Editorial: State budget could use some belt tightening

The members of the Nevada Economic Forum met earlier this month and came up with a forecast for how much the total state general fund revenues will be for the next two years.

The Economic Forum was created by lawmakers in 1993. It is responsible for providing forecasts of revenues for each upcoming biennial budget period. The figures are binding on the governor and the Legislature in crafting a budget, so they don’t wildly overestimate potential revenue and cause a budget crisis when funds come up short.

The forum members reported that the past two-year’s revenues turned out to be $8.244 billion and the coming two-year period should generate 7.2 percent more funds or $8.835 billion, after application of all applicable tax credits, of which there are a number.

Outgoing Republican Gov. Brain Sandoval has already drafted a budget for the next biennium, which will be handed over to incoming Democratic Gov. Steve Sisolak and the majority Democratic lawmakers, who take office in January. Of course, they all appear to anticipate spending every last dime of that $591 million windfall even though current inflation is running only 2.5 percent.

Much of the anticipated money is being targeted for expanded Medicaid under ObamaCare and various education spending schemes.

After the Economic Forum issued its forecast, Sisolak gave a statement to the press saying, “I am encouraged by how the state is performing. I look forward to reviewing the final forecast released by the Economic Forum and creating a roadmap to implement the priorities that matter to Nevadans. I am committed to building a bright future for our state and that starts with building a budget that funds the initiatives that will get us there.”

May we be so brazen as to suggest that taxpayers might appreciate an “initiative” that lets them keep a bit more of their paychecks. Or at the very least pour more of that anticipated-but-not-guaranteed revenue into the rainy day savings account for that time in the future when the outlook is not so rosy, because everyone knows that once government spends a certain amount of money it expects to continue to do so in perpetuity.

For the record, from 2011 to 2017 the state general fund budget grew by 32.3 percent, while inflation amounted to 7.9 percent.

Though we know we are whistling in the Democratic wind, we also suggest that the burdensome commerce tax passed in 2015 as part of Sandoval’s $1.5 billion tax hike be repealed. The tax was imposed even though the voters in November 2014 rejected a commerce tax at the ballot box by 79 percent to 21 percent. The commerce tax is expected to generate only $445 million in the coming biennium and could be covered by that extra $591 million in the projection.

Every Nevada business must file a commerce tax form with the state, even if the business owes no tax. For many, compliance costs exceed the taxes owed. That is a hidden tax on the state economy and retards job growth.

Lawmakers should think about the burden on taxpayers as well as the beneficiaries of their customarily spendthrift ways.

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

Newspaper column: Whither renewable power after wind farm rejected?

Wee Thump Joshua Tree Wilderness Area, with Crescent Peak in the background. (Basin and Range Watch pix)

The Bureau of Land Management has rejected a bid by a Swedish firm to construct a mammoth wind turbine project on the Nevada side of the border with California near Searchlight.

The Crescent Peak Wind Project was to have covered 32,000 acres of public land with as many as 220 wind turbines standing 400 to 600 feet tall and generating 500 megawatts of power. The proposed site is adjacent to the Mojave National Preserve and the Castle Mountain National Monument in California and the Wee Thump Joshua Tree Wilderness and the South McCullough Wilderness in Nevada.

While the vast majority of the arguments against the project were based on probable environmental and ecosystem damages, some of the reasons given by the Nevada office of the BLM for denial were actually ones about economics and, perhaps most importantly, air traffic safety.

While the land agency said the project did not conform with the area resource management plan, it also cited other concerns. “These issues include that access to the turbines would potentially affect the development of more than 300 mining claims; the turbines could interfere with radar at two regional air facilities — one military and one civilian; and impacts to the visual landscape,” said Nevada BLM in a statement obtained by Basin and Range Watch.

Such air facilities include McCarran International Airport, a gateway to Clark County’s profitable, job-generating gambling resorts, and Nellis Air Force Base, a key element in the nation’s air defense training that includes air combat and bombing practice ranges that cover a vast swath of central Nevada.

