What Policy Solutions Should We be Focused On in the Year Ahead?

Geoff Lawrence: You know, a continual drive for Democrats, in Nevada at least, is to expand the influence of public sector unions, not the least of which is because those unions also offer campaign support.

Michael Schaus: That’s just purely coincidental in short, right?
This is Free to Offend. I’m your host, Michael Schaus. Very happy to welcome Geoff Lawrence to the program.

Geoff Lawrence is the Director of Research for Nevada Policy. He’s been with Nevada Policy, on and off for forever it seems like. He’s also been in state government here in the state of Nevada, and he’s the Director of Research for the Reason Foundation.

So, Geoff, thank you so much for joining us today.

Geoff Lawrence: Thanks, Michael. Glad I could be here.

Michael Schaus: So, the reason why we had you on is because obviously 2023 is coming really quick. We’ve already, you know, seen the election happen. We know that the makeup of the legislature and, of course, we know who’s going to be governor.

So, the big question is what are lawmakers going to be talking about? And the nice thing about Nevada Policy is every legislative year, they put together this book called Solutions. Tell me a little bit what is this book called Solutions. Why is it important and, and how is it used throughout the session?

Geoff Lawrence: Yeah, so Solutions is kind of the playbook or policy platform for Nevada Policy. And it changes. So, we put out a new addition every two years ahead of the legislative cycle to try and anticipate things that may come up during legislative session.

And so, a lot of the kind of themes stay the same from year to year just because there’s not much change on some issues. But you know, it does evolve somewhat from iteration to iteration and the data is continually updated.

So, the way it’s structured is it has a short two-page entry on every topic of interest to state lawmakers. The primary audience is people who are, you know, newly elected or even incumbents going back to office so they can get familiar with major issues facing the legislature.

But it kind of provides one page of like annotated talking points with footnotes for further reading. And then each section concludes with one or more very specific recommendations that could be submitted directly as a bill draft request for a lawmaker. And then the second page is just charts and tables of supporting data which we update every two years.

Michael Schaus: Yeah, and the really cool thing about this is I’ve talked to a lot of lawmakers who have used it and really appreciate it because it’s basically a book full of one pagers. If you want to look at something, let’s say, the minimum wage, you can flip to that section and here’s on one side, you know, a bunch of data and kind of talking points. On the other side, you know, what would be our preferred legislative fix for it or what have you.

So, it’s really helpful. Now, with that in mind, what are some of the items in this book that you think are going to become kind of key issues in 2023, either in a good way or a bad way?

Geoff Lawrence: Well, you know, there’s a new section this year, which I think is particularly relevant, that deals and kind of piggybacks on something Nevada Policy’s worked on for a long time, which is separation of powers.
But also, it discusses the emergency power statute because I think we’ve seen over the last couple of years that there’s kind of a weakness in our separation of powers doctrine. That is, you know, one person can declare an emergency and basically assume all powers unto himself for an indefinite period of time, which would very clearly circumvent the way the Constitution was intended to you know, prevent the concentration of powers into a single person’s hand.

So, you know, we make recommendations that, you know, certainly there are emergency situations that come up that require action that faster than the legislature can produce, right? But there should be time limit on how long somebody can exercise emergency powers.

So, we recommend that you know, it should be limited to a matter of days until the legislature can approve a longer period of emergency. And then they should have to renew that every three months or so.

Michael Schaus: Yeah, and that was something we saw obviously during the pandemic. We saw this play out in real time and not just here, but all across the country. And it was really interesting to me how when the legislature finally met, nobody seemed to really want to take back power from the governor. There was kind of an institutional resistance there to say, “Hey, let’s put limitations on the governor’s executive authority.”

And I think maybe part of that was, or all of it was entirely political, where they were just saying, “Hey, we don’t want to bear the political price of deciding whether or not we should keep things shut down. So, let’s just give that to Sisolak.”

Do you think that kind of reform, putting a limit on executive power is going to be a difficult lift? Or do you think that it might be something now since the pandemic’s kind of behind us, that more people are going to look at, you know, with a serious eye?

