NPRI reacts to Senate Republican tax increase proposal

  • Wednesday, April 24, 2013

CARSON CITY — Responding to today’s proposal by six Senate Republicans to more than double Nevada’s mining tax in order to increase education funding, NPRI’s deputy policy director, Geoffrey Lawrence, released the following comments:

If spending alone were the key to improving Nevada’s education system, then it’s particularly curious why educational achievement has languished over the past 50 years even as per-pupil spending has more than tripled on an inflation-adjusted basis.

This week’s news that the Clark and Washoe County School Districts each had 65-plus percent rates of failure on the math portion of the High School Proficiency Exam only further emphasizes the state’s inability to translate higher raw spending figures into classroom success.

In reality, there is no correlation nationwide between raw, per-pupil spending figures and objective measures of student achievement. What’s more important is how the money is spent, and Nevada has not spent well. Despite what the education lobby may say, the objective figures from the federal education department reveal that Nevada now spends more per pupil than a majority of its neighbors, despite getting inferior results.

If Nevada lawmakers were to pursue the same reform agenda as neighboring Arizona — which spends $900 less per pupil than Nevada — students in the Silver State would benefit dramatically. Unfortunately, Nevada lawmakers have ignored these objective facts and yielded to the demagoguery of special interests who want more money, but minimal accountability.

Lawrence noted that the Clark County School District has only fired two principals in the last 30 years and that its rate of removing poorly performing teachers is a microscopic one-tenth of one percent a year.

Spending $600 million more on education, or even $600 billion more, won’t increase student achievement in a system that consciously demands no accountability and faces only inconsequential competition.

In the private sector, poor performers are told to shape up or ship out. With this proposal, however, these Republican politicians actually seek to reward an unaccountable system that fails tens of thousands of students each year.

The entire premise of the Senate Republicans’ proposal is flawed: It’s not a lack of money that’s holding back Nevada’s education system. It’s the failure of state legislators to stand up for kids and implement the reforms that have proven effective in states across the country — even in states that spend dramatically less than Nevada.

Remarking specifically about the tax portion of the Senate Republican proposal, Lawrence continued:

Government shouldn’t pick winners and losers through the tax code. Tax policy should minimize distortions in economic behavior and allow all entrepreneurs to compete on a level playing field.

Penalizing specific industries isn’t a valid goal of tax policy.

If lawmakers want to have a discussion about revenues from mining, it should center around how Nevada can take back the 85 percent of its lands currently controlled by the federal government. If these lands became available for private ownership and development, then state and local governments could reap immediate revenues from private auction as well as ongoing property tax revenues while miners could claim ownership over the minerals contained in their property without jumping through complex bureaucratic hoops.

Further, if changes to the way Nevada collects taxes are to be considered at all, it should be on a revenue-neutral basis only. There’s merit to tax reforms such as simplifying the tax code, eliminating tax-induced distortions, and reducing volatility. But the facts make it clear that Nevada’s failures don’t result from a lack of revenue — they result from the continued inability of policymakers to allocate existing resources well.