Newspaper Column: Prevailing wage law change will cost taxpayers

A fool and his money are soon parted.

In Nevada those fools are the taxpayers who keep electing Democrat majorities to send to Carson City to pick their pockets.

Assembly Bill 154, sponsored by a raft of Democrats, would roll back the minor headway made just two years ago 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.

AB154 would require that contractors doing any university or public school work exceeding $100,000 pay prevailing wage, down from the current $250,00. It also requires the full prevailing wage instead of the current 90 percent.

Las Vegas Democratic Assemblyman Chris Brooks, chief sponsor of the bill, testified before the Assembly Government Affairs Committee recently and actually claimed the bill would save money.

“Research shows that prevailing wage laws lead to more workforce training, a more educated and experienced workforce, safer construction and government savings because workers depend less on social programs,” Brooks said. “Prevailing wage laws are better for the economy because they support the middle-class incomes that boost consumer spending. Eliminating the prevailing wage does not save money and can actually cost more money.”

Warren Hardy of the Associated Builders and Contractors contested this allegation of savings by pointing out that a contract for construction of a middle school in Clark County received a low bid of $2.7 million during a brief period a couple of years ago when the prevailing wage was dropped for schools, but when the prevailing wage was reinstated the low bid jumped to $3.6 million.

In 2000, A.D. Hopkins wrote a series of articles for the Las Vegas Review-Journal, outlining the profligacy of the prevailing wage law. One article stated: “Nevada’s prevailing wage law costs taxpayers about $2.3 million extra on every new public high school being built in Clark County, according to a database analysis by the Review-Journal.”

In 2012, Geoffrey Lawrence penned a column for the Nevada Policy Research Institute website on Nevada’s expensive prevailing wage law. He noted how a plumber in Mesquite might expect to be paid less than $20 an hour for most jobs, but, if it is a public works project by a state or local government entity, that same plumber would be paid, by law, more than $70 an hour.

Lawrence’s piece pointed out that an NPRI analysis estimated that prevailing wage requirements cost Nevada taxpayers nearly $1 billion extra over 2009 and 2010. The state’s biennial general fund budget is less than $7 billion. “That’s why prevailing wage reform needs to be at the top of the agenda for the Nevada Legislature in 2013,” Lawrence wrote.

NPRI in its “Solutions 2015” handbook estimated the law required the state, cities, counties, school districts and other government entities to pay 45 percent higher wages than necessary — a cost to taxpayers of $1 billion a year.

For a little historical perspective, the prevailing wage law is a vestige of the Jim Crow era and is modeled on the Davis-Bacon Act of 1931 that was expressly intended to keep cheaper Southern black laborers from getting jobs on public works projects.

The discriminatory nature of prevailing wages persists to this day.

Hardy of the Associated Builders and Contractors said during testimony on the bill that his organization does not have a problem with federal prevailing wage law but does object to the way the wage is calculated in Nevada, which results in unions setting the prevailing wage.

“The overwhelming majority of small businesses, the overwhelming majority of minority-owned businesses, the overwhelming majority of women-owned businesses are non-union,” Hardy said. “These folks are not union contractors. So what you’re saying is, we need to build laws, which is what the prevailing law does in this state quite frankly, to incent the hiring of union contractors. That disenfranchises small businesses, women- and minority-owned businesses because they are overwhelmingly nonunion contractors.”

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.

Newspaper column: Why separation of powers must be enforced in Nevada

Assembly Bill 121 is Exhibit A in the case for finally enforcing the state constitutional mandate for separation of powers, such that each branch of government may provide checks and balances to prevent the abuse that results when power is concentrated in too few hands.

The bill — introduced in Carson City by Democratic Las Vegas Assemblyman Steve Yeager — would wipe out much of the progress made in 2015 in public employee collective bargaining reforms.

