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Abandoning coal in NV will cost Nevada

LAS VEGAS — Thousands of working Nevadans will be left jobless and energy customers will see their bills skyrocket as Nevada implements a two-year-old law requiring NV Energy to shut down its coal-fired power plants by 2020 and shift to renewable sources.

That’s according to a new analysis commissioned by the Nevada Policy Research Institute and conducted by the Beacon Hill Institute at Suffolk University. The analysis, authored by Paul Bachman and Michael Head, examines the economic effects of Senate Bill 123 on Nevada’s economy.

His findings show that the bill, passed by the 2013 Legislature, will cause 2,630 people to lose their jobs by 2020 as companies adjust their spending to account for higher energy bills. Energy bills for customers will rise, while disposable income and investment in the state fall.

In response to the study, NPRI’s Deputy Communications Director Chantal Lovell issued this statement:

Supporters of mandates like SB123 claim that abandoning the use of coal and moving to renewable sources will stimulate the economy through the creation of “green” jobs. But as studies by Beacon Hill and others make clear, jobs are not being created on net, but lost.

These job losses and rate hikes are coming because the State of Nevada has told its energy utility that it may no longer use energy sources that have served consumers for decades and must instead replace them with more socially acceptable technologies.

Rather than expanding regulations that hurt working people and the economy, Nevada and other states should look to Texas, which has aggressively sought to deregulate electricity, resulting in the nation’s least expensive electricity.

To speak with the study’s authors, contact Chantal Lovell, whose information listed above.

Read the full analysis: http://www.npri.org/docLib/20150409_EconomiceffectsofSB123.pdf

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Nevada local government employees are not underpaid, according to national scholars

LAS VEGAS — A study being distributed by SEIU of Nevada — claiming that the state’s local-government employees receive less compensation than comparable private-sector workers — is fatally flawed, say authors of a major national state-by-state ranking of public employee pay.

The SEIU-backed white paper is written by Rutgers Associate Prof. Jeffrey Keefe and argues that Nevada’s local-government employees receive lower combined salaries and fringe benefits than do comparable private-sector workers. But the Keefe study, say Andrew G. Biggs and Jason Richwine — themselves authors of a comprehensive look at public-employee compensation — “is fatally flawed.” Biggs is also the author of the Nevada Policy Research Institute’s 2001 study, “Reforming Nevada's Public Employees Pension Plan.”

Biggs and Richwine say the important flaws in the study include:

Wage results are not replicable. Keefe claims that Nevada local government employees receive significantly lower wages than similar private sector workers. But we are unable to replicate Keefe’s figures. Data from the Current Population Survey show that, after controlling for education, experience and other factors that affect pay, Nevada local government employees receive comparable salaries to private sector employees. Analysis using the American Community Survey shows a public employee wage premium.

Benefits data are not specific to Nevada. Even though he is purportedly studying Nevada, Keefe’s benefits data are actually averages for Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, and Wyoming. Using regional averages is acceptable for minor benefit categories or for the private sector, where there is less cross-state variation. But large public-sector benefits such as pensions and health insurance can differ dramatically among states. For these benefits, it is necessary to use Nevada-specific data. Keefe’s regional average benefit numbers are simply not relevant to Nevada.

And even Keefe’s regional comparison is wrong. It is well-known among researchers that the Employer Cost for Employee Compensation (ECEC) data set used by Keefe has two major drawbacks:

Pension compensation is undervalued. The ECEC values pension compensation based on the government’s contribution to the fund. But what states contribute in a given year has literally nothing to do with what pension benefits will be owed. The proper valuation of pension benefits comes from the risk-adjusted “normal cost” of the pension, meaning the present value of benefits accrued by workers each year, less any employee contributions.[1]

Retiree health benefits are omitted. Most Nevada local employees become eligible for some form of retiree health coverage, but the ECEC data — and, hence, Keefe’s study — omit retiree health costs entirely. Governments are required to report the value of retiree health benefits accruing to current employees. For example, the City of Reno’s actuarial valuation shows that future retiree health benefits accruing to city employees in 2013 were worth an additional 11.5% of wages.[2] By contrast, retiree health benefits in the private sector typically amount to less than 1% of wages.[3]

For all of the above reasons, Biggs and Richwine state, the Keefe study “is not a useful analysis of local government compensation in Nevada.”