Geoff Lawrence: Well, yeah, I think it would’ve been very difficult to pass this kind of reform in the middle of the pandemic. But certainly, the situation has changed in terms of, you know, the worst part of that now being behind us, but also the political reality in the state is very different.

Now we have an incoming Republican governor. I still have two chambers that are heavily Democratic. So conceivably the, you know, legislative leadership would not want to give unlimited power to the new governor. And that might make for exactly a dynamic that you would need to pass a change like that.

Michael Schaus: Yeah, I mean, let’s hope so, because that was something that, you know, we obviously at Nevada Policy talked about a lot during the emergency. It was just strange to see how one guy declares a state of emergency and then it just goes on in perpetuity. I’m assuming that there’s going to be some model language in the book as well, because I know that a couple of other states have already tackled this, right?

Geoff Lawrence: We kind of state exactly the parameters that we think should be encoded in the language. But we can always provide the model language. But later on, because you know, a lot of the sections do point to bills that have passed in other states have successfully addressed an issue. But this is kind of an emerging issue over the last couple of years, so it’s not clear yet which states have done it the best.

Michael Schaus: What are some of the other topics that you think we probably have to worry about? Because you know, I’m thinking we do have a very heavy Democrat legislature. Some of their worst impulses are going to be tempered by the fact that somebody from the opposing party is in the governor’s mansion.

But nonetheless, I’m expecting that some issues that are kind of near and dear to Nevada Policy’s heart are going to come up and not necessarily in a good way. I’m thinking specifically about the power of public sector unions in this state. They’re probably going to be pushing for some reforms of their own.

What do you see as some sections in this book that you’re going to want folks to pay attention to because you know that the solutions being proposed are probably going to be the wrong ones?

Geoff Lawrence: Yeah. So, you know, that’s a continual drive for Democrats in Nevada at least is to expand the influence of public sector unions. Not the least of which is because those unions also offer campaign support for the same office holders.

Michael Schaus: That’s just purely coincidental, I’m sure.

Geoff Lawrence: Right? But in my mind, it’s kind of a question of what is left to push for because most union groups in Nevada already have kind of the highest powers of coercion over local governments especially. Because there are parameters that, you know, you force the county commission or the city council to negotiate toward a collective bargaining agreement, which is required to do in good faith. And then even if you don’t come to an agreement, there is a forcible dispute resolution process, which is binding arbitration.

So, they’re basically guaranteed union contracts, which is the strongest language that exists in any state in the country. And that covers all local government employees. Now, the big change that was made about four years ago was the legislature and Governor Sisolak finally created collective bargaining powers for state government workers. State government had always been excluded from these provisions in the past.

However, the language that they crafted for state workers is not quite as strong as what currently leads us for local government workers because the governor basically has veto power over any union contract that is signed. So, he can say, “This contract doesn’t fit within the budget that I’ve created. And therefore, I’m sending it back to the agency and the bargaining unit to renegotiate.”

You know, a county commissioner, for instance, does not have that power, right? So, if I were in the legislature as a Democrat, I’m probably looking to give state government unions the same coercive powers that local government unions have.

Of course, you know, for those of us who appreciate limited government, the obvious problem here is that it takes the elected officials, who we all choose through the democratic process, kind of out of the policy making realm because the budget is determined largely by unions.

It doesn’t matter who you elect at that point because you know, it’s this special interest group or series of special interest groups that really control the decisions made at every level.

Michael Schaus: You know, I know something that we talked about in one of the previous Solutions books, and it seems like a minor reform, but it still strikes me as something that might work even with a Democrat majority. But pushing for greater transparency in those contract negotiations. Because right now that all happens behind closed doors. Forget having taxpayer representation there. You don’t even have a seat at a table to listen to what’s going on.

But, when we talked about that in the past, I know we did some polling or something and even union members are pretty supportive of it because they feel like they’re shut out of the contract negotiations.