The original denial letter, from the assistant secretary of the Interior Department, also obtained by Basin and Range, mentioned the potential for “a significant threat to military operations” at China Lake Naval Air base 150 miles away in California.

If such turbines can’t be located within 150 miles of such air facilities, where in Nevada, with all its commercial and military aircraft activity, can they be sited?

Dr. Donald Deever of Searchlight warned of just this problem in his 43-page public comment submitted to the BLM in June. He wrote: “As further proof of the devastating frequencies emitted by industrial wind turbines, something that isn’t common knowledge is that in the early years of the first term of President Obama, a feasibility study was commissioned to look into the possibility of transforming the Nevada Testing Site into the world’s largest photovoltaic solar energy plant. Unfortunately, the proposed project was diverted by Senator Harry Reid, who replaced the idea of solar panels with industrial wind turbines. Although Congress approved the project, it was immediately shut down when government engineers and researchers at Area 51 let the President and Pentagon know that the frequencies emitted by industrial wind turbines would completely interfere with America’s advanced stealth technology tests. If the frequencies of industrial wind turbines could overwhelm the circuitry of our country’s most modern stealth circuitry, one can only imagine how much damage it can do to the even more delicate biological systems of all migrating birds, whom scientists now know rely on magnetic fields to accomplish their annual migrations.”

Such limitations on the siting of wind farms near air traffic corridors might have an impact on the implementation of Question 6, should voters approve the proposition again in two years. In November, 59 percent of the Nevada voters approved a change in the state law that currently requires 25 percent of the state’s electric power to come from renewable generation sources such as wind and solar by 2025. Question 6 upped the ratio to 50 percent by 2030, no matter the cost and practicality or whether carbon emissions are actually reduced.

It should be noted that Question 6 passed in only three counties — Clark, Washoe and Mineral. It failed in every other county by wide margins.

Wind and solar eyesores gobble huge tracts of land and the most likely candidates for such projects are generally cheap federal public land, primarily found in rural counties.

Only 22 percent of voters in Lincoln County approved of Question 6, only 26 percent in Eureka, 29 percent in White Pine and Esmeralda and 32 percent in Elko, for example.

Clark County, the site of the rejected Crescent Peak Wind Project, saw 64 percent voter approval.

It will be hard to generate 50 percent of the state’s electricity with solar power, since the sun shines only half the day.

A version of this column appeared this week in many of 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.

 

Editorial: Supreme Court should limit civil asset forfeitures 

The U.S. Supreme Court finally has taken up a case that could result in the reining in of the larcenous practice by local and federal law enforcement agencies of seizing private property to pad their budgets.

This past week the court heard arguments in the case of Timbs v. Indiana. Tyson Timbs was caught in a police sting selling heroin, and during one of his transactions he was driving a $42,000 Land Rover, which the police seized.

Timbs’ attorney argued the seizure of the expensive vehicle was a violation of the Eighth Amendment prohibition against excessive fines and punishment. 

The Indiana Supreme Court held that the excessive-fines clause doesn’t apply to states, according to a Wall Street Journal account, which is dubious since the 14th Amendment declared, “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States …” which are spelled out in the Bill of Rights. 

The attorney for Indiana also argued that the seizure was an “in rem” asset forfeiture, meaning the property was guilty of a crime and therefore its value was not subject to the proportionality of any fine.

This caused Justice Stephen Breyer to speculate, “So what is to happen

if a state needing revenue says anyone who speeds has to forfeit the Bugatti, Mercedes, or a special Ferrari or even jalopy? (Laughter.)” — even if the speed limit were exceeded by only five miles an hour.

The state attorney’s quick reply was, “Yes, it’s forfeitable.”

Chief Justice John Roberts seemed to concede that there is difference between a fine and the seizing of guilty property, saying, “And I certainly understand the argument that the disproportion and excessiveness arguments would be quite different with respect to forfeiting the instrumentalities of the crime.  I mean, an argument could be made, well, that’s always proportionate since it’s the way the crime is accomplished.”

