Nevada public employee pension program must be reformed to be fair and save tax dollars

A new analysis of Nevada’s Public Employees’ Retirement System reveals just how out of whack state public government workers retirement pay is compared to those in the private sector who must foot the bill.

For the first time — due to the fact a judge has forced PERS to comply with the public records laws and release data about public employee retirement pay — Nevada Policy Research Institute has been able to calculate just what government retirees are being paid compared to their final year’s base salary.

NPRI researchers looked at retiree pensions of those who worked for 30 years and retired in 2013 in 10 government entities — the state of Nevada, Clark County, Washoe County, Las Vegas, Henderson, North Las Vegas, Reno and Las Vegas, as well as the state’s two largest school districts, Clark County and Washoe County. Not all retirees have worked 30 years.

Though the law states that public workers may retire after 30 years on the job at no more than 75 percent of the average of the final three years’ pay, NPRI found that state of Nevada employees who retired after 30 years are being paid nearly 84 percent of their final year’s base pay — and that is probably lower than the real percentage because the state refuses to release the salaries of law enforcement officers. Law enforcement in the cities and counties studied were drawing pensions greater than 114 percent of final base pay.

(Public workers hired before July 1, 1985, could retire at 90 percent of compensation.)

The retirees from the cities and counties are getting more than 100 percent of final pay and the two school districts average 89 percent.

This is partly due to the fact PERS counts as salary such things as call back, longevity and certain premium pay, as well as the employee’s portion of PERS contribution, though not overtime.

One problem is that PERS has an unfunded liability of more than $40 billion — when using standard accounting practices, which the government does not — and has only once in the past decade generated the required return on investments to cover its obligations, according to NPRI. Also state and local taxes have been raised over the years to cover the ever-increasing employer contributions — up 42 percent from 2002 to 2013 for police and fire employees and up 37 percent for others.

Since PERS is a state-operated system, any shortfall is not just the obligation of local governments, but of every taxpayer in the state, no matter where the retiree worked.

There is also the matter of fairness.

A study by based on 2011 Census Bureau data found that households headed by people who are 65 or older are bringing in median income that is just 57 percent of the median income of households headed by 45- to 64-year-olds.

Private sector employees must work half again longer than public sector workers before being eligible for retirement benefits.

Public employees in Nevada may retire after working only 25 years and then purchase up to five years of service credit called “airtime” and draw a full pension check for the rest of their lives and that of their spouses, if they so choose. Plus the pension is indexed to inflation. A government retiree can easily draw more taxpayer money in retirement than on the job.

We call on the Legislature to finally rein in this burgeoning unfunded liability by ending this defined benefit program and placing all new hires on a defined contribution program, similar to the 401(k) plans used by the private sector.

They should end the practice of allowing the purchase of “airtime” and not allow retirees to start drawing pensions until the age of 62, as well as making other reforms to keep the taxpayer from having to fund a retirement system that they themselves have no chance of even dreaming of.

A version of this editorial appears this week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record.

Nevada government pensions are the richest in the nation:

Nevada GOP governor rated worst in the nation by business newspaper

On the day the Las Vegas newspaper carries a front page story on the governor making his case to its editorial board for the biggest tax increase in the nation’s history, the editorial page of Investor’s Business Daily bluntly described him as the nation’s worst Republican governor.

“Wasn’t this supposed to be the year Republican governors showcase innovative, pro-growth economic reforms?” IBD asks. “Brian Sandoval apparently didn’t get the memo.”

Brian Sandoval (R-J photo)

The paper points out this will be the third time Sandoval has raised taxes, after repeated promises to not do so.

In his State of the State speech Sandoval did not propose a single budget cut, but he told the Las Vegas editorial board: “We’ve done the cuts. I’ve done the consolidations. We’ve done the sweeps (of funds to find revenue). I’ve done all that. I did make up my mind that I’m not going to move backwards anymore. And I also made up my mind I’m not going to put a future governor through this.”

Other than employee furloughs that started under Gov. Jim Gibbons, what has Sandoval cut?

IBD also pointed out that Sandoval is the same governor who handed billionaire Elon Musk a 20-year, $1.25 billion corporate welfare subsidy for his Tesla battery plant. “We wondered then who would pay for this golden handshake. Now we know,” the editorial comments.