Do you feel like there might be some opportunity there for, you know, moving forward on transparency when it comes to collect bargaining? Or do you think that, you know, that might still just be a little too much given the political makeup?

Geoff Lawrence: Well, you know, one would certainly hope so. I mean, transparency is an issue that at least in theory cuts across political lines. I mean, if you look at the federal Freedom of Information Act, it was a piece of legislation that Barack Obama was the primary sponsor of as a US Senator.

And certainly, there are several states that have mandatory collecting bargaining and the open meetings law applies to any negotiation session between the primary actors, right? Any document that changes hands between those actors is subject to an open records law.

Nevada is one of the only places actually where these things are completely conducted in secret. And union members themselves, as you mentioned, they’re right to be upset about this because union representation doesn’t always represent the interest of every employee, right?

It’s kind of a principal agent problem, right? The union leaders are operating their own kind of business where their primary interest is maximizing revenue, which means in their case, union dues because that’s where their own wages come from. And so, if they can negotiate more positions, for instance, into a union contract in lieu of like greater pay, that might not benefit the existing union members.

But it certainly benefits the union leadership because all of the dues are a flat rate that are paid by every person. So, if you can get more positions at lower pay, that’s greater benefit to the union itself and not necessarily the union members.

So, I think both taxpayers and the union members certainly would benefit from greater transparency.

Michael Schaus: And I think you’ve got an appetite for that with a lot of union members. I’m thinking specifically about teachers, because you look at a teacher in Clark County and they look around. Most teachers are not happy in Clark County right now. Like, there’s a reason why we’ve got thousands of, you know, teacher openings and nobody’s going there.

You know, you’d think at some point they would say, “Okay, I want to know exactly what happens in those contract negotiations. You know, is the union really looking out for me in that case?”

Geoff Lawrence: Yeah. And actually, that leads into another one of our solutions that we think actually has some likelihood of passing this year and that’s occupational licensing, reciprocity between states.

Michael Schaus: Oh, perfect.

Geoff Lawrence: This became a thing during the pandemic, particularly in medical field. So, Nevada, since 2020, has already joined with seven interstate compacts recognizing the occupational licenses granted in other states, all in different types of medical professions, like nurse practitioners, that kind of thing.

It’s a huge departure for public policy in Nevada in particular because Nevada’s always been one of the worst states for requiring these expensive licenses for anything you could possibly want to do.

Michael Schaus: Interior decorating is my best example. The idea that you need a license to do interior decorating in the states still floors me.

Geoff Lawrence: Oh yeah. And Nevada is one of three states that even licenses that occupation, and it requires like three years of training or something. It’s ridiculous.

Michael Schaus: Well, you really have to make sure you understand how, you know, chase lounges match drapes in order to do that job, I guess.

Geoff Lawrence: Yeah. But the teacher shortage applies directly to this because you know, teacher licensure is a little bit different in every state. And if a teacher moves here from, say, Tennessee, it may take them a year to get their license active in Nevada, whereas there’s really no clear evidence that Nevada’s occupational licensing for teachers is somehow superior to what exists in another state. Certainly, you wouldn’t judge that based on the outcomes of student performance in Nevada.

I think there’s a lot of merit to saying, “Look, we’re thousands of teachers short now in Clark County alone, and it makes sense to automatically recognize teaching credentials that are named in another state.”

Michael Schaus: Yeah. And it seems like it would be a natural thing to do. I mean, you know, as you pointed out, we’ve done this during the pandemic. You saw this happen kind of all over the place where people said, “Oh wow, we need nurses. Let’s make sure that, you know, if somebody’s registered nurse in say New York and they move to New Jersey, let’s make sure that they can actually do the work here. They don’t have to go through the whole process again.”

So, I think it makes a lot of sense. What’s being proposed in Solutions, is it specifically about teachers or are you guys talking, you know, a little bit more broadly? Like, hey, a lot of these occupational licenses, let’s open those up so that way folks who say, move here because their spouse is military, you know, don’t have to go through a whole new licensure regime in order to say braid hair.

