What to expect from Carson City in 2015

Victor Joecks

The November wave that swept Republicans to victory not only solidified their control of the governor’s mansion but also saw them capture both chambers of the Nevada Legislature for the first time in 85 years.

So now what?

In the lifetime since Republicans last controlled the legislative process, liberal policies, decade after decade, have generated many problems for the people of Nevada.

The state suffers from the nation’s lowest high-school graduation rate and its students, collectively, consistently perform near the bottom of all states on standardized tests.

Public-sector pensions have huge underfunded liabilities. The growing annual payments that city and county taxpayers must make just to pay down their share of the pension debt already has pushed major jurisdictions to insolvency’s brink.

The ability of local elected officials to deal intelligently with local fiscal issues is sabotaged by inflexible collective-bargaining laws. Unelected arbiters essentially dictate contract terms. With personnel costs accounting for nearly 80 percent of operating budgets in most cities and counties, officials elected to right the fiscal ship find themselves handcuffed. Voters have no control.

Each of these matters can and should be addressed by the 2015 Legislature. A major cause of the state’s education problems is that state financial resources are committed to programs that have little-to-no impact on student achievement. Every year, hundreds of millions of dollars are poured into class-size reduction, full-day kindergarten, pre-K and other programs that scholars from left to right agree are extremely cost-ineffective. In reality, even the left-leaning Center for American Progress agrees those dollars should be redirected to better uses, such as merit pay for the most talented teachers.

More fundamentally, however, public education could be drastically improved by simply allowing parents the freedom to choose the schools their children attend. Because parents know their children best, parental choice programs, such as Education Savings Accounts, empower parents to find the schools and school types that are best for their children. Gov. Sandoval and legislative leaders have already indicated early support for a program of school choice, and that news should delight every parent in Nevada.

Pension reform for years has been the signature issue of Assemblyman Randy Kirner. In previous sessions, however, he was unable to move any bill out of the lower chamber’s Democrat-controlled committees. Now, a Republican Assembly majority provides Kirner with a real opportunity to address Nevada’s pension problems. The most-needed reform would begin transitioning public employees into 401(k)-style savings accounts akin to those the private sector enjoys. While ending unlimited taxpayer liability, these new accounts provide government employees with increased portability and flexibility.

Also likely to originate from the Assembly are collective-bargaining reforms. Liberal politicians have long colluded with unions on the rules under which local governments must operate — in exchange for the unions’ electoral support. Today, the bosses of Nevada’s public-sector unions — which are private organizations — enjoy powers of coercion over the public that no other individuals share. Public-sector unions enjoy a privileged position within the policymaking arena that even union advocates such as President Franklin Delano Roosevelt found unacceptable, supplanting the sovereignty of voting citizens.

Union political machines have long controlled Nevada election outcomes, so career politicians are usually reluctant to challenge unions. Thus, reports from the capital indicate that some Republican political leaders — either from fear or from deals struck — want to avoid collective-bargaining reform. But while the political clout of these unions can be intimidating, Nevada’s cities and counties desperately need the flexibility to control their own major spending decisions.

Gov. Sandoval has also indicated a desire for “tax reform” — a phrase that’s often simply a euphemism for tax hikes. While there are revenue-neutral improvements that should be made to Nevada’s tax structure, tax revenue has grown by nearly 20 percent in just the last four years, excluding the “sunset” tax increases. With the Economic Forum projecting revenue of $6.3 billion and fund sweeps likely to net another $200 million in spending, lawmakers can craft a budget similar to the current $6.6 billion spending plan without raises taxes.

In the end, the governor may only get his tax package after achieving significant reforms within public-employee collective-bargaining law.

A version of this commentary was originally published by Nevada Business.

Victor Joecks is Executive Vice President at the Nevada Policy Research Institute, a non-partisan, free market think tank.