IBD also said Sandoval can now be struck from any list for potential national office.

Newspaper column: ‘State of …’ speeches were entirely too much alike

Gov. Brian Sandoval giving State of the State speech (AP photo)

Earlier this month Gov. Brian Sandoval delivered his “State of the State” address to the Legislature. A couple of days later President Obama gave his “State of the Union” speech in front of Congress.

Obama is a liberal Democrat who faced both a House and Senate with Republican majorities.

Sandoval is a Republican who stood before an Assembly and a state Senate with Republican majorities, flanked by five statewide constitutional office holders who are all Republicans.

One would expect a chasm as wide as the Grand Canyon between the two speeches, right?

“I submit to you this evening that an education system for this century requires bold new ideas to meet the reality of our time,” Sandoval pronounced. “I am asking the Legislature to join me in beginning the work of comprehensive modernization of our education system to meet the needs of today’s students and the new Nevada.”

He proposed spending more money on pre-school and all-day kindergarten, saying, “These two efforts provide a foundation for the future success of all our children.”

For his part, Obama said, “And in a 21st century economy that rewards knowledge like never before, we need to up our game.  We need to do more. By the end of this decade, two in three job openings will require some higher education — two in three. And yet, we still live in a country where too many bright, striving Americans are priced out of the education they need.  It’s not fair to them, and it’s sure not smart for our future.  That’s why I’m sending this Congress a bold new plan to lower the cost of community college — to zero.”

Obama wants to raise taxes by $320 billion over the next decade by raising the capital gains taxes, fees on big banks and other taxes to pay for that free community college, as well as universal childcare and assorted tax breaks for the middle class, most tied to childcare and education.

Obama has promised to use a pen and phone to act on his own if the duly elected Congress doesn’t agree to his agenda.

Sandoval wants to raise taxes and fees by $1.2 billion over the next two years for the general fund with nearly $900 million of that going to an assortment of education initiatives.

Some of the money would be raised by making a package of temporary taxes, which the governor twice promised to sunset, permanent. He also proposed creating a graduated business license fee based on gross receipts, which is very similar to a tax the voters rejected by nearly 80 percent in November. He even called for raising the modified business tax on mining companies’ payrolls from 1.17 percent to 2 percent, though voters have twice voted in the past two years to reject higher mining taxes.

To build schools to house all those students he proposed allowing school districts to rollover bond issues beyond what the voters agreed to.

He also called for creating a state run “Achievement School District” that would operate some of the state’s poorest performing schools no matter where they lie in the state geographically.

“I have asked former Washoe County Superintendent Pedro Martinez to help with this initiative as a Superintendent in Residence with the Nevada Department of Education,” the governor said in his speech. “Pedro is here tonight, and I thank him for his leadership on this critical issue.”

He did not deign to mention that “Pedro” was fired by the duly elected Washoe County School District board of trustees.

Sandoval even called for appointing school boards instead of having them elected by the voters.

“Although well intended, some of these boards have become disconnected from their communities,” said the elected governor. “I will therefore support legislation to provide for the appointment of members of local school boards.”

Obama and Sandoval both want us to dig deeper into our pockets to hand over money to benefit children, only Sandoval wants to dig twice as deep.

Obama’s $320 billion in taxes over the next decade amounts to $101 per capita per year.

Sandoval’s taxes and fees of $1.2 billion over the next two years comes out to $222 per capita per year.

So, which one is the tax-and-spend Democrat? And which one is the frugal small-government Republican?

Neither seemed too concerned about what the voters had to say.

A version of this column appears this week in the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel and the Lincoln County Record — and the Elko Daily Free Press.

Obama giving State of the Union speech. (AP photo)

All the news that can be fit between fluff and promotional ads

Promotional section in today's newspaper

Promotional section in today’s newspaper

It looks like they are taking the word news out of the local newspaper.

First, a burger joint on the Strip is given front-page promotional space for the second day in a row to breathlessly report that the place was closed for a couple of hours Wednesday afternoon so they could mop the floor. Talk about news you can use.

This was topped by a fluff piece as the banner story. It was about a couple of the Maloof brothers shilling for hockey tickets at a local sports bar during a televised hockey.

Though the story mentions that the brothers once owned a basketball team in Sacramento, it kind of sloughs over the gory details, such as those mentioned in an Ed Graney column in same newspaper in November.