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Nevada Policy Research Institute ∙ 7130 Placid St., Las Vegas, NV 89119
Phone: 702-222-0642 ∙ Fax: 702-227-0927 ∙ Web site: http://npri.org

[1] Biggs and Richwine, “Overpaid or underpaid? A State-by-State Ranking of Public-Employee Compensation,” American Enterprise Institute, April 2014.” Also see Congressional Budget Office, “Comparing the Compensation of Federal and Private-Sector Employees.” January 2012.

[2] City of Reno, Actuarial Valuation of Other Post-Employment Benefit Programs as of July 1, 2013.

[3] Biggs and Richwine, “Overpaid or underpaid?” pp. 36-38

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School districts see little-to-no savings on ‘green’ schools, study shows

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

LAS VEGAS — The push to build “green” schools is growing in Nevada, but a new study raises questions about the payoff of meeting these costly construction standards.

The analysis — written by Todd Myers, a Wall Street Journal expert panelist and the environmental director at the Washington Policy Center — compares the construction and energy costs of schools in Clark and Washoe counties and finds that facilities built to “green” standards produce only nominal electricity savings and, in some cases, use more energy than schools not built to these costly standards.

When compared to non-green schools, Depoali Middle School — Washoe County’s one middle school built to green standards — performed well, but was not the most energy efficient. Another school, Cold Springs Middle School, took the spot for most energy efficient middle school in the district despite not having been built to green standards; Shaw Middle School, also a non-green school, tied Depoali for the second-most efficient middle school in the district.

Myers estimates it will take 40-100 years worth of energy savings to pay for the added construction costs of the green Depoali.

The four green elementary schools in the Clark County School District are more efficient than non-green schools built around the same time, but it could be decades before the district sees a payoff for its investment as well.

NPRI Deputy Communications Director Chantal Lovell issued the following comments about the study:

With Gov. Brian Sandoval and the Legislature just authorizing ten additional years of bonding without voter approval, it’s important that school district officials not waste taxpayer dollars on ‘green’ schools that fail to produce return on investment.

To spend millions on construction elements that may satisfy the demands of environmental activists but may never pay for themselves in energy savings would be a waste and undercut the school district’s stated priority of building new schools.

Schools built to green/LEED standards can cost anywhere from 1 to 3 percent more to construct, but take decades before the added construction elements pay for themselves. Before any school is built to ‘green’ standards, officials should ensure the added expense actually saves money, instead of limiting the number of schools that can be built.

The study does not consider the additional maintenance costs that energy-saving elements typically incur over the years, meaning the financial benefit of green buildings is even less.

To speak with the study’s author, please contact Chantal Lovell, whose information is listed above.

The full analysis can be read here: http://www.npri.org/docLib/20150326_GreenSchools.pdf

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NPRI releases alternative budget proposal

CARSON CITY – Today, the Nevada Policy Research Institute released an alternative line-by-line budget for Nevada, entitled the Freedom Budget 2016-2017.

The Freedom Budget contains recommendations for each of Nevada’s 441 budget accounts and serves as an alternative spending plan to Gov. Brian Sandoval’s proposal for record spending and the largest tax hike in Nevada history, including the imposition of a Gross Receipts Business License Tax.

Compiled by NPRI Executive Vice President Victor Joecks and NPRI Transparency Manager Robert Fellner, NPRI’s Freedom Budget proposal is based on Sandoval’s 2012-2013 Executive Budget. In 2011, Sandoval presented the legislature with a budget for the 2012-2013 biennium that recommended $5.8 billion in general funding spending and $17.5 billion in total appropriations.

The spending recommendations in the Freedom Budget are based, in large part, on growing Sandoval’s recommendations from four years ago, but not as quickly as Sandoval has currently proposed. It also eliminates ineffective and unconstitutional programs.

NPRI’s 2016-2017 Freedom Budget proposes:

  • General fund spending of $6.4 billion, total spending of $22.2 billion over the biennium
  • No tax increases
  • Reducing general fund appropriations by $1.5 billion
  • Lowering non-general fund appropriations that are fungible to the general fund by $279 million
  • Cutting $79 million in spending that is not fungible to the general fund
  • Around $600 million in new spending

In comparison, Sandoval has recommended a spending plan with $7.3 billion in general fund spending, $23.5 billion in total spending and $1.3 billion in tax increases.

NPRI’s budget, which could be implemented without raising any new taxes, would allow the “sunset” taxes to finally sunset. It still constitutes a dramatic increase over the spending levels Sandoval proposed in 2011. Overall, the budget would grow from $17.5 billion in 2012 and 2013 to $22.2 billion in 2016 and 2017, a 26 percent increase in total government spending.

