Texas bill would truly create school choice, perhaps Nevada should try it

If Gov. Brian Sandoval likes the way they do things in Texas — why else would he propose a business license tax based on gross receipts, a margin tax, just months after the voters rejected the concept at the polls and while Texans are trying to repeal their margin tax? — perhaps he’ll embrace a bill pending before Texas lawmakers to make school choice a practical and financially feasible reality.

At a Dallas elementary school (AP photo via WSJ)

Senate Bill 276 would give any parent who opts to send a child to a private school, any private school, up to 60 percent of what the state would spend to educate that child in a public school — currently about $5,200.

According to the Texas Tribune, the bill would not require private schools to be accredited or follow any curriculum standards. It would be solely the responsibility of parents. Unlike most of Sandoval’s plans the Texas bill would not limit eligibility to low-income families.

The bill states: “A parent or legal guardian of an eligible student who agrees to accept reimbursement in an amount that is less than the state average maintenance and operations expenditures per student may receive reimbursement from the state for the tuition paid for the enrollment of the eligible student at a private school in an amount that is the lesser of: (1) the tuition paid; or (2) 60 percent of the state average maintenance and operations expenditures per student.”

The writers of a Wall Street Journal op-ed observed: “This year, lawmakers should seize the opportunity to leapfrog other states by enacting universal educational freedom, putting Texas in a position of leadership. Texas is a bellwether — it is, as the saying goes, where the future comes to be born. If it can succeed in giving all parents the freedom to choose what’s best for their children, then reformers may be able to do the same elsewhere.”

Like Nevada?

Don’t expect Obama’s Justice Department to prosecute either Hillary or Harry

Hillary Clinton (Reuters photo via WSJ)

So, Hillary Clinton has wiped clean her email server that she used while serving as secretary of state.

“We learned today, from her attorney, Secretary Clinton unilaterally decided to wipe her server clean and permanently delete all emails from her personal server,” said House Select Committee on Benghazi Chairman Trey Gowdy on Friday.

Will the Justice Department take any notice of this? Ronald Rotunda, a professor at Chapman University’s Fowler School of Law, explained recently in The Wall Street Journal why it should:

The law says that no one has to use email, but it is a crime (18 U.S.C. section 1519) to destroy even one message to prevent it from being subpoenaed. Prosecutors charging someone with obstruction don’t even have to establish that any investigation was pending or under way when the deletion took place. As T. Markus Funk explained in a journal article for the National Association of Criminal Defense Lawyers, the prosecutor “need only prove that the defendant shredded the documents, at least in part, to make life more difficult for future investigators, if and when they eventually appear.”

Legal commentators call this “anticipatory obstruction of justice,” and the law punishes it with up to 20 years imprisonment. The burden of proof is light. The Justice Department manual advises that section 1519 makes prosecution much easier because it covers “any matters” or “’in relation to or contemplation of’ any matters.” It adds, “No corrupt persuasion is required.”

Will Justice take any heed of recommendations for the prosecution of Harry Reid, as called for by former U.S. Attorney Joseph diGenova and Cause of Action?

Here is an excerpt from Brietbart News:

“Here’s the issue,” diGenova tells Breitbart News in an exclusive interview. “Because his son was involved representing the SLS Casino and Hotel that sought the expedited EB-5 visa processing from the Department of Homeland Security, and because Harry Reid intervened personally, there is obviously the appearance of impropriety here.”

“The Senate Ethics Committee, if it examines this independently, would see this as an instance of Reid ‘bringing reproach upon the Senate.’”

“But there is also the issue of criminal conduct. This requires further investigation,” diGenova says.

“There is no doubt in my mind,” diGenova continues, “that an independent Department of Justice or an independent U.S. Attorney would open a preliminary criminal investigation into Harry Reid’s intervention into the expediting of EB-5 visas and would in addition convene a grand jury.”

“I would open a grand jury on this in a New York minute,” diGenova says.

Don’t hold your breath. This is Obama’s Justice Department. The name itself is an oxymoron.

Harry Reid (Screen grab from video on YouTube)

Pathetic Sun embarrasses its reporters by printing eclipsed ‘news’ stories

Sometimes you have to feel sorry for Sun reporters.