Geoff Lawrence: Yeah, much more broadly. Ultimately, I don’t think that there should be occupational licenses for any occupation that doesn’t …Well, there, I mean, there are some cases. An MD where, you know, there’s a real danger of physical harm to someone if that occupation is practiced by someone who’s not knowledgeable, right?
But most of the things that we require licenses for in Nevada don’t meet those criteria. African hair braiding is one as you mentioned. Interior design, musical therapist, which is you know, someone who charges people to teach them how to dance or listen to music or compose music. That’s something that we license in Nevada that I don’t think anyone else does, right?

And we recommend an ALEC model bill that would kind of repeal most occupational licenses within the state. But I think kind of the compromised middle ground is just to expand this idea of licensing reciprocity between the states because it at least gets halfway to the solution and there seems to be some willingness now in state legislatures to consider that approach.

Michael Schaus: The guiding principle there when you’re talking about licensure, regardless of whether somebody’s a Democrat or Republican, how do we make it easier for somebody to go out there and earn a living? Not how do we make it harder for them to do that? At least that’s kind of the more or less the way I look at it.
One of the other issues that comes up a lot and maybe less so now since housing prices seem to be falling and people are going to be buying less because interest rates are going up, but for years we’ve been talking about affordable housing.

I expect that’s going to be talked during the session. Do you guys have a section on affordable housing and some solutions there?

Geoff Lawrence: So, there’s not a new section in Solutions. However, we did just publish separate policy study on promoting affordable housing, which big thrust of that is trying to liberalize the land transfer process from the Bureau of Land Management to private developers. Because particularly in southern Nevada, one of the biggest constraints that leads to elevated housing prices is the scarcity of private land.

Michael Schaus: Yeah. We just need to be able to build.

Geoff Lawrence: Yeah, that’s right. And there’s a huge disincentive the way SNPLMA works, which is Southern Nevada Public Land’s Management Act, which was a piece of Harry Reed legislation from about 30 years ago. The way it works is it requires if there’s a BLM held parcel that a developer wants to, you know, build homes on, for instance, then they have to petition the Department of Interior to put it up for auction.

Now they could spend well into six figures in legal costs, just trying to get the petition approved. But then it goes to public auction, so they may not actually be the final winner. Someone else could, could scoop it up. And that creates an automatic disincentive for anyone ever to initiate the petition process.

There’s got to be a better way of dealing with that, which of course requires change to federal law and not something that state legislature can address on its own. But one thing that the state legislature can do is to draft a joint resolution of some type urging the congressional delegation or the Department of Interior directly to change the way the process works.

Michael Schaus: And this is one of the downsides of living in a state where 80 some odd percent of the land belongs to the federal government in one way or another. Less of this can be directly dealt with locally.
I think about growing up in Colorado, we had our fair share of federal land, but a lot of it was just state controlled. And so, if something like this came up, the state could go ahead and meet and decide to go forward on something. Here in this state, we’re a little bit more handcuffed.

Looking forward to 2023, I mean, obviously we’re going to be talking about some of these specific solutions as they come up and everything. Are you feeling relatively optimistic? Given the, you know, split political nature of our government and what have you, I actually feel like there’s some good opportunity there to get some of these kinds of nittier, grittier policy issues done.

There might not be some big sweeping, huge reform on some issue that somebody cares about because you’ve got the governor and the legislature going to be kind of at odds. But I do feel like that opens up a possibility for a lot of these kind of smaller reforms that make a big difference in people’s everyday life.

Geoff Lawrence: Yeah. There’s a reason people like divided government. There isn’t massive upheaval in your life as a result of it. You know, gridlock is a good thing. It’s a feature of American government. That’s why we set it up the way we did with you know, divided powers between federal government and the states, and even within each level of state and federal governments themselves.