“NPRI’s Freedom Budget eliminates the need for tax increases, including extending the sunset taxes, by simply by growing government at a slower pace than Gov. Sandoval has recommended and eliminating ineffective and unconstitutional programs,” said Joecks.

“Sandoval has challenged opponents of his plan to produce alternatives, and we are proud to introduce this plan, based on Sandoval’s own 2011 proposal, into the debate,” he continued. “This budget shows that raising taxes isn’t necessary to improve education or even to fund an expansion of government from what Sandoval proposed in 2011.”

NPRI’s Freedom Budget is informed by four principles:

  1. Increase previous spending recommendations by Sandoval, but at a slower rate than Sandoval currently proposes.
  2. Use policy changes to make government more efficient.
  3. Fund agency request amounts, instead of the higher amount recommended by Sandoval.
  4. Limit government to its core and Constitutional functions.

“The Freedom Budget also recommends policy reforms, especially in K-12 education, that will allow lawmakers to achieve better results for less,” Joecks said. “Specifically, the Freedom Budget recommends repealing NRS 288 to allow school districts complete freedom in firing or improving underperforming teachers and rewarding excellent ones.

“Implementing universal school choice, as recommended, would provide the ultimate accountability, because parents would be able to find the school and school type that’s best for their children.”

Joecks noted that one limitation of the Freedom Budget was the difficulty of estimating the fiscal impact of a Medicaid expansion rollback, given the complex interplay between state and federal funding. NPRI recommends repealing Medicaid expansion as a policy proposal to ensure that children and the disabled receive medical care before healthy adults, but that recommendation is not reflected in the numbers. 

 “NPRI’s Freedom Budget gives policymakers another option to consider and shows that keeping taxes low — which most lawmakers told voters they support — is a realistic option,” Joecks concluded. 

Read more:

Freedom Budget 2016-2017: http://www.npri.org/docLib/20150323_FreedomBudget.pdf

Spreadsheet: http://www.npri.org/docLib/20150323_Alternativebudgetspreadsheet.xlsx

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Nevada Policy Research Institute ∙ 7130 Placid St., Las Vegas, NV 89119
Phone: 702-222-0642 ∙ Fax: 702-227-0927 ∙ Web site: http://npri.org

 

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Transparent Nevada updated with 2014 compensation data

LAS VEGAS — TransparentNevada.com, the website that allows users to search public employee salary and benefit information by name,  jurisdiction or job title, has been updated with 2014 compensation data for over 122,000 Nevada government employees.

The 2014 data includes salary and benefits information from 123 Nevada jurisdictions, although Clark County and the City of Henderson have yet to provide 2014 data.

Now, for the first time ever, the website — operated by the Nevada Policy Research Institute as a public service — includes compensation information for charter school employees.

“Each year, we update TransparentNevada.com with new public employee compensation information that is both shocking and eye-opening,” NPRI President Andy Matthews said.

“In 2014, we again saw countless instances of over-the-top compensation to government employees,” he said, adding that, “More than 1,300 government employees were paid in excess of $200,000, and 2,011 employees received higher compensation than did Gov. Brian Sandoval. The site is full of examples like these which, unfortunately, seem to be the norm rather than the exception.”

Thanks to the new information, users of the site may now view compensation data on charter school employees and compare them to those of public school employees. The new data shows that public school teachers, on average, received $75,974, versus charter school teachers who received $59,408 on average in 2014.

Some takeaways from the 2014 data:

  • At least 2,011 employees received higher compensation than Gov. Brian Sandoval.
  • At least 76 employees made more in overtime/callback pay than their base salary.
  • At least 1,302 employees received more than $200,000 in total compensation.
  • The number of State of Nevada employees making over $200,000 increased 5 percent from 2013 to 2014.
  • Total overtime spending at the State of Nevada increased 23.8 percent — from $21.44 million in 2013 to $26.55 million in 2014.
  • The State of Nevada is unlawfully redacting the names of the Inspector General, Medical Director, Park Supervisors, Park Rangers, as well as all law enforcement officials. The state is using an exemption lawmakers designed for undercover law enforcement personnel, whose safety could be jeopardized by disclosure.
  • Rossi T. Ralenkotter, president and CEO of the Las Vegas Convention and Visitors Authority, got a 10 percent pay bump, receiving $498,969 in total compensation.
  • Clark County School District Superintendent William Skorkowsky was the highest-paid superintendent in the state, receiving $393,129 in 2014.
  • Average compensation of the 500 highest-paid employees in North Las Vegas increased 10.5 percent to $200,780 from 2013 to 2014. The increases total $9,598,644.
  • Las Vegas City Manager Elizabeth Fretwell was the highest-paid city manager in 2014, receiving $302,489 in total compensation in 2014.
  • A custodian at the Southern Nevada Water Authority received $98,858 in total compensation, while two others received over $96,000.
  • A librarian in North Las Vegas received $130,121 in total compensation.
  • Agencies either refusing to comply or citing “extraordinary use” in response to our public records requests that are also supporting SB28, a bill to suppress public-records requests: City of Caliente, Gardnerville Ranchos General Improvement District, and the City of Lovelock.
  • The average compensation for Reno fire department employees rose from $126,040 in 2013 to $130,516 in 2014.
  • From 2013 to 2014, overtime spending from Reno fire increased about 27 percent to $2.24 million.
  • Sparks’ 90 firefighters received an average of $14,983 in overtime, for a total of $1.35 million in overtime spending in 2014.

