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NPRI applauds Senate passage of SB302, Education Savings Accounts bill

For Immediate Release

Contact Chantal Lovell

May 27, 2015

702-222-0642, 951-295-4855 (cell)

 

CARSON CITY — This afternoon, the Nevada Senate passed SB302, which would create the best school choice program in the country, by an 11-to-8 vote.

If passed, Senate Bill 302, which now moves to the Nevada Assembly, would allow parents to establish an Education Savings Account instead of sending their child to public schools. The ESA would provide parents with 90 to 100 percent of the average funding in the Distributive School Account, to use for their child’s education. Unlike a voucher, ESA funds can be used on a variety of education expenditures, including private school tuition, tutoring, distance learning and even transportation expenses. ESAs allow parents to customize their child’s education in a way that is best tailored to their child’s unique needs. If money is left over in the account, it can be saved and used in following years.

In response to the landmark vote, NPRI’s Executive Vice President Victor Joecks issued the following remarks:

Today, we applaud the eleven visionary Senators who voted to create the best school choice program in the entire country. By passing SB302, these Senators voted to give Nevada families more choice than they’ve ever had before in education and to give Nevada students the greatest opportunity for success they’ve ever had. The Education Savings Accounts program that would be created if the Assembly and Governor Sandoval follow suit and pass SB302 would allow all Nevada children — regardless of their family’s financial ability — to have an education that is tailored to their unique needs and talents, thereby giving them the best chance to succeeding academically.

With SB302, all parents will be able to select the school, school type and support services that are best for their child. Over two-dozen states already have school-choice programs in place, and those programs are increasing student achievement for students who participate in the choice options and even the students who remain in public school.

Joecks noted that SB302 only provides ESA funding from the DSA funds, so per-pupil spending in local school districts will increase every time a parent and child choose to use an ESA. That’s because school district get to keep all the funding from local sources outside the DSA and federal dollars, while having fewer students to educate. Joecks also noted that providing ESAs would ease any overcrowding issues faced by school districts without requiring a property tax increase.

Nevadans should be grateful to bill sponsor Sen. Scott Hammond for his leadership and vision and to Sens. Becky Harris, Ben Kieckhefer and Michael Roberson for shepherding what would be the best school choice program in the country through their committees and the Senate floor.

With SB302, Nevada is poised to lead the way in the school choice movement, and we urge the Assembly to pass this bill and send it to Gov. Sandoval for his signature.

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Governor’s new tax plan still has numerous structural, constitutional issues

CARSON CITY — Today, the Assembly Ways and Means and Senate Finance Committees held a joint hearing on Gov. Brian Sandoval’s new tax proposal, which was heard as an amendment to AB464. Sandoval’s tax plan would increase the modified business tax, raise the business license fee and create a new gross receipts tax, called the “commerce” tax.

NPRI executive vice president Victor Joecks offered the following testimony:

Thank you, Mr. Chair. For the record, Victor Joecks with the Nevada Policy Research Institute. We are opposed to the Governor’s tax plan.

Regardless of how much a gross receipts tax brings in, there are inherent structural problems with gross receipts taxation.

First, it raises taxes on businesses that are losing money, which may force many struggling businesses out of business.

Second, gross receipts taxes create tax pyramiding, because the tax is assessed at multiple stages in the production process.

These are some of the same problems that voters had with the recently defeated margin tax, and the reason is that the margin tax and commerce tax are both based on gross receipts.

I’d also like to point out that the commerce tax would only be collected once during the next biennium, because the second payment will be collected by Aug. 15, 2017, which is in Fiscal Year 2018. Since the Modified Business Tax deduction will be taken during Fiscal Year 2017, the commerce tax will net just $60 million in the next biennium. That’s less than one percent of the governor’s recommended spending levels.

That would make it just the 12th largest tax source behind the sales tax, sales tax commission, MBT-non-financial, insurance premium tax, real property transfer tax, live entertainment tax, business license fee, cigarette tax, liquor tax, Secretary of State revenues, and short-term car rental fees.

Also, Article 10, Section 1 of Nevada’s Constitution states: “The Legislature shall provide by law for a uniform and equal rate of assessment and taxation…”

With 27 different rates, depending on the type of business, this tax would create unequal rates of taxation. You've even discussed that today when talking about businesses "code" shopping.