Today the only local story on the cover of the Sun section is a piece about the only man on a 25-member economic development agency board to vote against Gov. Brian Sandoval’s tax increases. The print version tells us the tale was posted online Thursday, while the online version says it was post at 2 a.m. Thursday.

The gentleman in question was especially critical of the governor’s business license fee proposal that taxes businesses based on their gross receipts, comparing it to the failed margin tax on the November ballot and saying something about lipstick on a pig.

The penultimate paragraph of the piece helpfully informs the reader that the Las Vegas Metro Chamber of Commerce has hired a high-end think tank to study “viable alternatives to reform the state’s tax structure.”

The problem is that the Chamber’s think tank came out with a study blasting the governor’s business license fee on Thursday and the governor immediately launched an ad hominem attack on the study and the Chamber.

But the poor reporter’s story in print talks about things that are going to happen, though they already have.

Additionally, the Sun has a brief story online about how the Sun’s patron saint Harry Reid has announced he will not seek re-election. The story was posted nearly 21 hours after the announcement, but there is nothing in the print edition.

They are not even phoning it in any more. How embarrassing. What do you call newspaper that doesn’t print news? The Sun?

Sun's story eclipsed by events before it is printed.

Sun’s story eclipsed by events before it is printed.

 

Newspaper column: Former Gov. Miller touts his failed education spending to promote Sandoval’s plan

This past week Gov. Brian Sandoval presented his proposed business license tax based on gross receipts in the form of Senate Bill 252 to a joint meeting of the state Senate and Assembly taxation committees. He insisted his proposal is not like the margin tax soundly defeated by the voters in November.

“The business license fee (BLF) as proposed is broad based because it will apply to all Nevada businesses,” Sandoval said. “The BLF is fair … It also differentiates between business types. Businesses have different costs of labor and goods and the BLF recognizes that. Construction is not the same as a retailer and a retailer is not the same as a resort hotel.”

Former Gov. Bob Miller testifies for raising taxes to support public education.

The margin tax pushed by The Nevada State Education Association would have imposed a 2 percent tax on the gross receipts of all Nevada businesses that gross more than $1 million a year, regardless of profitability.

Sandoval’s plan doubles the business license fee on all businesses from $200 to $400 and also imposes a tax on gross receipts. SB252 is a 130-page behemoth with 27 separate tax tables for different industries. For some industries the tax kicks in at about $125,000 a year and for others it doesn’t apply until nearly $200,000 a year. The tax rates vary from a low of 0.056 percent for mining to a high of 0.362 percent for rail transportation.

The margin tax was estimated to hit private industry with $800 million a year in taxes, while Sandoval has said his tax will rake in $250 million. The lowest tax would be $400 and the highest would be $4 million.

For all its flaws, the margin tax was uniform. Sandoval’s is a contortion. Those 27 different tax tables arguably defy the state constitutional mandate that: “The Legislature shall provide by law for a uniform and equal rate of assessment and taxation …”

To help sell his tax hike, Sandoval dragged before the tax panels former Gov. Bob Miller as a living, breathing illustration of just how ineffective his plan to spend more money on education will be.

Miller pushed for and the 1989 Legislature approved a class-size reduction in grades first through third.

“I along with many people in this room have been fighting to modernize our education system through both reforms and the creation of a stable broad-based funding source, and this session is the best opportunity we will likely ever have to reach this goal,” Miller testified. “In the 1990s our focus, mine and the Legislature, was on class-size reduction and early childhood programs … but here we are today, and as most of you know, the statistics are depressing about our state’s education system.”

He went on to cite the facts that students are reading below grade level and 30 percent aren’t graduating from high school.

Since 1990 the state has spent close to $2.5 billion on Miller’s class-size reduction — which like Sandoval’s plans for all-day kindergarten, early childhood education and various special million-dollar programs seemed a no-brainer at the time — but the results have been nil. In fact, in some cases the results have run counter to what was expected.

A 2001 report by the Nevada Legislative Counsel Bureau found that, while principals, teachers, and parents were very positive in their attitudes toward class-size reduction, achievement data did not produce results. Students in larger classes outperformed those in the smaller classes.

Twenty-five years and billions of dollars later Miller is back and saying the system is broken and we need to spend billions of dollars more on special programs, largely the same as he did years ago. Why should we believe him again?

Two ideas Sandoval has put forward, but without much specificity, might improve things: stop promoting third graders who cannot read and provide incentive pay to teachers whose students show improvement on assessment tests. Neither requires tax hikes.