Yeager, who also happens to be a Clark County public employee, would erase a provision in the law that prohibits paying union officials from public coffers for time spent doing union business. It also negates a provision blocking pay increases after a union contract has expired and before a new one is inked. It further requires any new contract to be retroactive to the expiration date of the previous contract — greatly reducing incentives for union members to accept a lower offer.

State Sen. Heidi Gansert sits in the Legislature. (R-J pix)

State Sen. Heidi Gansert sits in the Legislature. (R-J pix)

The bill is redistributionism. Taking from the taxpayers to line the pockets of public employee union members.

Yeager is employed by the Clark County Public Defenders Office, whose union contract expires in June.

The state of Nevada operates under the Dillon Rule, which limits the power of local governments to those expressly granted by the Legislature, meaning local governments are basically subsidiaries of the state and employees of those local governments, such as Yeager, essentially are serving in the executive branch of state government.

Which brings us to Article 3 of the Nevada Constitution, which states: “The powers of the Government of the State of Nevada shall be divided into three separate departments, — the Legislative, — the Executive and the Judicial; and no persons charged with the exercise of powers properly belonging to one of these departments shall exercise any functions, appertaining to either of the others, except in the cases expressly directed or permitted in this constitution.”

Therefore, Yeager, while currently serving in the Legislature, is also a member of the executive branch and, since he works in the court system, he is an employee of the judicial branch — a triple threat!

Such ignoring of explicit requirements of the state Constitution has been ongoing for decades and currently there are several lawmakers whose day jobs are with a local government.

In 2011, the libertarian-leaning Nevada Policy Research Institute’s legal arm, the Center for Justice and Constitutional Litigation, filed suit against state Sen. Mo Denis because he also was an employee of the state Public Utilities Commission, and had been for 17 years.

Denis immediately resigned from his $56,000-a-year state job in order to maintain his part-time $10,000-every-other-year state senator post, and a judge declared the lawsuit moot.

A week ago CJCL filed a similar suit against state Sen. Heidi Gansert, who holds a $210,000-a-year in pay and benefits public relations job with the University of Nevada, Reno.

 “Gansert’s continued employment in the state’s executive branch, as Executive Director of External Relations for the University of Nevada, Reno, puts her in direct violation of Nevada’s Separation of Powers clause, now that she is also serving in the state senate,” CJCL Director Joseph Becker said in a press release reporting on the litigation. “As a senator, she can simply not continue her employment in the executive branch without violating this clearly worded constitutional provision.”

In a statement Gansert called the suit meritless and said, “Nevada has an unambiguous precedent of legislators taking time off from their jobs in higher education to serve the people of the state.”

Of the unambiguous Separation of Powers clause, Becker said it was designed to preserve the independence and integrity of each branch, and having a legislator make decisions that might directly benefit employees of another branch creates a clear conflict of interest.

As witness AB121.

Thomas Jefferson wrote in “Notes on the State of Virginia” in 1784: “All the powers of government, legislative, executive, and judiciary, result to the legislative body. The concentrating these in the same hands is precisely the definition of despotic government. … An elective despotism was not the government we fought for; but one which should not only be founded on free principles, but in which the powers of government should be so divided and balanced among several bodies of magistracy, as that no one could transcend their legal limits, without being effectually checked and restrained by the others.”

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.

Newspaper column: Retirement system officials should respect transparency

What do you do with a rogue government agency that spends billions in taxpayer dollars but constantly dissembles, denies, deceives, dodges and dithers to avoid public scrutiny and does so by spending still more taxpayer money?

For years the Nevada Public Employees’ Retirement System (PERS) has attempted to conceal from the public any specifics about the amount of public funds that are being doled out to retired public employees. PERS spends more than $1.5 billion a year on pensions and by standard accounting methods has an unfunded liability of at least $40 billion.

In 2011 in a suit filed by the Reno Gazette-Journal newspaper Carson City District Court Judge James Russell ruled PERS records — including the name of a retiree, the amount of retirement payment, name of the agency where the retiree worked and hire and retirement dates — were subject to public inspection under the state public records law.