But Timbs’ attorney argued the seizure still constitutes a fine.

Yes, it is a distinction without any practicable difference. The person is still deprived of valuable property, which arguably is prohibited by the Eighth Amendment.

This case is not academic for Nevada. There have been a number of asset forfeitures that appeared to exceed the excessive-fine clause prohibition. Over a two-year period Humboldt County deputies alone seized $180,000 in cash from motorists, though some were never convicted of a crime.

Police in Elko County confiscated $167,000 in cash from a man driving a motor home after a drug dog “alerted,” though no drugs were found and no charges were ever filed.

Let’s pray the U.S. Supreme Court sees fit to require law enforcement to abide by the Bill of Rights from now on.

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

Tyson Timbs (AP pix via WSJ)

Editorial: Repeal of IRS deductions for state and local taxes unfair to Nevada

Now that Democrats — who have made a career out of demanding soak-the-rich taxes in order to redistribute it to the poor — are in control of the U.S. House of Representatives, one of their first priorities will be to provide a tax break for the rich — in certain Democrat-controlled states.

According to Forbes magazine and others, a top priority will be a repeal of the $10,000 cap on IRS deductions for state and local taxes (SALT) that was part of the Tax Cuts and Jobs Act passed in December 2017.

According to the Tax Policy Center, three-quarters of any benefit from repealing the SALT deduction cap would go to households making $153,000 or more. The top 1 percent of households, those making $755,000 or more, would receive more than 56 percent of the benefit. The Center calculated repeal would cut federal tax revenues by $620 billion over the coming decade.

The Tax Foundation says 88 percent of the benefits of a repeal would flow to those making more than $100,000 a year.

So a repeal benefits the rich, but just the rich in certain states.

Nevadans — along with residents of New Hampshire, Florida, Wyoming, Texas, South Dakota and Alaska — used to be able to deduct about 1 percent or less of their adjusted gross income, while those who live in New York, Maryland, D.C. and California could deduct more than 5 percent.

Nearly one-third of the additional tax dollars generated by the SALT cap comes from Californians and New Yorkers, both heavily Democratic states.

Using 2010 statistical data from the IRS, the latest available, you find Californians who filed for state and local income tax deductions claimed deductions of $10,700 per return.

Nevadans who filed for the state and local sales tax deduction claimed only $1,430 per return.

Calculated on a per capita basis, Californians claimed $2,116 in federal income tax deductions, while Nevadans claimed only $166 per person for sales tax deductions.

Tax fairness? Not hardly.

Sounds like Nevadans would again be paying a disproportionately higher proportion of federal taxes if the SALT cap is repealed.

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

Newspaper column: Coming legislative session could resurrect some awful bills

With the election of Democratic majorities in both the state Assembly and Senate, many fear that, as Yogi Berra once said, it’s going to be deja vu all over again.

The 2019 session of the Legislature could resurrect many of the bills that Republican Gov. Brian Sandoval vetoed in 2017 — 41 in all, and he is considered a moderate Republican — because this time around the governor wielding the veto pen, or not, will be Democrat Steve Sisolak.

Take 2017’s Assembly Bill 154, which was sponsored by a raft of Democrats. But for Sandoval’s veto, the bill would have rolled back the minor headway made just two years earlier to cut the cost of public works. It would raise the cost of construction of university and public school buildings by reimposing the so-called prevailing wage on more projects.

Prevailing wage laws require that workers on public construction jobs to be paid no less than the “prevailing” wage in the area where the work is being done. The wage rate is set by the state Labor Commissioner based on a survey of contractors. The survey is so time consuming that in reality only union shops bother to comply, meaning the prevailing wage is the highest union wage.

In 2000, a study by the Las Vegas newspaper found the prevailing wage law cost taxpayers about $2.3 million extra on every new public high school being built in Clark County.