Finally, spending more on education won’t increase student achievement and hasn’t for the last 50 years.

In 1983, when Gov. Richard Bryan took office, Nevada’s inflation-adjusted per-pupil education spending was $4,859, according to Nevada’s Legislative Counsel Bureau. When he left office, it was $5,737.

In his 1987 State of the State speech, he boasted, “Since 1984, Nevada has increased the money dedicated to our public schools by nearly 50 percent, more than any other state.”

When Gov. Bob Miller took over in 1989, inflation-adjusted, per-pupil spending was $5,964. When he left office in 1998, it had grown to $7,239.

In one of his State of State addresses he declared: “Over 61 percent of all new revenues in my budget go to education … I propose increasing education funding by $96 million.”

In 2003, Gov. Kenny Guinn passed the largest tax increase in Nevada history, in order to fund education.

Successful efforts to raise spending, however, have failed to improve Nevada education.

Nevada’s inflation-adjusted, per-pupil spending has now grown to $8,781 in 2011, according to the latest data available. Yet, we’re still here trying to increase student achievement by spending more and more.

Spending more won’t increase student achievement, and it won’t prevent unions from wanting even higher taxes in the upcoming years, whether through legislative action or ballot initiatives.

Thank you for your time.

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NPRI praises Knecht-Wheeler alternative budget

For immediate release 
Contact Chantal Lovell, 702-222-0642

CARSON CITY — The Nevada Policy Research Institute praised Controller Ron Knecht, Assemblyman Jim Wheeler and Assistant Controller Geoffrey Lawrence for creating an alternative budget that eliminates the supposed need for tax hikes.

The Balanced Plan for Growth, a line-by-line alternative budget, more than funds the state’s needs without raising taxes, including allowing the “sunset” taxes to sunset. In response to the proposal, NPRI Executive Vice President Victor Joecks released the following comments:

Nevada taxpayers should be grateful to Controller Ron Knecht and Assemblyman Jim Wheeler for proposing an alternative budget plan for lawmakers’ consideration. Thus far, the Legislature has considered plans that would significantly raise taxes on Nevada’s families and businesses, but the Balanced Plan for Growth shows these tax hikes are unnecessary.

The Controller’s plan reduces the massive expansion of government proposed by Gov. Brian Sandoval while still providing more than enough money for the government to function and even grow.

Joecks added that the budget is innovative in the way it proposes funding programs like class-size reduction through block grants, allowing districts to pick the programs that are most effective for their students, rather than spending haphazardly.

Rather than increasing the burden on taxpayers, the plan calls on local governments to contribute more to the state by trimming their most wasteful expenditures: salaries.  Local governments may consider asking employees to contribute a larger share of the cost of their retirement plans.

The Balanced Plan for Growth represents a true compromise between those who wish to increase government spending and those who want to keep taxes low, Joecks said.

Earlier this year, NPRI presented a line-by-line alternative budget with General Fund spending levels at $6.3 billion. With Sandoval desiring $7.4 billion in spending, the $6.9 billion spending suggested in the Controller’s plan is a natural compromise. This plan would generously fund Nevada’s public sector, while also protecting Nevada taxpayers.  

All taxpayers and Nevadans should call on Gov. Sandoval and their Legislators to support it.

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NPRI: Sandoval’s ‘hybrid’ tax plan combines problems with all proposals

For immediate release 
Contact Chantal Lovell, 702-222-0642

CARSON CITY – Tonight, Gov. Brian Sandoval released a revised version of his gross-receipts tax proposal that also includes an increase in the Modified Business Tax and Business License Fee. In response to the news, NPRI Executive Vice President Victor Joecks released the following comments:

Nevada taxpayers have clearly let policymakers know that they don’t support higher taxes, especially a gross-receipts tax. With the margin tax going down in flames by a 4-to-1 ratio, and Sandoval’s Gross Receipts Business License Tax failing to even receive a vote in the Assembly, that message has been clearly sent. 

Unfortunately, Gov. Brian Sandoval is continuing to try and ram through a scaled-down version of a gross-receipts tax.