PERS officials appealed to the state Supreme Court, which ruled in 2013 that such records are indeed public, but the agency was not required to “create” a record it did not already maintain.

Some PERS records were released and the Nevada Policy Research Institute posted that information on its TransparentNevada.com website.

In 2015, after the judge in the Reno newspaper case chastised PERS for “stonewalling” and possible lack of “truthfulness,” PERS lobbied the Legislature to specifically exempt its records from the public records law.

When that failed PERS altered its recordkeeping procedures so that records were filed by Social Security numbers only and without a name attached. Social Security numbers are “non-disclosable” by law.

NPRI filed suit.

“By replacing names with ‘non-disclosable’ Social Security numbers in its actuarial record-keeping documents, PERS has attempted to circumvent the 2013 ruling of the Nevada Supreme Court requiring disclosure,” explained Joseph Becker, the director of NPRI’s Center for Justice and Constitutional Litigation, at the time of the suit.

This past week another Carson City judge again slapped down PERS for refusing to release the names and pensions of its 57,000 public employee retirees under the state public records law.

District Judge James Wilson chastised the agency for being deceptive, noting that the law “does not require an agency to create a public record, but neither does it bar an agency from creating a record. PERS quoted in part Nevada Public Records Act: A Manual for State Agencies 2014 which states in part: ‘An agency is not required to organize data to create a record that doesn’t exist at the time of the request.’ The part PERS left out from that sentence in the Manual is: ‘but may do so at the discretion of the agency if doing so is reasonable.’ PERS failure to indicate it was quoting only part of the sentence seems a bit deceptive.”

Judge Wilson further noted that the state Supreme Court has since ruled in another case that “when an agency has a computer program that can readily compile the requested information, the agency is not excused from its duty to produce and disclose that information.”

He also dismissed as “hypothetical and speculative” claims that disclosure might subject retirees to cybercrime, noting that the opinions buoying this argument were based on releasing data such as gender, birth date and address, which were never requested.

NPRI’s attorney Becker said in a statement, “NPRI is delighted that the court has once again weighed in strongly on the side of transparency, and once again with respect to PERS. As evidenced by the recent lawsuits against the agency, the courts need to crack down on government entities, such as PERS, that thumb their noses at the Nevada Public Records Act’s requirements for disclosure.”

He noted that the court seemed especially sensitive to the fact PERS officials had changed their recordkeeping methodology in an effort to circumvent the Supreme Court ruling.

Not only did PERS spend tax money to fight the current lawsuit, it now must spend more tax money to pay attorney fees and costs to NPRI.

There are several vacancies coming up on the PERS board this year. We encourage Gov. Brian Sandoval to use this opportunity to appoint members who abide by the letter of the law and respect the public’s right to transparency in how its money is being spent.

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.

Update: On Tuesday the PERS board voted unanimously to appeal this court decision.

 

PERS wasting time and money with public records appeal

The board of the Public Employees’ Retirement System voted unanimously Tuesday to continue its stonewalling of the public’s access to its records, according to the Las Vegas newspaper.

Nevada Policy Research Institute sued PERS back in July for again refusing to release records showing the names of pensioners and the amounts of their pension. The Reno newspaper sued for those records in 2013 and won in the state Supreme Court, which found the records are clearly covered under the state public records law.

But PERS, after releasing some records as required by law, changed its recordkeeping practices conceal the names of pensioners by filing information under non-disclosable Social Security numbers instead of names, clearly a ruse to dodge the court’s ruling.

Today’s paper quoted the board’s attorney as saying the state Supreme Court should provide “black and white guidance” on how to balance confidentiality statutes and public information.

That court has already done so. In black and white.