Then there is Senate Bill 106, which would have raised the minimum wage employers must pay workers. Currently the minimum is $7.25 and hour for workers whose benefits include health insurance and $8.25 for those who do not.

SB106 would have raised that by 75 cents a year until it reached $11 an hour for the insured and $12 for the uninsured. Sisolak has supported incremental increases in the minimum wage, though study after study has shown such requirements eliminate jobs and cause reduced hours for the remaining workers.

A 2017 University of Washington study of Seattle’s minimum wage, which was raised to $13 an hour, found the increase boosted hourly earnings in the jobs affected by a paltry 3 percent, and reduced hours worked by 9 percent. They also found the city would have had 5,000 more jobs if the minimum wages had not been increased.

Assembly Bill 374 from 2017 would have allowed any Nevadan to purchase Medicaid-like health insurance through the state exchange even if they are not eligible for Medicaid. In his veto message Sandoval said the measure would have created uncertainty in an already fragile health care market. He said the bill could have caused longer waits for care and fewer available doctors.

Senate Bill 196 would have required employers with at least 25 employees to provide workers with paid sick leave. Sandoval expressed concerns about the impact on small businesses.

Senate Bill 384 would have done legislatively what the Nevada Public Employees’ Retirement System has been trying unsuccessfully to get the courts to do for years. It would have declared all information about state and local government retirees confidential under the law.

Just this past month the Nevada Supreme Court, in a case brought by the Nevada Policy Research Institute, declared the names and pension amounts of retired public employees are indeed public records under the current law.

Nevada’s public employee pensions are the richest in the nation — $64,000 a year or more than $1.3 million in lifetime benefits, and that doesn’t include public-safety workers, such as firefighters and police, who can retire earlier and generally have higher salaries, especially in Nevada. Compare this to the average annual Social Security benefit of $16,000.

According to NPRI’s transparentnevada.com, in 2015 there were more than 1,500 Nevada state and local retirees receiving annual pensions in excess of $100,000. A revival of SB384 would keep that a secret from those whose taxes cover the expense.

Keep your eyes on this upcoming session in Carson City. It could bode very poorly for employers, workers and taxpayers.

A version of this column appeared this week in many of 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.

Nevada Legislature building (R-J pix)

Editorial: PERS reform needed to curb ever higher costs

The PERS cost creep continues.

Earlier this month the board of directors of the Nevada Public Employees’ Retirement System authorized an increase in the amount state and local public employees and their employers — read: taxpayers — must contribute to cover pension costs.

That means, starting next July 1, for regular PERS members — teachers and other government workers — the amount of each paycheck that must be paid into the pension account will increase from 28 percent to 29.25 percent. Half of that amount comes from the worker and half from the taxpayers. Since the average public employee salary should be almost $53,000 a year by then, each worker would need to kick in on average another $330 or so a year to be matched from tax funds. (November 2018-Board Book)

Police and firefighters, who tend to have shorter careers, are assessed a higher amount. Their contributions will increase from 40.5 percent to 42.5 percent. Since the average pay should be more than $79,000 that means an almost $800 increase to be chipped in by each cop and firefighter, also matched with tax money. 

Expect those government workers to bemoan the pay check cut — even though their benefits contributions are being increased — and run crying to the Legislature to demand more money. 

The Nevada government worker retirement system, unlike anything found in the private sector, is based on a defined benefit plan, meaning pensions are calculated as a percentage of the highest pay the worker receives at the end of his or her career times the number of years worked. 

According to the American Enterprise Institute, the average Nevada public employee pension is $64,000 a year, while the average Social Security annual benefit is $16,000. Nevada Policy Research Institute has posted at its TransparentNevada.com website a list of pensions paid in 2015. This includes more than 1,500 public employee pensioners drawing more than $100,000 a year.

The cost of these pensions have skyrocketed over the years.