It should be noted that the City of Henderson and Clark County have yet to provide 2014 data, so the numbers do not reflect the thousands of employees that work for those governments.

“Transparent Nevada is the go-to website for lawmakers, media, the public and even government employees who want to gain a better understanding of how Nevada government is spending taxpayer money,” Matthews said. “In 2014, Transparent Nevada earned 2.98 million page views and was cited by countless individuals trying to enhance government accountability.

“As state lawmakers consider reforms to collective bargaining, the new data on Transparent Nevada shows those reforms are needed now more than ever.”

TransparentNevada.com launched in September 2008 and has served as a unique source of government-financing information for hundreds of thousands of citizens, journalists and elected officials. Recently, Transparent Nevada added pension data from the Nevada Public Employees’ Retirement System to the site at TransparentNevada.com/nvpers/2014.

The site will be updated as other government entities provide salary information.

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NPRI comments on Sandoval’s job-killing gross receipts BLT

CARSON CITY – In response to today’s hearing by the Senate and Assembly Taxation Committees on Gov. Brian Sandoval’s Gross Receipt Business License Tax, NPRI Executive Vice President Victor Joecks released the following comments:

Gov. Brian Sandoval can put on a political circus, but his dog-and-pony show can’t mask the problems with SB252, his Gross Receipt Business License Tax. In November, voters rejected a similar proposal by a 4-to-1 ratio, because they understood that raising taxes on businesses that are losing money will kill jobs and force struggling businesses to close their doors.

Sandoval’s own witness, Jeremy Aguero, admitted that SB252 doesn’t solve the tax pyramiding problems inherent in gross receipts taxation. These structural problems are part of the reason why the Tax Foundation has said that, “There is no sensible case for gross receipts taxation.”

Sandoval’s staff says that they’ve modeled this tax after Texas, but earlier this month, Texas held a hearing to eliminate its margin tax. Texas wants to eliminate this tax because of the many problems Texas businesses have had with this tax. This includes 20 percent of small businesses having to lay off employees the year after the margin tax was implemented.

Joecks noted that Sandoval is pushing the Gross Receipts BLT as being broad based, but two years ago, Sandoval bragged about exempting three of four Nevada businesses from the Modified Business Tax. The concern about a narrow base is an issue that Sandoval created with his own policies.

Joecks noted that Sandoval’s proposal to dump more money in education has a 50-year track record of failure.

It’s amazing to watch three former governors talk about the need to dump more money into our failing education system without acknowledging that education funding increased during their tenure.

Gov. Bob Miller touted the start of class-size reduction during his testimony, but failed to acknowledge that spending billions on CSR has failed to increase student achievement.

What Nevada needs is fundamental reform, like universal Education Savings Accounts or paying top teachers in failing schools premium wages, instead of paying more for more of the same.

Sandoval’s education plan isn’t new. It’s the same plan politicians have been pushing for the last 50 years. It’s a shame that Sandoval wants to ignore 50 years of state history and doom tens of thousands of students to the same failing education system.

Nevada’s students need courageous leaders who are willing to fight for needed reforms, instead of further entrenching the status quo.

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Media Mentions

All Media Mentions

Nevada families hungry for lower food costs

Opinion piece by Nevada Policy president, John Tsarpalas

A Brighter Tomorrow through Business Regulations

Nevada Policy article on business regulations in the state of Nevada

The Government Took Their Home. Now, a Family’s Lawsuit May Change Nevada’s Forfeiture System

Quote from Outreach and Coalition Director, Marcos Lopez.

Nevada Policy

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