The Nevada Registered Agent Association commissioned a study of SB252 that estimated its enactment would cut new business filings in Nevada by approximately 44 percent in fiscal year 2016 and 63 percent in FY 2017. The study also estimated that the proposal overstates its revenue projections by approximately $42 million in FY 2016 and by about $65 million for FY 2017. NRAA Study

How long will it be before the the business license tax is increased? Better yet, how long will it be before we see improvements in education?

According to the Cato Institute, Nevada has increased inflation adjusted per pupil spending more than 80 percent since 1972, but SAT scores have fallen.

Meanwhile, no one is suggesting any budget cuts.

Cato Institute study of Nevada education spending and the results.

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, the Lincoln County Record and the Sparks Tribune — and the Elko Daily Free Press.

Sandoval lashes out at criticism of tax without rebutting a single fact

Gov. Brian Sandoval engaged in the lowest of political treachery and deception, launching into an ad hominem attack on the Tax Foundation’s analysis of his business license fee (BLF) based on graduated gross receipts.

Sandoval said of the study commissioned by the Las Vegas Metro Chamber of Commerce:

“The report issued today by the Las Vegas Metro Chamber of Commerce’s Tax Foundation is utterly irresponsible, intellectually dishonest and built upon erroneous assumptions. I know I am not alone in expressing my disappointment in the Chamber’s judgment especially for an organization that repeatedly claims to want to help move Nevada forward. Moreover, this act sits in direct contradiction to what the Chamber’s leaders have expressed to me on several occasions privately in my office. The only good to come from this stunt is that for those of us who are working in good faith to solve Nevada’s education challenges, it removes all doubt about where the Las Vegas Chamber stands. I believe the Chamber’s leaders have done their membership a terrible disservice and have harmed the credibility of an organization that purports to stand for education.”

The statement is all bluster and void of facts. He names not a single erroneous assumption. He makes no cogent argument, instead resorting to salacious name calling.

On the other hand the Tax Foundation study was dripping with facts and figures.

Gov. Brian Sandoval (Reno Gazette-Journal photo)

It is Sandoval who is probably engaging in erroneous assumptions. Both the Tax Foundation and the Nevada Registered Agent Association both say Sandoval’s estimation that the BLF will eventually net $250 million a year in revenue is wildly inflated. The agents say it is overstated by $65 million a year and the Foundation says it may be as much as $100 million. Both say the governor overstates how many will pay the tax.

The Foundation notes the governor projects a growth in the number of business licenses from the present 308,000 to 340,000.

The Foundation cites the agents’ study that estimated a net drop of 124,000 registered businesses in the state and a 55 percent reduction in new filings.

Of course, the spineless Chamber immediately disavowed any knowledge of the study and apologized to the governor for the “tone and tenor” of the study.

The Foundation called the tax a “complex, arbitrary tax that will do long-term harm to Nevada’s economic growth.”

“It will be Nevada’s most complex tax for both taxpayers and tax administrators, with a multi-step method of rate calculation bordering on arbitrary, 67 rates plus cliffs and phase-ins for each one, and unclear guidance for multi-industry and interstate companies,” the study said. “It is also decidedly non-neutral, with stated tax rates deliberately varying widely by industry such that it exacerbates tax pyramiding and likely violates federal prohibitions against discriminatory taxation.”

It also violates the state Constitution’s dictate that taxes be uniform and equal.

To illustrate the unfairness of the tax, the Foundation quotes the Guinn Center as saying: “Under the revised Business License Fee structure, publishing, software, and data processing were grouped into one category and taxed at a rate of 0.276 percent, the fifth highest rate. However, the profitability rate for those industries varies significantly: publishing (12.81 percent), software (4.19 percent), and data processing (0.80 percent).”

That is downright arbitrary and capricious, as well as utterly irresponsible, intellectually dishonest and built upon erroneous assumptions.