Victor Joecks, a columnist for the Las Vegas newspaper, points out, “Nevada has been increasing contribution rates for decades to pay off unfunded pension liabilities. When PERS started in 1948, the contribution rate was 10 percent for all employees on their first $400 in earnings. In 2003, it was 18.75 percent for regular employees and 28.5 percent for police and fire. Next year’s rates are 56 percent higher for regular employees and a 49 percent increase for police and fire compared to 2003.”

Joecks calculates that if teachers contributed at the same rate they did in 2003 their take-home pay would be $2,800 more a year.

The system has an unfunded liability of more than $40 billion when one uses generally accepted accounting principles. That’s more than $53,000 per Nevada household.

It is long past time that the state change its ever more costly pension program from the defined-benefit plan to a defined-contribution plan, similar to the 401(k) plans used by corporations. The worker and the employer each contribute a set amount of the salary and the money is invested until the worker cashes out.

There actually was a bill introduced in the 2013 legislative session that would have done this. The bill garnered no discussion and no vote was ever taken. It died without a whimper in the Assembly Ways and Means Committee.

One day the PERS balloon will burst. We call on lawmakers to act now.

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

Newspaper column: We should be thankful for capitalism

Thanksgiving is rich in traditions. The turkey. The dressing. The pumpkin pie. The family assembled in prayerful reverence in remembrance of the plight of the early settlers of this country — much of which is complete fiction.

The Plymouth colonists set out to live in an idealistic communal fashion. Everyone would share equally in the products of the colony. But after nearly starving to death in 1621 and 1622, Gov. William Bradford abandoned the social experiment and gave each family its own plot of land, and whatever was produced on it was the rightful property of the owner to consume or trade.

The result was a prosperous harvest in 1623 followed by a feast of Thanksgiving.

Capitalism saved the colony. Now, there was a harvest celebration by the pilgrims and some Indian friends in 1621, but they never actually called it “Thanksgiving.”

The American Institute of Economic Research a decade ago posted online its own retelling of the Thanksgiving story, along with passages from Bradford’s recollections from “Of Plymouth Plantation,” translated into more modern spelling.

The AIER notes that the colony was attempting to live in the manner described in Plato’s Republic in which all would work and share goods in common, ridding themselves of selfishness and achieving higher social state. The problem was that hard work was not rewarded and laggardness and sloth went unpunished.

Bradford wrote: “For the young men that were able and fit for labor and service did repine that they should spend their time and strength to work for other men’s wives and children, without recompense. The strong, or men of parts, had no more division of food, clothes, etc. then he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labor, and food, clothes, etc. with the meaner and younger sort, thought it some indignant and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc. they deemed it a kind of slavery, neither could man husbands brook it.”

Before the colony could die off from starvation, Bradford divvied up the land and introduced private property.

The governor wrote: “And so assigned to every family a parcel of land, according to the proportion of their number for that end. … This had a very good success; for it made all hands very industrious, so as much more corn was planted then otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little-ones with them to set corn, which before would a ledge weakness, and inability; whom to have compelled would have been thought great tyranny and oppression.”

And the result was, again in Bradford’s words: “By this time harvest was come, and instead of famine, now God gave them plenty, and the face of things was changed, to the rejoicing of the hearts of many, for which they blessed God. And the effect of their planting was well seen, for all had, one way or other, pretty well to bring the year about, and some of the abler sort and more industrious had to spare, and sell to others, so as any general want or famine hath not been amongst them since to this day.”

This is the real lesson of the first Thanksgiving: Capitalism always triumphs over communist utopian fantasies. Humans will work for their own self interest and, instead of it being greedy and rapacious, all benefit and prosper.

Yet in August, a Fox News poll asked whether the U.S. should move away from capitalism and toward socialism. Fully 36 percent of registered voters said it would be a good thing, double the 18 percent who thought this in 2010. Only 51 percent said it would be bad, down from 69 percent earlier. 

When will they ever learn? As someone once said, those who do not remember history are doomed …

A version of this column appeared this week in many of 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.