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Supreme Court rules in Separation-of-Powers case

JULY 2020 UPDATE: NEVADA POLICY HAS FILED A NEW SEPARATION OF POWERS LAWSUIT!

CARSON CITY — Nevada’s Supreme Court has affirmed a lower court decision that NPRI’s Separation of Powers lawsuit, Pojunis v. State of Nevada, et al., was mooted by Sen. Mo Denis’ immediate resignation from his position with the Public Utilities Commission.

NPRI filed suit in November 2011 charging that Sen. Mo Denis was violating Article 3, Section 1, the separation-of-powers clause of Nevada’s Constitution, by simultaneously working in both the Executive and Legislative branches of Nevada government.

Within hours of being served with the initial Complaint in December 2011, state Sen. Mo Denis announced his resignation from his executive-branch employment with the Public Utilities Commission of Nevada. Despite the important principle at stake and well-established, applicable exceptions to the “mootness doctrine,” the Nevada Supreme Court declined to rule on the important constitutional issue at stake in the case. In affirming a lower court ruling that the case was mooted by Sen. Denis’ resignation, the Supreme Court also didn’t address the “substantial public-interest” exception to the mootness doctrine raised by the Plaintiff.

In response, Joseph Becker, chief legal officer and director of NPRI’s Center for Justice and Constitutional Litigation, released the following comments:

It is unfortunate that the Court failed to address the “substantial public interest” exception to the mootness doctrine when ruling in the Pojunis v. State of Nevada, et al case.

Today’s decision focused only on the mootness issue, rather than on the merits of the separation-of-powers issue raised by the case. That issue is important because of the frequency with which Nevada politicians have exploited the court’s silence to amass personal — yet unconstitutional — power by simultaneously holding positions in separate branches and because of a long history of conflicting attorney general advisory opinions on this issue.

While Sen. Denis’ resignation from his executive-branch job with the Public Utilities Commission was a de facto admission that he had been violating the separation-of-powers clause, Nevadans would have benefitted from a clear Supreme Court ruling affirming this key constitutional principle.

The CJCL appeal also raised the issue of whether moneys paid by the state to Denis while he was unconstitutionally employed by the Public Utilities Commission and at the same time exercising power as a state lawmaker should be repaid. The court said that plaintiff/taxpayer Pojunis lacked standing to make such a request “because, even assuming that taxpayer standing is available in Nevada, his request would unwind the state’s previous expenditures….”

Because this constitutional violation is still occurring, Becker said that NPRI and its Center for Justice will continue to remain vigilant on this and other constitutional abuses by federal, state, and local governments.

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NPRI seeks summary judgment against Governor’s Office of Economic Development

CARSON CITY — The Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation has just filed its motion for summary judgment in its legal challenge to the Nevada Catalyst Fund, administered by the Governor’s Office of Economic Development.

As detailed in the motion filed yesterday afternoon, the fact that state government subsidies violate the Nevada Constitution has even been acknowledged by GOED Executive Director Steven Hill during depositions.

CJCL Director Joseph Becker released the following statement after filing the motion with the First Judicial District Court:

That the Nevada Legislature has asked voters not once, not twice, but three times to allow the state to fund private corporations for economic development demonstrates that those legislatures were well aware that the Catalyst Fund is unconstitutional.

But, if there were any question as to that belief, GOED’s Executive Director Steven Hill admitted as much under sworn testimony. Hill stated that it would be unconstitutional for state government to give taxpayer money directly to private businesses.

Therefore, the court has but one issue to decide: whether the gifting of state funds to private companies becomes constitutional simply because the state uses intermediaries to disperse the funds. If the state can create political subdivisions and then delegate to those subdivisions authority it itself does not have, the Nevada Constitution becomes meaningless and lost.

In February, on behalf of plaintiff Michael Little, CJCL filed a complaint against GOED, against Hill in his official capacity, and against the State of Nevada over the Catalyst Fund —created by the State to dole out millions of public dollars to those  private corporations favored by GOED staff.  In April, the Nevada Legislature, at its request, sought and was granted intervention as an additional defendant in the suit. Through the unconstitutional program, Little, an alternative-energy entrepreneur, is compelled to subsidize his green energy competitor SolarCity, which received a $1.2 million subsidy.