Graney reported:

“Joe and Gavin Maloof were the darlings of Sacramento, and they loved basking in every second of admiration.

“But then everything fell apart. The recession hit. They began to strong-arm people. The arena deal was a disaster. Things went bad fast. They became villains overnight. One local official was quoted as saying that ‘Dealing with the Maloofs is like dealing with the North Koreans — except they are less competent.'”

Graney also noted that some of the four brothers — its hard to keep up with which one was doing what and with whom at times — sold the family beer distribution company to help save the Palms hotel and casino, but they sold that too. Today’s story makes no mention of the Palms, which is usually described as having been owned by brother George Maloof, though Wikipedia reports that Joe and Gavin sold the majority share of the Palms so they could continue working on stadium plans.

But the icing on the news cake is a 36-page special section touting a Review-Journal-sponsored “Successful Aging Expo” at Cashman Center this weekend. The section is just like those old “perspective” sections that small town newspapers used put out once a year in an attempt to sweep in advertising. Like those old “perspective” sections this one appears to be one in which every advertiser gets a “news” story touting their business that is commensurate with the size of the ad purchased.






Labor leaders declaring ‘war’ over a gentle pat on the head by lawmakers

Have you ever had a dog that yelps and screams before you slap it with a rolled up newspaper for destroying the couch?

The AFL-CIO’s Danny Thompson, the union’s executive-secretary treasurer, told a gathering of union members, according to the Las Vegas newspaper, “It’s as if they declared war on working families. The attack on collective bargaining is evidently coming.”

The attack on collective bargaining — for public employees only, by the way — are a couple of proposed bills to make the collective bargaining process more transparent for the taxpayers who have to foot the bill for public employee salaries. The process is currently conducted in utter secrecy.

AFL-CIO’s Danny Thompson (R-J photo)

The strongest measure would merely exclude supervisors from public union organizing and prohibit the use of tax money to pay the salaries of employees while they are doing work for the union, such as negotiating higher pay. Which is like paying someone to pick your pocket.

No one — in the Legislature at least — is proposing ending collective bargaining or even ending binding arbitration, which too frequently results in rulings for the unions.

And no one is talking about real reform of the Public Employees’ Pension System.

One union member reportedly shouted during the meeting, “These people are coming after you because they think you make too much money as it is.”

Well, now that you’ve brought it up.

You see, the Nevada Department of Employee, Training and Rehabilitation, usually thought of as the unemployment office, maintains stats on wages in Nevada and its counties. For the second quarter of 2014, the latest available, the private sector worker in Nevada was paid on average $806 a week. The average state government worker was paid a weekly wage of $887, while the local government wage was paid $1,025. Just for comparison sake, the average federal government worker in Nevada was paid $1,215 per week.

Then, about those pensions that no one is even addressing and keep climbing because of generous pay resulting from collective bargaining.

Nevada Policy Research Institute recently compiled stats that show government workers are retiring after 30 years — or 25 years if they pay for five years of PERS contributions — at 89 percent of their final salary for teachers, nearly 84 percent for state workers, 100 percent for local government employees and 114 percent for local law enforcement for firefighters.

In its 2013 annual report, PERS said the average monthly benefit payment was $2,654 for regular employees and $4,637 for police and fire. But that includes people who may have “vested” with as little as five years on the job and moved on.

By contrast, the average Social Security recipient gets about $1,294 a month, and the absolute maximum is $2,642 a month. And that’s after retiring with 45 to 50 years or more on the job, as opposed to 25 or 30 for Nevada public employees.

And job security in the public sector pretty is much a lock. You have to pretty much steal from the safe to get fired, but then you can still draw your pension.

If there is war, I think we can tell which side is winning.




Joblessness decline mostly due to seasonal adjustments and people leaving labor force

According to Nevada’s Department of Employment, Training and Rehabilitation, “Nevada’s unemployment rate for December fell to a seasonally adjusted 6.8 percent, down from 6.9 percent in November and 9 percent in December 2013. This is the lowest the rate has been since June 2008 when it was also at 6.8 percent.”

