out of your day on May 13 if you’re near Las Vegas or May 14 if you’re in the Reno area, to join us in listening to the insights Sen. Estes has to offer.

And congratulations to “fsdnevada,” who is leading our NCAA bracket challenge this week!

Thanks for reading and have a wonderful weekend.

Andy Matthews
NPRI President


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Flores implies margin tax is not fair, equitable or sustainable

When you’re right, you’re right. And in detailing some of the problems with the margin tax, Lt. Gov. candidate Lucy Flores is spot on.

On Tuesday, asked via email by the Review-Journal to clarify her position (on the margin tax), Flores wrote:

“I mean that it’s not the solution that I favor,” she said. “I prefer a broad-based approach — one that is fair, equitable and sustainable.”

So let’s see.

The margin tax would greatly impact some industries more than others. For instance, in Texas, law firms can deduct more of their expenses than can farmers. So farmers end up paying proportionally more of the tax than lawyers. That’s not fair or equitable.

The margin tax also hits business that are losing money. That’s not sustainable.

I couldn’t agree more with Assemblywoman Flores. The margin tax isn’t fair, equitable or sustainable.

Unfortunately, there are even more problems with the margin tax than that, but it’s great to see the candidate at the top of the Democrat’s 2014 ballot spelling out for voters the many problems of this proposed tax increase.

 

Public retirement in Nevada

It's the best in the U.S.

A new study by the American Enterprise Institute shows Nevada's public retirees reap the best benefits in the entire nation. And, the study doesn't consider the benefits of public-safety retirees, which are exorbitant.

Key take-aways from the study:

Total Records: 1824

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