Aside from the program being unjust in that it forces taxpaying business owners to subsidize their politically well-connected competitors, the Catalyst Fund is expressly prohibited by the Nevada Constitution.

Article 8, Section 9 reads:

Gifts or loans of public money to certain corporations prohibited. 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.

To date, the state has argued that the fund is permissible because the state itself does not hand out the money, but rather, state-created political subdivisions distribute state-provided funds to state-chosen businesses. When asked why GOED does not “just enter an agreement with the recipient directly,” Hill responded, “[w]e [GOED] feel that that’s unconstitutional.”

In 1992, 1996 and 2000, Nevada voters overwhelmingly rejected proposed constitutional amendments that would have allowed government loans or gifts to, or so-called “investments” in, private businesses.

“Because voters were unwilling to amend Nevada’s Constitution, politicians have decided to circumvent the law by creating pass-through intermediaries to dole out state subsidies,” Becker said. “If politicians are not held accountable to the Constitution, there’s no limit to what they could do in the future.”

The case against GOED could have far-reaching effects. In addition to determining whether the State of Nevada can gift public funds to private companies, protecting GOED would jeopardize constitutionally protected freedoms.

From the motion for summary judgment:

It is an illusion — one that seems to have the persistence of original sin—that prosperity can be attained by taking money from taxpayers and handing it to favored businesses.

The idea of government intervention to influence the composition of a country's output has long been derided by economists for breeding inefficiency, reducing competition, encouraging lobbying and saddling countries with factories producing products nobody wants.

The Center for Justice and Constitutional Litigation asks the court to:

  • Declare that all defendants, in operating the Catalyst Fund, are violating the Nevada Constitution;
  • Enjoin all defendants from continuing the Catalyst Fund program or any such program that subsidizes private entities under the guise of economic development or any such label.

Case documents:

The Center for Justice and Constitutional Litigation is a public-interest law organization that litigates when necessary to protect the fundamental rights of individuals as set forth in the state and federal constitutions.

Learn more about the Center for Justice and Constitutional Litigation and this case at http://npri.org/litigation/.

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NPRI comments on Economic Forum projections

LAS VEGAS — Responding to media reports that Nevada’s Economic Forum panel is projecting that the State of Nevada will collect $6.3 billion in tax revenue over the next two fiscal years, Victor Joecks, NPRI executive vice president, released the following comments:

Today’s Economic Forum revenue projections show why Nevada lawmakers do not need to consider tax increases during the 2015 Legislative Session.

The forecast of $6.3 billion in revenue for the next two-year budget cycle is the highest amount ever projected for Nevada. Combined with reversions of existing funds from agency accounts back to the general fund and other transfers, Nevada will be able to finance a spending plan comparable to its current $6.6 billion budget without raising taxes.

It’s important to compare the Economic Forum projection to Nevada’s historical levels of spending, not wish-lists from government bureaucrats.

The 2011 Legislature passed a budget of $6.2 billion, which included re-authorizing of supposedly “temporary” 2009 taxes the Sandoval administration had earlier pledged would sunset. Then, in 2013, lawmakers approved a general fund budget of $6.6 billion, which also included around $600 million in tax increases from the “sunset” taxes.

Joecks then pointed out the problems of comparing the $6.3 billion projection with the $7.7 billion in agency budget requests.

State agencies have again submitted spending wish lists — which normally allows them to cry that receiving less than they wished for is a dire “cut.” But receiving an increase smaller than you desired is not a cut. It’s just a smaller helping of “more” than you wanted.

The appropriate budget number with which to compare this $6.3 billion revenue projection is the $6.4 billion Economic Forum revenue projection from May 2013, which included around $600 million from the sunset tax increases.

State government need only tighten its belt by a tiny fraction — balancing its budget without raising taxes — to impress all the businesses across the country that are looking for fiscally prudent state leaders.

Rapidly rising costs for Medicaid and public-sector pensions are eating increasingly larger portions of the budget. That’s a phenomenon that will grow worse in the next few years unless lawmakers find a way to reverse the 2013 agreement with Gov. Sandoval to expand Medicaid eligibility rules and double the number of beneficiaries. Cost-effective ways of providing key services do exist, and it is incumbent on policymakers to seek them out. Responsible policymakers will actively challenge the institutional, knee-jerk momentum through which agencies seek to do what they’ve always done.