This past week District Court Judge James Wilson spelled out clearly his rationale to requiring the records to revealed:

Considering the purpose of the NPRA (Nevada Public Records Act), to foster democratic principles by providing member of the public with access to public books and records; the legislative mandate that courts construe the NPRA liberally to carry out this important purpose; the legislative mandate that any exemption, exception or balancing of interests which limits or restricts access to public books and records by members of the public must be construe3d narrowly; the lack of evidence that producing the requested information, retiree name, years of service credit, gross pension benefit amount, year of retirement, and last employer would require unreasonable demands or costs or PERS; the fact that PERS altered its procedure in providing information to its actuary to eliminate the names of retirees in part because of the Reno Newspapers decision, the court concludes that PERS does have a duty to create a document that contains the requested information. (npri-v-pers-ruling)

 

PERS is wasting time and taxpayer dollars in a futile gesture, because in 2015, two years after the Reno newspaper ruling, the high court decided: “When an agency has a computer program that can readily compile the requested information, the agency is not excused from its duty to produce and disclose that information.

 

Gift Clause case is shunted by judge

A Carson City judge has dismissed on a technicality a lawsuit challenging as unconstitutional the governor’s so-called Catalyst Fund, which has doled out nearly $20 million in recent years to companies that promise to hire workers.

The suit was brought by Michael Little, owner of a company that converts recycled landscape trimmings into biomass, a renewable energy source. It claimed a $1.2 million handout to competitor SolarCity, which at the time installed solar panels on rooftop, violated the Gift Clause of the state Constitution, which prohibits the state donating or loaning money to any company. SolarCity has since pulled out of the state due to an adverse ruling by the Public Utilities Commission making that business unprofitable.

Little is represented by the Center for Justice and Constitutional Litigation (CJCL), a division of the Nevada Policy Research Institute.

The Nevada Appeal reports the judge dismissed the case because CJCL failed to add Clark County and SolarCity as parties to the case as he had instructed.

But CJCL attorney Joseph Becker told the judge SolarCity was not added because it has left the state. What happens next is unclear.

 

Plaintiff Michael Little

The Nevada Constitution specifically states: “The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.” Voters have three times rejected amendments that would have removed the Gift Clause.

 

Becker explained in an interview a year ago that CJCL is in the business of trying to set precedent that serves the public interest.

Gift clauses started appearing in state constitutions in the mid-1800s after state governments in the East invested heavily in private companies building infrastructure such as canals and railroads that went bust. The states of Indiana, Illinois and Michigan were bankrupted as a result.

“We needed a vote of the people to change the Constitution, which never happened, but now suddenly its OK for the state to do something that up until now, even they insisted, would take a constitutional amendment,” Becker said earlier.

Newspaper column: Lawmakers must finally address public worker retirement reform

Gov. Sandoval gives State of the State speech. (R-J photo)

Gov. Sandoval gives State of the State speech. (R-J photo)

In his State of the State speech this past week Gov. Brian Sandoval tossed out tax money like trinkets and candy from a Mardi Gras parade float — a couple million here for this or that education program, a few million there for a veterans’ home, millions for a medical school, more millions for an engineering school and pay raises for state employees.

“This session, my budget includes a 4 percent cost of living adjustment and increased funding for health benefits to recognize the shared sacrifice and dedication of our state employees,” the smiling governor said about his spending proposal for the coming two years.

Overall, Sandoval proposed a 10 percent increase in the general fund portion of the state budget, even though the cost of living increase for 2016 was only 2 percent.

What the governor did not address was how the taxpayers are going to pay for the commensurately higher retirement pensions that are tied to the salaries of those state employees.

Nor did he take note of the fact his proposed budget — total budget, not just the general fund — is 49 percent higher than the total budget he proposed when he first took office, while over the past decade the Nevada median household income has fallen 17 percent.

A part of the growth in state government spending has been due to burgeoning pensions for state employees, who upon retirement are guaranteed a percentage of their highest salary level — which officially is 70 percent after 25 years, but can often top 100 percent after various pay add-ons and gimmicks are employed. Public employees in Nevada can retire in their 40s and get paid more in retirement than they were paid for actually working.