In an email responding to the governor’s ad hominem attack, the Tax Foundation listed key facts:

  • The proposal would convert the existing flat $200 Business License Fee into a tiered system of 67 revenue ranges for each of 27 industry categories. Additionally, foreign filers and non-employer businesses would pay a flat fee of $400, bringing the total to 29 categories of filers and 1,811 possible flat-dollar-amount tax liabilities.
  • The proposal is targeted to generate $250 million per year once fully implemented and is projected to raise $438 million over the first biennium. However, these revenue estimates may be overstated by hundreds of millions of dollars.
  • While attempting to mitigate the inherent flaws of gross receipts taxes, the designers of the BLF created a complex tax structure that violates the principles of simplicity and neutrality. The proposal requires significant additional administration costs and compliance burdens, and a quick implementation invites disaster.
  • BLF rates are arbitrarily calculated using Texas data from a single year, despite the high likelihood that such data is not representative of Nevada’s economy. BLF rates do not correlate with profitability, resulting in punitive taxes for some and taxation of unprofitable firms.
  • The BLF designers incorporated revenue cliffs that result in absurdly high marginal tax rates, reaching as high as 13 million percent. BLF designers concede pyramiding will be a problem, violating the principle of neutrality.
  • BLF industry categories were arbitrarily selected and will result in tax arbitrage and economic distortions, as seen in states with similar taxes.
  • Texas and Washington, while providing the model for the Nevada BLF proposal, are considering proposals to repeal their analogous taxes.
  • The BLF proposal violates the principle of transparency by mislabeling an obvious tax.
  • The BLF as proposed likely violates the interstate commerce clause and federal law.

Harry will not seek re-election

Today Harry Reid posted a video announcing he will not seek re-election.

Harry Reid says he is not running for re-election

Harry Reid says he is not running for re-election

He opens by commenting on the bruises on his face from an accident in his Henderson home when an elastic exercise band broke and knocked him to the floor. He then spends three and half minutes waxing nostalgic about his life and career without ever mentioning all the bruises he has doled out over the years.

With all the different scenes and panning of old still photos the video production has probably been in the works for at several days, while Reid kept insisting he would run for re-election.

Over the years Reid has become wealthy through stealthy land deals and using his power to help friends and hurt enemies. Just this week the watchdog group Cause of Action, which a year ago filed an ethics complaint against Reid, called for a Justice Department investigation of Reid and others over their pressuring a Homeland Security official to intervene and expedite visas for foreign investors — in Reid’s case investors for a Las Vegas casino represented by son Rory’s law firm.

The inspector general of DHS issued a scathing report.

We won’t have Harry to kick us around any more, but it’ll be a long two years until he leaves …

He sent out an email at 5:17 a.m. saying:

When I was a boy, I dreamed of being an athlete. I listened to those baseball games on the radio, and I envisioned myself as a man out in center field at Yankee Stadium or Fenway Park in Boston. But the joy I’ve gotten with the work that I’ve done for the people of the state of Nevada has been just as fulfilling as if I had played center field at Yankee Stadium.

The job of Minority Leader of the United States Senate is just as important as being the Majority Leader. It gives you so much opportunity to do good things for this country. And that’s what I am focused on.

But this accident has caused Landra and me to have a little down time. I have had time to ponder and to think. We’ve got to be more concerned about the country, the Senate, the state of Nevada than about ourselves. And as a result of that I’m not going to run for re-election.

I am going to be here for another 22 months, and you know what I’m going to be doing? The same thing I’ve done since I first came to the Senate.

We have to make sure that the Democrats take control of the Senate again. And I feel it is inappropriate for me to soak up all those resources on me when I could be devoting those resources to the caucus, and that’s what I intend to do.

Someone with my background, my upbringing, to have the experiences I’ve had is really a miracle. And I want you to know that I am so grateful for your invaluable support. I have done my best. I haven’t been perfect, but I’ve really tried my hardest to represent the people of the state of Nevada.

From the bottom of my heart, thank you.

Sincerely,

Harry Reid

 Isn’t that sweet? Reminds one of Peter Schweizer’s book, “Extortion,” which has a section on Reid.

Schweizer repeats a quote attributed to Reid’s one time chief of staff, Susan McCue, a woman who turned the term media relations into an oxymoron and someone with whom I’ve had the displeasure of the occasional telephonic shouting match.

McCue told a reporter Reid looks at a person’s vulnerabilities to “disarm, to endear, to threaten, but most of all to instill fear.”

The author also quoted Reid pal and former fellow senator, Richard Bryan, as saying Reid “has a memory like a political elephant. You cross him, he’ll never forget that. There will be a price to pay. Certainly there are people who paid the price.”