The new numbers from the Economic Forum also show the strength of Nevada’s revenue structure, said Joecks.

Nevada would benefit from genuine revenue-neutral tax reform — like the plan NPRI has proposed. But the forum’s numbers show that a tax increase couched as “meeting the needs of a changing Nevada” is entirely unnecessary.

In November 2012, Nevada’s Economic Forum projected the state would collect $5.8 billion in revenue. Two years later that number has soared by $500 million to $6.3 billion. Nevada already has a generally stable group of taxes, and lawmakers should avoid introducing more volatile tax instruments like a corporate income tax or fundamentally flawed taxes like margin or gross receipts taxes.

Joecks noted that NPRI recently published Solutions 2015, a sourcebook of information in over 50 policy areas, which includes dozens of specific ways to increase results while lowering spending.

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Solutions 2015 shows how legislators can make the lives of Nevadans better

LAS VEGAS — As Nevada’s new and returning lawmakers prepare to convene in Carson City for the 2015 Legislative Session, the Nevada Policy Research Institute has equipped them with a sourcebook identifying 12 areas in need of reform and the solutions outlining how to accomplish those reforms.

Today, the non-partisan, free-market think tank publicly released Solutions 2015: A Sourcebook for Nevada Policymakers. The 114-page publication — which will be sent to lawmakers today — expands on the 2013 version of the book and includes additional solutions to help the Silver State improve its failing schools, rein in ballooning costs associated with public employee pensions and unions, and cope with the ramifications of Obamacare.

“As a lawmaker, having accurate information helps me do my job better,” Assemblyman Wes Duncan said. “That's why the in-depth research in Solutions is so helpful. It provides background on what's happening, best practices from other states and recommendations to improve the lives of Nevadans. It's a valuable source of information.”

With voters’ overthrow of Democrats’ control of the Nevada Legislature, the 2015 class of legislators has a great opportunity to implement much-needed reforms and make Nevada a better place to live.

Here are four steps legislators can take to improve Nevadans’ quality of life:

1. Give parents the freedom to choose the best education for their child

Nevada voters made clear through their overwhelming rejection of the margin tax that they want schools to make better use of the money they already have in educating their children. Universal school choice, through programs like Education Savings Accounts, is the proven way to improve educational outcomes for all students without spending more.

No child is the same as another and choice enables educators to meet the diverse needs of every student, thereby leading to better outcomes for all. Nationwide, students in private schools score higher on standardized tests, and public school students that have alternative educational options also have higher test scores and graduation rates.

Private schools cost less than public ones, so equipping families with the freedom to choose alternative institutions would benefit students who take advantage of school choice, students who remain in public schools — and taxpayers.

2. Let taxpayers see into the collective bargaining process

Those who foot the bills in Nevada’s local governments should be privy to the back-room deals they make with public employee unions because those union contracts account for the largest chunk of municipalities’ budgets. Unfortunately, bargaining sessions with union leaders are specifically exempted from Nevada’s public meeting law.

By combining transparent bargaining with other collective bargaining changes — such as eliminating compulsory bargaining — Nevadans and local governments would have the ability bring public employee compensation in-line with private sector salary and benefits. When the public is able to see what’s happening with its money and has a voice in the process, it is more likely that public-employee contracts will reflect the community’s values.

3. Give workers a say in who represents them

While many workers value professional representation when it comes to negotiations with their employer, Nevada’s public employees are forbidden from seeking representation outside the approved union to which they are assigned by their job title; only the approved employee organization can bargain on that employee’s behalf.

Union security provisions violate workers’ freedom of association, as guaranteed by the First Amendment. Many government employees have never had the chance to choose the union representing them, as bargaining groups were approved decades before they began work. Putting the power back in the hands of employees would also make union officers more responsive to members.