Calling it a “Commerce Fee” can’t disguise the problems inherent in gross-receipts taxation, such as raising taxes on businesses that are losing money and tax pyramiding.

Joecks noted that Sandoval’s plan would also raise the job-killing modified business tax and increase the costs of every small business owner.

Sandoval’s new plan combines the worst elements of all the existing plans and would pave the way for a never-ending push to expand the structurally flawed gross-receipts tax. 

While this plan would ensure full employment for lobbyists, it would lower employment for everyday Nevadans.

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NPRI comments on Senate passage of Sandoval’s tax

For immediate release 
Contact Chantal Lovell, 702-222-0642

LAS VEGAS — Responding to the Nevada Senate’s passage today of Senate Bill 252 to create a Gross-Receipts Business License Tax, the Nevada Policy Research Institute’s Executive Vice President Victor Joecks issued the following comments:

The voters of Nevada made clear in November that they do not want to impose a gross-receipts business tax, yet today the Senate passed a similar tax. Unlike the 17 Senators who voted in favor of SB252, Nevada voters recognized that raising taxes on businesses that are struggling or even losing money will only hurt families and parents throughout Nevada.

Nevada voters should thank Senators Gustavson, Goicoechea, Hammond and Settelmeyer for respecting the will of voters and rejecting this destructive tax.

SB252 would create a tax that charges businesses on their gross receipts, meaning even businesses running a deficit would be required to pay. This will force struggling businesses to close their doors and lay off workers. As the Tax Foundation has said, ‘There is no sensible case for gross-receipts taxation.’

Joecks urged Nevada Assembly members to reject SB252 and noted that Texas has experienced numerous problems with its own tax on gross receipts, the margin tax.  

Governor Sandoval has stated he’s modeled his tax after Texas’ franchise tax, but that tax is failing in Texas. After Texas implemented a margin tax in 2007, roughly 20 percent of small businesses reported they would be forced to lay off employees, while one-third of businesses reported they’d leave jobs unfilled. This gross-receipts tax has been so bad that lawmakers in Texas are currently looking to eliminate it.

Supporters of the Governor’s tax point to his popularity as reason to support this tax. But a poll released by NPRI on Monday shows that nearly 90 percent of Nevadans are unaware that Governor Sandoval has proposed the largest tax increase in the state’s history. In his last campaign Sandoval even touted his support for ‘no new taxes.’

Education does need reform, but that won’t come from throwing more money into the system through SB252. Lawmakers should implement innovative and proven solutions to Nevada’s problems, like universal Education Savings Accounts and paying top teachers in failing schools premium wages.

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NPRI hails passage of Opportunity Scholarships

For immediate release 
Contact Chantal Lovell, 702-222-0642

LAS VEGAS — The Nevada Policy Research Institute is applauding Gov. Brian Sandoval for signing into law Assembly Bill 165, legislation creating the state’s first Opportunity Scholarships, a school choice measure for which the Institute has long advocated.

In response to the passage of AB165, NPRI Deputy Communications Director Chantal Lovell issued the following comments:

Today, NPRI celebrates with families across the state of Nevada over the creation of the Nevada Educational Choice Scholarship Program. Opportunity Scholarships open the door for more families to have greater freedom in where their children will be educated, ensuring that more of Nevada’s kids have a chance to succeed.

The state’s traditional, one-size-fits-all education system has failed Nevada students for decades, so it’s high time we allow children to take advantage of individualized education that can help them meet their full potential. This is especially true for children from Nevada’s more economically deprived families, who are the primary beneficiaries of AB165.

School choice has been proven to work; out of 12 empirical studies that have examined its effectiveness, 11 found that school choice improves student outcomes, while one found no impact. Studies overwhelmingly show that school choice also improves public schools.

By allowing businesses to donate to scholarship funds in return for tax credits, Nevada’s companies can help to create the educated workforce they need to make this state better for generations to come.

Though Opportunity Scholarships are a great step for Nevada, the work is not over. Nevada lawmakers must work to expand school choice in Nevada by allowing more charter schools to open in the state and creating an Education Savings Account Program so that all children, regardless of their own abilities or their family’s economic status, may access the educational program that best suits their unique needs.

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