Yes, Nevada jobs have grown in number over the past few years but there was a hitch in the get-along in December from November in the unadjusted stats there warrant a cautionary note. In one month the labor force actually fell by 10,200 — which is accounted for the number of jobs falling 6,400 and the number of jobless falling by 3,800. This means much of the decline in the unadjusted statewide jobless rate — 6.9 percent to 6.7 percent — is explained by people leaving the workforce.

“The Silver State continues to experience positive gains in our job market, pointing to overall improvements in our economy,” said Governor Brian Sandoval. “I am pleased to see Nevadans are going back to work and employers are adding jobs, helping to strengthen our communities. There is still work to do and I remain committed to continuing our efforts to build a strong and sustainable economy for future generations.”

I don’t think $1.2 billion in new taxes will help much.




Nevada delegation seeks to head off Obama grabbing more land in the state

Polar bears in Alaska. (Reuters photo via WSJ)

They have this president’s number. They know where he is coming from and what he is capable of.

On Thursday, Nevada’s four Republican congressional representatives announced that they are introducing the Nevada Land Sovereignty Act of 2015, which would prevent the president designating or expanding national monuments by executive action without Congress approving. Bill Clinton did just that in 1996 by creating the Grand Staircase Escalante National Monument in Utah, and Obama did it last year with the San Gabriel Mountains National Monument in California and with the Organ Mountain-Desert Peaks in New Mexico.

On Friday, Sen. Lisa Murkowski introduced a bill that would have permitted oil production in the Arctic National Wildlife Refuge.

On Sunday, while on the way to India, Obama placed off limits for oil and natural drilling 13 million acres of land in the 19.8 million-acre Arctic National Wildlife Refuge. Technically he called on Congress to designate the area a wilderness area, the most restrictive designation, but the Interior Department intends to issue no permits for drilling there, effectively stopping any exploration immediately.

The war on oil and gas continues.

“It’s clear this administration does not care about us, and sees us as nothing but a territory. The promises made to us at statehood, and since then, mean absolutely nothing to them. I cannot understand why this administration is willing to negotiate with Iran, but not Alaska,” Murkowski said in a statement. Now, where have I heard that before?

“By shutting the door on any energy production in the coastal plain of ANWR, President Obama has once again used the stroke of a pen to unilaterally disregard U.S. energy security and the needs of local economies,” said Western Caucus Chairman Rep. Cynthia Lummis of Wyoming. “We all care about the environment, and thanks to American ingenuity we can produce oil on the coastal plain in an environmentally responsible manner, just as Congress always intended.  But our President would rather cater to special interests than pursue a truly balanced approach that supports our nation’s energy security and economic opportunity for the people of Alaska.  This is no way to treat a sovereign state and is indicative of how our President treats the west in general, mismanaging our public lands to the detriment of our nation and the people who actually live there.”

Republican Sen. Dean Heller said of the proposed Nevada lands bills:

“Currently, with a quick stroke of the pen, the executive branch can lock up millions of acres of public land without consulting the public or their representation in Congress. With more than 85 percent of Nevada’s land already managed by the federal government, public input and local support are critical to the decision-making process when changing federal land designations. This legislation ensures Congress and local officials are not bypassed by the executive branch when it comes to proposed national monuments in Nevada.”

Rep. Mark Amodei said:

“There is no good reason for major land-use decisions in Nevada to be done in secret without input from the local community and their elected representatives. This Administration has repeatedly said it does not need Congress. Our bill simply states, ‘Oh yes you do.’”

Rep. Joe Heck added:

“As the owners of more than 80% of our state’s land already, it should not be too much trouble to ask the federal government to allow Nevadans, their elected representatives, and the Congress to decide the locations and names of national monuments. Nevadans know our land and our monuments better than Washington bureaucrats.”

Freshman Rep. Cresent Hardy said:

“It’s important for Nevadans to decide how to use the land they live on. This gets back to one of the primary issues I’m personally focused on: the right of the states to determine what’s best for them – instead of allowing unilateral action by the president.”

Unilateral action is how this president rolls, as witness what he is doing to Alaska.

And then there is Nevada’s senior senator and Senate minority leader, Harry Reid, who has introduced bills create a 350,000-acre national conservation area at Gold Butte near Hardy’s hometown of Mesquite and another to ban oil and gas drilling and mining on 805,100 acres of land in Garden Valley and Coal Valley in Lincoln and Nye counties.