4. Get a grip on debt by restructuring PERS benefits

If the new crop of legislators wants to improve the lives of Nevadans, it must rein in the accumulating public debts that are already pushing cities like North Las Vegas to the brink of insolvency . The unfunded liability — using Generally Accepted Accounting Principles — of the Nevada Public Employees Retirement System is around $41 billion, nearly seven times the annual payroll of all state and local governments participating in the program.

By moving public workers to a hybrid plan that includes a defined-contribution plan, legislators could reverse the growth in the system’s unfunded liability. Defined-contribution plans protect taxpayers from investment risk. Similar to a 401(k), taxpayers would contribute a set amount to employees’ retirement and the government workers would assume their own investment risk, as is the case with most private-sector workers. Utah created a hybrid plan in 2010 allowing workers to participate in either a defined-contribution or defined-benefit plan, but limiting taxpayer contributions in either case.

Employees would also benefit by gaining the freedom to take their retirement savings with them when they change jobs and keep those savings as a tangible asset that their children can inherit.

Accompanying the release of Solutions 2015, NPRI’s Director of Research and Legislative Affairs Geoffrey Lawrence released the following comments:

Solutions 2015 is the most comprehensive policy guide for Nevada legislators available and can serve them as a reference throughout their years in office. Each recommendation includes background information, documented research and supporting data. Every lawmaker, new and returning, should read Solutions to learn how they can improve the lives of their constituents and all Nevadans.

Republicans have a great opportunity to succeed where Democrats have failed, if they implement the intelligent solutions the Silver State so desperately needs. The reforms detailed in Solutions can guide new and experienced legislators who want to fix the problems created by years of rapid growth in government spending and tax rates without any commensurate improvement in the quality of core government services. 

A consensus has emerged, from left to right, within the academic community about the need for fundamental reforms to education and other policy areas, but entrenched special interests traditionally allied with Democrats — primarily public employee unions — have successfully blocked these reforms to date.  If Republicans follow the playbook outlined in Solutions 2015, they will be able to restrain the growth in government spending and provide tax relief to spur economic growth, all while improving the quality of education and other core government services in Nevada.

Find out all the ways Nevada Legislators can improve the lives of Silver State residents by reading Solutions 2015 in its entirety here: http://www.npri.org/docLib/20141105_Solutions2015.pdf

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Five ways government officials in Nevada are wasting your money

LAS VEGAS — Government officials and bureaucrats in Nevada have no problem wasting hundreds of millions of taxpayer dollars, so the Nevada Policy Research Institute is once again highlighting some of the most egregious — and sometimes illegal — cases of government squander in the Silver State.

This year’s edition of the biennial Nevada Piglet Book 2014 includes cases of the government playing favorites, excessive vehicle fleets, unaddressed inefficiencies, the ACA implementation saga and many other true stories of Nevada governments wasting residents’ hard-earned money.

Here are five ways Nevada wasted taxpayers’ money over the past two years:

  1. Sending unemployment benefits and welfare payments to dead people

Thanks to its failure to communicate with other agencies, Nevada’s Department of Employment, Training and Rehabilitation has been sending unemployment checks to the deceased. In one case, the department sent checks for 83 weeks after the recipient’s death, stopping only when the benefits had reached the limit of $33,000.

State prisoners and the deceased drew $241,000 in unemployment benefits in January 2012 alone. Two inmates collected $26,745 each during their incarceration, all the while having their housing, food, clothing and other needs met by the taxpayers of Nevada.

  1. Traffic division employees voiding citations after payment, pocketing the money

Audits reveal that employees with the Traffic Division at the Las Vegas Justice Court were able to improperly access the department’s computer system. Once in the system, at least one employee voided fines after they were paid by motorists and then pocketed the money. Auditors blame the court’s lack of controls for the theft.

  1. The botched, multi-million-dollar Silver State Health Insurance Exchange

Despite tens of millions of dollars worth of funding, Nevada and its contractor, Xerox, were unable to create a website capable of completing sales of the insurance mandated under the Affordable Care Act. Nevada’s Board of Examiners — Gov. Brian Sandoval, Secretary of State Ross Miller and Attorney General Catherine Cortez Masto — gave Xerox a $72 million contract in the summer of 2012 to create the online portal to sell Obamacare-compliant plans.