So, you know, people like gridlock. And one of the features of it is that when there is a policy change within a divided government, it tends to stick around for a while. I think we saw just a couple years ago here at Nevada, Republicans very briefly had a trifecta, capturing both chambers of the legislature and the governor’s mansion. They enacted some kind of sweeping reforms across a host of issues. By 2021, basically everything that they had enacted in 2015 had been erased.

So yeah, I mean, it’s sometimes encouraging when your side is in power, and you think that they’re doing the right things. But you know, if those things don’t stick around for more than a couple of years then it really doesn’t help society out in terms of solving major public policy problems, right.?

I tend to think that the solutions we can negotiate toward during a divided legislative session often wind up being the most lasting and impactful solutions.

Michael Schaus: Now, I want to take you to the national scene a little bit because you know, you’re obviously with the Reason Foundation and looking at, you know, the kind of divided nature of government on the national level. You know, again, one of the positives, there is something like the States Reform Act might actually have some opportunity. I keep on looking at the national level and, you know, obviously I’m not happy with a lot of the policies that come out of there, but I am usually pretty happy when they are divided because you end up getting some of those reforms like the States Reform Act, which would legalize marijuana on the federal level.

Can you talk a little bit about that effort to decriminalize marijuana on the federal level and kind of where you guys are at that at this point?

Geoff Lawrence: Yeah, sure. I had a lot of input on the drafting of that bill. I’m pretty proud of the outcome. So, States Reform Act is a proposal by House Republicans led primarily by Nancy Mace out of South Carolina that would remove cannabis from all scheduling under the Controlled Substances Act, so it become s an uncontrolled drug at the federal level, but would allow states to continue to implement whatever kind of treatment of cannabis they want.

So, every state has their own version of the Controlled Substances Act and a change at the federal level does necessarily imply a change at the state level. So, you could have states like, you know, across the south for instance, there doesn’t seem to be as large of an appetite for legalizing cannabis. And so, the states could continue to maintain a regime of prohibition.

But for states like Nevada that have created adult use markets or even states that have created just medical markets, they would be able to regulate those markets as they see fit while removing all of the current barriers for things like banking.

So, you know, one of the key problems that state regulators run into is that it’s very difficult to audit a cannabis licensee because a lot of their transactions don’t occur within the banking system. So, there are no audit records. It makes it difficult to determine whether the licensee has illegally diverted cannabis inventory, for instance. And it makes regulation actually more difficult and makes the black market more vibrant.

You know, some solution like this at the federal level would actually be better for creating a truly regulated market. And States Reform Act, unlike some other congressional proposals right now, has a fairly low federal excise tax. So, it’s set at 3% of wholesale transactions.

The whole point of keeping the federal tax down is because there are state and local taxes that would be layered on top that are heavily punitive already. And the tax rates create a price discrepancy between legal and illegal products, which otherwise are essentially the same product, right?

Michael Schaus: Yeah.

Geoff Lawrence: So, you see places like California where the prices of legal goods are 80 to a hundred percent higher than nearly identical illegal products. And as a result, about two thirds of market demand is still satisfied by illicit actors six years after legalization. So, you know, keeping the tax rates down is important.

States Reform Act also would open up interstate commerce between the states that have created regulated markets. So, the Department of Treasury would facilitate interstate shipments of inventory. And you know, like if a dispensary in New Jersey, for instance, wants to buy from a grower in California, Treasury Department would check it out of the state track and trace system in California, carry it across the country, and check it into the track and trace system in New Jersey so that all of the regulated inventory is accounted for all the way through the supply chain.

And it creates a more vibrant and geographically diversified market. Like right now, cannabis markets, there’s no specialization because you have people in Illinois, for instance, that are growing indoors and trying to replicate outdoor conditions, right? Which is incredibly inefficient and consumes huge amounts of energy and results in a very expensive product.

So, you know, at the end of the day, most cannabis cultivation, for instance, should probably occur in places like California and Oregon, where the conditions are ripe for it. And you can do it efficiently outdoors. It probably doesn’t make sense for every state to have their own series of indoor warehouses with 50-foot ceilings and triple stack cultivation.