 

Time for Nevada lawmakers to put a stop to civil asset forfeitures

The whole concept of civil asset forfeiture turns the law on its head, essentially finding people guilty until they can prove their innocence.

Police departments and federal agencies across the country have been using civil procedures to seize cash, cars and homes that just might be somehow, maybe linked to a crime.

In Philadelphia a family’s $350,000 home was seized because police suspected their son was dealing drugs, for example.

In Humboldt County here in Nevada a county deputy seized $50,000 from a California tourist who said he’d won it at a casino, because he thought he might be a drug dealer.

Humboldt County deputy seized tourist’s cash.

According to a recording from a dashboard-mounted camera in the patrol car, the tourist asked why he was being searched, and the deputy replied, “Because I’m talking to you … well, no, I don’t have to explain that to you. I’m not going to explain that to you, but I am gonna put my drug dog on that. If my dog alerts, I’m seizing the money. You can try to get it back but you’re not.”

He also told the tourist, “You’ll burn it up in attorney fees before we give it back to you.”

Never mind that most cash these days have traces of drugs on it.

The tourist sued and eventually got his cash back.

In another Nevada case, the U.S. attorney’s office in Las Vegas demanded a local woman forfeit the $76,667 in salary she earned while running the office of her brother, who was later convicted of mortgage fraud.

U.S. District Judge Roger Hunt called the federal forfeiture effort against Jenna Depue “the most egregious miscarriage of justice I have experienced in more than twenty years on the bench. I refuse to be a party to it.”

Imagine working for someone for 20 years performing perfectly legal duties such as sweeping the floors only to have your boss convicted of a crime and learn the federal prosecutors are demanding you forfeit your life savings because those earnings were the issue of a criminal act.

Earlier this year, Attorney General Eric Holder finally saw the light and put a stop to letting local law enforcement agencies use the federal Equitable Sharing program, under which police used federal law to seize property and then get to keep 80 percent of the value of what was seized.

Recently, New Mexico lawmakers passed a bill essentially ending most civil asset forfeitures in that state until someone is convicted of a crime. It also would not let police agencies keep the proceeds of a seizure and instead channels it into the state general fund, thus ending an incentive for police to use seizures to raise money.

In Carson City, Republican state Sens. Don Gustavson of Sparks and James Settelmeyer of Minden have sponsored Senate Bill 138, which is similar to the one in New Mexico. It also requires a conviction prior to seizure and states that any money left over after expenses are covered goes to the general fund. The bill also mandates annual reports to the state on civil forfeitures.

The Fifth Amendment provides that “No person shall be … deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” But too often police intimidate people by basically extorting waivers of due process rights.

In case of the tourist in Humboldt, he was threatened with having his car impounded, too.

The Institute for Justice has been fighting civil asset forfeiture in the courts and on op-ed pages of newspapers for years. President and General Counsel Chip Mellor of IJ once said:  “The Institute for Justice has documented time and again that civil forfeiture invites a lack of accountability, a lack of due process and a lack of restraints on government authority. Civil forfeiture needs to end. If the government wants to take someone’s property, it should first be required to convict that person of a crime.”

Former Las Vegas Review-Journal editorial page editor John Kerr, now a communications fellow with IJ, penned one of those op-eds for the Las Vegas paper recently. He wrote:

“Many law enforcement officials defend the current forfeiture laws as an effective and valuable tool in the fight against crime. But the Bill of Rights wasn’t enshrined in the Constitution for the purpose of empowering the government over its citizens — quite the opposite. Laws that allow police to seize cash, jewelry, homes and other valuables solely on the hunch of illegal conduct mock the principles that enrich and define a free society — such as liberty, justice and property rights — if not paired with meaningful judicial review in which the state must prove both the suspect’s guilt and a link between crime and the property.”

In a 73-page article published in the Nevada Law Journal, David Pimentel, a law professor at Florida Coastal School of Law, laid out the case against civil forfeiture. Here is an excerpt:

“Given the dubious policies behind facilitating property forfeitures, and the due process problems inherent in carrying them out, the more potent question is whether facilitating property forfeitures should be allowed at all. If the taking of such property is to be justified, or even tolerated, it must be for the most compelling public policy purposes, none of which can be demonstrated for facilitating property forfeitures.”

Let’s hope SB138 breezes through the legislative process and becomes law.

Dashcam video of cash seizure: