Nevada put all its tax incentive eggs in one technology basket

Did Nevada just double down on Betamax or VHS?

You remember the video tape format war of the 1970s? Both performed fine, but only one survived to become the standard. VHS won.

So it is with non-polluting cars.

Betamax vs. VHS

There are the all-electric vehicles, like Teslas, in which Nevada just “invested” $1.3 billion in tax breaks and credits for the next 20 years.

Then there are hydrogen fuel cell cars like the ones being built by Toyota.

Neither produces pollution while operating, but which will win the clean energy car quest? The electric car uses power produced from polluting power plants.

Both have a driving range of about 300 miles.

Neither of them have many places where an owner can recharge or fill up. Both take longer to fuel than pulling up to a gas pump, but the electric car takes eight hours or longer to charge.

Both have a fire danger. Lithium ion batteries have been known to burn in crashes. Who can forget the Hindenburg? But hydrogen fires can be less explosive than gasoline.

Current models of both cars are currently priced near $70,000.

Of course, both the Betamax and VHS are now obsolete, having been replaced by DVDs. Who knows what next generation technology is waiting in the wings — possibly in less than 20 years?

Toyota hydrogen fuel cell car

Tesla Motors all-electric cars

 

It’s not the EPA, now its the ESA — Economic Stimulus Agency

Talk about bait and switch.

We were told that the EPA rule demanding every state to cut carbon output by 30 percent by 2030 was about saving the planet.

Not so, EPA Administrator Gina McCarthy told Congress this summer. It is an economic stimulus program.

She told the Senate Environment and Public Works Committee:

“And the great thing about this proposal is it really is an investment opportunity. This is not about pollution control. It’s about increased efficiency at our plants…It’s about investments in renewables and

Gina McCarthy, head of EPA

clean energy. It’s about investments in people’s ability to lower their electricity bills by getting good, clean, efficient appliances, homes, rental units.

“This is an investment strategy that will really not just reduce carbon pollution but will position the United States to continue to grow economically in every state, based on their own design.”

Never mind that your power bills will go through the roof and so-called global warming will not be delayed one second, it is like the trillion-dollar stimulus program that produced no jobs, but simply moved money from the pockets of losers (taxpayers) to the pockets of winners (crony capitalists like Elon Musk).

 

Nevada lawmakers need to tackle public employee pension costs

When the Nevada Legislature meets in the spring it’s going to have to sharpen a lot of pencils to figure out how to balance the coming biennial budget.

Lawmakers must contend with growing public school enrollment, growing Medicaid enrollments, growing personnel costs and still relatively stagnant tax revenue.

The Carson City newspaper recently calculated that even if the $1 billion in temporary tax hikes — scheduled to be sunset on June 30 — are extended once again, the revenue will fall $120 million short.

But that’s not even the half of it, according to a recent report by a think tank called Truth in Accounting. You see, Nevada like most states manages to balance its current spending and current revenue by ignoring billions of dollars in obligations.

Truth in Accounting says the biggest culprit is public employee pensions. “Pension benefits are a part of employees’ compensation. Employees earn the benefits by providing services to current taxpayers. The elected officials gain political favor by promising these benefits,” the report says. “But they do not put money aside to pay them. They argue, ‘Hey if I don’t write a check for current costs. I don’t have to include it in the budget calculations.’ This is the reason many states have huge unfunded pension liabilities.”

Nevada has the 33rd worse budget shortfall among the states, failing to cover $2.7 billion of its $2.9 billion in pension liability. That amounts to financial burden of $3,100 per taxpayer.

“Nevada statutes require the legislature to pass a balanced budget. One of the reasons Nevada is in this precarious financial position is state officials use antiquated budgeting and accounting rules to report Nevada’s financial condition. Since employee retirement benefits are not immediately payable in cash, the related compensation costs have been ignored when calculating balanced budgets,” Truth in Accounting explains.

One way for lawmakers to begin to whittle down is huge unfunded obligation is to change its pension system from a defined-benefit plan, in which retirees get a percentage of their final salaries, to a defined-contribution plan, in which the state and the employees contribute money into a 401(k)-style fund.

In the 2013 Legislature, Republican Reno Assemblyman Randy Kirner introduced a bill to begin the transition to such a pension system. Assembly Bill 342 died without a whimper in the Assembly Ways and Means Committee, axed by the Democratic committee chairwoman.

Kirner’s bill would have created a hybrid retirement program for new employees hired after July 1, 2014. It would have been a half defined-benefit and half defined-contribution plan. It included a cap on annual benefits and a prohibition against workers buying years of service credit. This little scam allows some public employees to work for 25 years, purchase five years of service credits, and retire at the age of 45 with 75 percent of their top pay adjusted for inflation for life.

According to a study for the American Enterprise Institute by resident scholar Andrew Biggs, Nevada’s public pensions are the richest in the nation — $64,000 a year or more than $1.3 million in lifetime benefits. That doesn’t include public-safety workers, such firefighters and police, who can retire earlier and generally have higher salaries.

In fact Biggs has calculated a debt even higher that Truth in Accounting. He says that by using economist-preferred fair-market evaluations the annual contributions to cover costs and amortization of pensions would be $5.8 billion. The state’s annual general fund budget is only $3.3 billion.

Such a plan as Kirner put forward would only slow the financial bleeding, not stop it, but it would be better than nothing.

The state’s lawmakers need to get serious about balancing the state’s finances instead of cowing to public employee unions.

Newspaper column: No heretics allowed at Reid’s Traveling Planet Salvation Show

At this past week’s Brother Harry’s seventh-annual Traveling Planet Salvation Show with all-day preaching and frequent amens from the choir — Can I get a witness, Brother? — presumptive presidential candidate Hillary Rodham Clinton had the faithful standing in the pews with her hellfire and brimstone prognostications.

OK, the sign on the wall behind Clinton said it was the National Clean Energy Summit 7.0, which is put on by Senate Majority Leader Harry Reid, Nevada’s senior senator, but the rhetoric on global warming was overheated, to say the least,as reported in this week’s newspaper column, available online at The Ely Times, the Elko Daily Free Press and the Mesquite Local News.

“This is the most consequential, urgent, sweeping collection of challenges we face as a nation and a world,” Clinton recited from the Teleprompter. “You shouldn’t have to say the obvious, that the data is unforgiving, no matter what the deniers try to assert. Sea levels are rising. Ice caps are melting. Storms, droughts and wildfires are wreaking havoc. Thirteen of the top 14 warmest years have all come since 2000. … The threat is real.”

Harry and Hillary at clean energy confab.

There you have it. The fact that the planet’s average temperature might rise 1 degree Celsius over the next century is more consequential and more urgent to address with your money than Islamic terrorists, ISIS, Putin, Iran, North Korea or the Ebola virus. It is more pressing than the fact the current economic recovery is the slowest since World War II. It is more of a threat to you and yours than the fact that the national debt has increased by $61,000 per household under the Obama administration, while household private sector income has fallen $2,000 a year.

The inconvenient truth is that ice caps have grown in the past two years, while storms and droughts are no more frequent or severe than they have ever been, and there has been no global warming for nearly 18 years, which defies all the global warming computer models.

But everybody was on the same page of their hymnals. Renewable energy projects such as solar and wind are good for the planet and create lots of jobs, they all preached. Never was it mentioned that the renewable energy projects are not viable without taxpayer subsidies that simply kill other private sector jobs at a trade-off rate of two-to-one or that renewable energy simply costs more.

Actually, there were a couple of slips of the tongue from backsliders on the panels.

Jim Murren, chairman and CEO of MGM Resorts, which hosted the confab at Mandalay Bay in Las Vegas, quipped that he should achieve a return on his investment in a solar-equipped home by the time he is 172 years old.

And Paul Caudill, president of NV Energy, caused a few gasps when he cautioned that power customers cannot afford to pay 50 to 60 percent more for electricity too quickly, probably a reference to the fact solar and wind power cost three to four times as much as electricity from natural gas-fired generation.

Though the plans for a lithium-ion battery plant to be built in Storey County to produce batteries for Tesla Motor’s fossil-free electric cars was brought up repeatedly during the day as a great coup for the state of Nevada, it was never mentioned that the governor had cut a deal to allow the plant to operate nearly tax free for the next 20 years. The head of Tesla, Elon Musk, happens to be a Clinton and Obama campaign contributor.

Hillary Clinton, of course, called for still more taxpayer subsidies for her beloved green energy sources and contributors.

“We ought to be moving forward on renewables and the kind of sustainable clean energy future we seek,” she said. “Now today I don’t need to tell you that tax incentives for alternative energy investments are unpredictable at best, while generous subsidies for fossil fuels are still too easy to come by. In fact the world spends more than $500 billion subsidizing fossil fuels every year, bloating budgets and creating incentives against innovation and progress.”

While cherry picking that world subsidy number, she inconveniently neglected to point out that the U.S., according to the American Enterprise Institute, in 2010 doled out $14 billion in subsidies for renewables and $4 billion for fossil fuels. But, when broken down by actual energy produced, the subsidies for fossil fuels amounted to $68.72 per billion BTUs of energy, while renewables received $1,724 per billion BTUs.

They just don’t want to hear those inconvenient facts over in the green energy amen corner.

Everyone gets treated the same, if you bring enough cash

Senate Bill No. 1–Committee of the Whole
CHAPTER……….
AN ACT relating to commerce; authorizing a lead participant, on behalf of one or more participants in a project who undertake a common purpose or business endeavor in this State, to apply to the Office of Economic Development for the issuance of transferable tax credits and the abatement of employer excise taxes and certain property taxes and local sales and use taxes; providing that eligibility for such economic development incentives, in part, requires the participants in a qualified project collectively to invest at
least $3.5 billion in this State within the 10-year period immediately following the approval of the application …

That is the language in the bill meant to lure Tesla Motors to build a $5 billion battery manufacturing plant in Story County.

Now, do you think that if someone proposed to invest $3.5 billion in a private, commercial nuclear waste disposal facility in Nye County, for instance, that would be a “qualified project”? Just asking.

Yucca Mountain entrance (R-J photo)

Unprincipled: It matters not what is said, but who is saying it

Harry Reid is demanding an apology from a Louisiana Senate candidate for saying Reid runs the Senate like a plantation, but when Hillary Clinton said the same about the House eight years ago, Reid defended her remarks. Reid talks out of both sides of his mouth.

Bill Cassidy (E&E photo)

Bill Cassidy, a Baton Rouge Republican congressman, was quoted by E&E Publishing as saying Reid “runs the Senate like a plantation. So instead of the world’s greatest deliberative body, it is his personal, sort of, ‘It goes if I say it does, if not it stops.’ (Louisiana) Senator (Mary) Landrieu’s first vote for him to be re-elected means that every other wish for a pro-oil and gas jobs bill is dead. Reid will never allow a pro-oil and gas jobs bill.”

In response, Politico quoted Reid as saying, “With all of the things going on in America today, that’s fairly insensitive. That’s really insensitive. Very insensitive. And if there were ever a statement that deserved an apology, this is it. Big time.”

But he had a different tune in 2006 when then-Sen. Hillary Clinton told a mostly black audience in Harlem that the House “has been run like a plantation, and you know what I’m talking about. It has been run in a way so that nobody with a contrary view has had a chance to present legislation, to make an argument, to be heard.”

Reid shrugged off the comments by saying, “I didn’t listen to the speech, but no one can question her civil- and human-rights credentials. They’re the best.”

It is not what is said, but who is saying it.