It’s incredibly inefficient from a financial standpoint, from an energy standpoint, from basically any way you look at it.

Michael Schaus: Well, and it also seems like you make it more possible to have better price stabilization too. I mean, if, you know, all of a sudden Nevada has got some sort of a growing demand for marijuana that the industry can’t quite meet, they would be able to look elsewhere and say, “Hey, how can we import some more product in order to, you know, give it to our customers?”

And that, in turn, would potentially stabilize price. So, no, that would be great. That would be a huge step forward moving it off the, you know, federal schedulization list and basically just getting the federal government to stop treating otherwise legal businesses as potential criminals.

Geoff Lawrence: Yeah, and you know, one of the great upsides is that it frees up federal resources to be used in more productive ways. Like, you know, there are real crimes with victims that law enforcement could be going after. But instead, we waste billions of dollars a year trying to incarcerate people for, you know, consuming a substance. They might need to, from a standpoint of medical necessity. There are certain conditions that cannabis clearly ameliorates the symptoms for.

And so, it’s an incredible waste of money to try and you know, enforce this prohibition regime.

Michael Schaus: Well, and that’s actually a good point too. Even in states where it’s legal, there are actors who still are prohibitionist at heart. And I’m thinking about you know, a while ago in California there was that sheriff that kind of had a vendetta against armored car carriers that were carrying supposedly marijuana money.

And, you know, he used civil asset forfeiture through the federal government in order to seize the truck’s cash. You know, very strange story. And of course, you know, that bad actor is still going to exist, but he was given an extra tool because on the federal level, this is obviously considered a scheduled substance.

So, he was able to, you know, have a little bit more leverage there than he otherwise would have.

Geoff Lawrence: Yeah. And through that federal asset forfeiture program, the participating local government gets to keep like 60% of the proceeds of the seizure. So, there’s a clear financial benefit. Like you were incentivizing police departments to go out and do this, even in legal states.

By the way that story you bring up was in Riverside County, California where they were seizing shipments from armored car service called Empyreal. At the time I was working for a licensee in Riverside County that used the same armored car service. So that one hit pretty close home to home for me.

Michael Schaus: It was Riverside, but then there was also another one out in, I think maybe Kansas or something. And they targeted the same armored truck, the same courier. And yeah, it was just mind boggling to me. It was, you know, obviously a scary story, but especially for anybody in the industry, you would think hiring an armored courier would be the safest way to get your money to where it needs to go. And apparently that’s not the case in Riverside, California.

Geoff Lawrence: Or just using banks and receiving all of your payments and paying vendors electronically would eliminate this entire disaster that we’re in right now.

Michael Schaus: Yeah. So, we’ll definitely keep our eye on the States Reform Act because that’s some great news on the federal level that, you know, kind of a bright spot and the circus that is Congress.

Geoff Lawrence: Well, yeah, actually, you know, further update on that. It’s so Nancy Mace, you know. We had our first hearing on that bill last week and there seems to be some convergence now between people backing States Reform Act and the MORE act, which is the other kind of the alternative that has already passed the house.

And Nancy Mace now will be moving into a leadership role. Well, I mean, sorry, she’s in the majority now, but will be the ranking member on her committee where this will be heard in the next session. And then with the Senate staying in Democratic hands, leadership over there is also you know, has also made cannabis legalization one of their top priorities.

So, there’s actually a pathway to get something done in the next session which would be a huge change in Washington.

Michael Schaus: Yeah, since I’m not expecting a balanced budget anytime soon, so at least this would be, you know, a bright spot there. Geoff, thank you so much for joining us today. Again, people can go to nevadapolicy.org and you can take a look at Solutions once it’s finally released. But we appreciate you coming here and kind of talking us through some of the items that we are expecting in 2023.

Geoff Lawrence: Yeah, definitely. Thanks for having me, Michael.

Michael Schaus: Again, that’s Geoff Lawrence, Director of Research for Nevada Policy and also Director of Research with Reason Foundation. Again, some great work both on the national level and here in the state of Nevada.

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