In 2008 the Las Vegas Chamber of Commerce called on the Legislature to change public employee retirement benefits from the current direct benefit plan to a direct contribution plan, similar to a 401(k), because the expenditures were growing at an unsustainable pace.

In 2011 a report drafted for the Nevada Policy Research Institute by Andrew Biggs, an economist with the American Enterprise Institute, concluded the Nevada Public Employees’ Retirement System is vastly underfunded by more than $40 billion.

“What people don’t realize,” Biggs said to a luncheon audience back then, “is your typical public sector pension plan is a lot more generous than what a typical person is going to get in the private sector. Let’s just take a person and run their wages through what they would get from PERS versus what they could get from a typical 401(k) plan combined with Social Security, because public employees here don’t participate in Social Security. They both pay the same amount on average. The total contribution is about the same, but the benefits for someone under PERS — for a full career employee — is somewhere around 50 percent higher.”

In 2015 Reno Republican Assemblyman Randy Kirner introduced Assembly Bill 190, which called for reforming PERS, which at the time was costing nearly $15,000 per Nevadan per year and growing.

The changes Kirner proposed would have applied to future state and local government workers and not current ones.

AB190 would have introduced a hybrid — part defined benefit, part defined contribution.

The bill also tied the minimum retirement age for receiving full benefits to that allowed under Social Security, though police officers and firefighters would be able to retire with full benefits 10 years earlier.

Kirner argued his bill would have a minimal impact on taxpayers, but the PERS administration claimed it would cost millions to implement. Kirner withdrew the bill so the funding could be studied and he could re-introduce it again this year, but Kirner decided to not seek re-election.

Instead, state Controller Ron Knecht has offered a bill nearly identical to Kirner’s, but it is questionable whether it will get much of a hearing before a Legislature that is now comprised of majority Democrats in both chambers.

This past summer NPRI’s Director of Transparency Research Robert Fellner released a 36-page report warning that if the economy stumbles the PERS “fantasy economic forecasts will be replaced by immediate bankruptcy — leaving every Silver State household with a sudden, implicit, $50,000-plus tax liability.”

Nevada lawmakers have been kicking this can down the road so long it is now a 55-gallon drum ready to explode.

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.

Judge again slaps down PERS for trying to hide retirement records from the public

A Carson City judge has slapped down the Nevada Public Employees’ Retirement System for refusing to release the names and pensions of 57,000 public retirees under the state public records law, according to The AP.

The Nevada Policy Research Institute sued PERS back in July for again refusing to release those records. The Reno newspaper successfully sued for those records in 2013.

District Judge James Wilson ruled Tuesday that the PERS claim that making these names public would subject the retirees to cybercrime was “hypothetical and speculative.”

After the 2013 ruling, PERS altered the way it kept records, claiming it only had records filed by using Social Security numbers, which are “non-disclosable” by law.

”By replacing names with ‘non-disclosable’ social security numbers in its actuarial record-keeping documents, PERS has attempted to circumvent the 2013 ruling of the Nevada Supreme Court requiring disclosure,” explained Joseph Becker, the director of NPRI’s Center for Justice and Constitutional Litigation at the time of the suit.

In 2015 NPRI requested retirement records to include on its TransparentNevada.com website — a free resource for public-sector administrators and taxpayers interested in learning about the cost of public sector compensation.

The lawsuit itself argued the information was clearly subject to the public records law, which was intended to “foster democratic principles by providing members of the public with access to inspect and copy public books and records.”
Additionally, the suit noted that in 2015 state Supreme Court ruled: “When an agency has a computer program that can readily compile the requested information, the agency is not excused from its duty to produce and disclose that information.

“Despite having the clear ability to provide the public with useful and complete records, PERS has deliberately subverted transparency by altering its record keeping, and refusing repeated requests for full disclosure,” NPRI and CJCL noted at the time.