Taxes & Government Spending

Solutions for Nevada

Geoffrey Lawrence

The 2012 election cycle has seen many new challengers emerge for Nevada's legislative seats … and with good reason.

Nevada's effective unemployment rate — including workers who have become so discouraged they've stopped looking for work altogether — remains at 22.7 percent.

Nevadans spend more than taxpayers in most neighboring states to educate every child in the state's K-12 system, and yet, test scores are among the lowest in the West. High school graduation rates in Nevada have been in freefall for years and are now the lowest in the nation.

Failure doesn't stop there, though. The state's two flagship universities graduate only 12 percent of their students within four years, despite receiving a higher proportion of taxpayer largesse than the nation's leading public universities.

Medicaid costs — which were already increasing at an unsustainable rate — are set to skyrocket over the next budget cycle as provisions from ObamaCare kick in. Largely because of these new mandates, Nevada's Medicaid population is projected to more than triple by 2023. At the same time, the unfunded liability facing Nevada's Public Employees' Retirement System, when properly accounted for, is around $41 billion. That's as much as was spent out of the state general fund from 1986 to 2010 — a period of 25 years! Nevada's local governments owe another $23 billion to pay off construction bonds.

Just to service these mounting debts, state and local governments in Nevada will soon have to dramatically scale back spending in areas like education and public safety. The meager cuts of the past few years — which have consisted mainly of delayed pay raises and requirements that teachers contribute something toward their own retirement — will look like small drops in the bucket.

Nevadans have every right to be frustrated. They have waited patiently for solutions to emanate from Carson City and have been stiffed.

Even though Gov. Brian Sandoval proposed changes to the Public Employees' Retirement System that would limit these impending liabilities, and reforms for K-12 education that would empower parents and ensure greater accountability, Democratic leaders killed the ideas in committee — without even a hearing.

Many of the reforms that did win approval were gutted of any meaning. A merit-pay program was created to attract and retain the best teachers but received no funding. Local government finance was changed so that management employees could no longer collectively bargain (with themselves), but lawmakers ensured the language was written so narrowly that it wouldn't apply to anyone.

A performance-based budgeting bill was passed, but the statutory requirement for the governor to create a baseline budget was never removed. Baseline budgeting, after all, carries over — and sometimes even increases — spending on all current programs. There's no consideration as to whether those programs remain relevant or have accomplished their purported goals.

Baseline-budgeting is really just a scheme to ensure no accountability whatsoever over the use of tax dollars. In 2013, it will once again automatically hike requested spending by at least $1 billion more than was budgeted for the current biennium. And once again, lawmakers serving special interests will seize upon baseline-budget numbers to undermine attempts at government accountability — that a performance-based approach might impose — and to justify calls for new and higher taxes.

It'll be the same old political gamesmanship, all while lawmakers ignore the iceberg in front of the Titanic that is the State of Nevada.

It's a gloomy picture.

But Nevadans needn't despair.

The Nevada Policy Research Institute has created a pathway out of this mess.  Recently, the Institute released Solutions 2013: A Sourcebook for Nevada Policymakers.

Solutions 2013 — a comprehensive policy agenda for the upcoming legislature — highlights very specific problems and solutions in the areas of K-12 and higher education, bureaucratic organization, fiscal management, health care, energy, transportation, public safety and business regulation.

The document in most cases even points to model legislation that's already been created or to bills already enacted elsewhere.

The ideas contained in Solutions 2013 are powerful. Drawn from some of the most perceptive minds in the country, they have the potential to improve every aspect of state government.

Reform-minded individuals who are tired of politics as usual and want to again see a prosperous Nevada should seize upon this document.

Geoffrey Lawrence is deputy policy director at the Nevada Policy Research Institute. This article first appeared in Nevada Business. For more visit http://npri.org.

Geoffrey Lawrence

Geoffrey Lawrence

Director of Research

Geoffrey Lawrence is director of research at Nevada Policy.

Lawrence has broad experience as a financial executive in the public and private sectors and as a think tank analyst. Lawrence has been Chief Financial Officer of several growth-stage and publicly traded manufacturing companies and managed all financial reporting, internal control, and external compliance efforts with regulatory agencies including the U.S. Securities and Exchange Commission.  Lawrence has also served as the senior appointee to the Nevada State Controller’s Office, where he oversaw the state’s external financial reporting, covering nearly $10 billion in annual transactions. During each year of Lawrence’s tenure, the state received the Certificate of Achievement for Excellence in Financial Reporting Award from the Government Finance Officers’ Association.

From 2008 to 2014, Lawrence was director of research and legislative affairs at Nevada Policy and helped the institute develop its platform of ideas to advance and defend a free society.  Lawrence has also written for the Cato Institute and the Heritage Foundation, with particular expertise in state budgets and labor economics.  He was delighted at the opportunity to return to Nevada Policy in 2022 while concurrently serving as research director at the Reason Foundation.

Lawrence holds an M.A. in international economics from American University in Washington, D.C., an M.S. and a B.S. in accounting from Western Governors University, and a B.A. in international relations from the University of North Carolina at Pembroke.  He lives in Las Vegas with his beautiful wife, Jenna, and their two kids, Carson Hayek and Sage Aynne.