Though the contract required the website to be fully functional by October 2013, by April 2014 only a fraction of the 45,000 who had selected plans had succeeded in paying for them via the website. Some residents — like Larry Baisch, who had been making payments via the state website since November — were informed, when the time came to use their insurance, that they had none. Baisch, facing a $407,000 hospital bill because of the site’s systemic failure, is among residents who’ve launched a class-action lawsuit on behalf of victims of the state government and its selected contractor.

In May, amid increasing public understanding of the site’s epic failure, Nevada officials canceled their contract with Xerox and abandoned their plans for a state-run health exchange. In the future, the politicians now say, Nevada residents must purchase their insurance through the federal exchange website, HealthCare.gov — cited just last month by the federal Government Accountability Office for continuing “weaknesses” in its “security and privacy protections.”

  1. UMC’s failure to collect payments, while taking in $113 million from taxpayers

Clark County residents, via the county’s general fund, have long been subsidizing the University Medical Center, because the hospital fails to ensure customers pay their hospital bills and to safeguard cash receipts. Now we also know that, regularly, UMC doesn’t even ask customers to pay their bills.

UMC has had a lackadaisical approach to bill collecting, even though it received $113 million from taxpayers between 2011 and 2012. In 2014, the county subsidies of the hospital are set to run about $70 million. Already this year, UMC has taken out $45 million in emergency loans to address its cash-flow shortage.

  1. Parks employees padding their wallets by abusing OT pay

Auditors found that Las Vegas parks department employees have been padding their retirement benefits thanks to lax supervision regarding callback hours and overtime. One employee increased his annual take-home pay this way by $102,000 above his base salary of $71,000.

The audit revealed that department administrators failed to follow city procedures in approving the use of callback pay.

The Nevada Piglet Book 2014, which is published every two years, was produced by NPRI’s director of research and legislative affairs Geoffrey Lawrence and research assistant Cameron Belt. Lawrence issued the following remarks about this year’s edition:

In recent years, Nevada politicians and government bureaucrats have often claimed that they have cut government to the bone, made it as efficient as possible and have no choice but to raise taxes on already drained residents. The Piglet Book 2014 shows otherwise. This edition includes numerous examples of government waste that have continued for years. In many cases, government officials had been made aware of such waste and simply refused to address it.

The Piglet Book is particularly relevant this year as voters will be asked in November to approve a new business tax that will cripple job creation in the state, while enabling the government to continue a mindless waste of taxpayer money. Rewarding a wasteful bureaucracy with even more tax dollars won’t improve government performance. Indeed, it would only encourage more waste.

As always, it was impossible to include all the cases of government waste. The Nevada Piglet Book 2014 is a mere taste of the misuse of public funds that happens on a daily basis in Nevada. Many of the featured examples are laughable, but in reality, they provide a sad picture of a government that has been incredibly unaccountable to the people who fund it.

The Piglet Book is illustrated by NPRI’s senior vice president Steven Miller.

To find out about all the waste stories featured in the 2014 edition of the Nevada Piglet Book, please visit: http://www.npri.org/docLib/20141001_PigletBook2014.pdf.

Note: “Piglet Book” is a registered trademark of Citizens Against Government Waste and is used with permission.

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

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Over 700 school district employees exit Nevada State Education Association

Over 700 school district employees exit

Nevada State Education Association

LAS VEGAS — Over 700 teachers and support staff workers left their respective local affiliates of the Nevada State Education Association over the last summer, the Nevada Policy Research Institute announced today.

At least seven support-staff unions, including those in the Clark and Washoe County School Districts, have also fallen below 50 percent membership and would be decertified upon a vote withdrawing recognition by their local school board.

The decreasing number of union employees comes after NPRI undertook numerous efforts to let teachers and support staff employees know about their ability to drop union membership, but only by submitting written notice from July 1 to 15.

These membership statistics come directly from school-district officials in response to public records requests.

The Clark County School District saw the biggest drop in the number of teachers and support-staff workers belonging to their local union. At the close of the 2013-14 school year, the Clark County Education Association had 10,782 members out of 17,851 teachers, or 60.4 percent. At the beginning of the 2014-15 school year, CCEA membership had fallen to under 59 percent with just 10,637 of CCSD’s 18,033 teachers a member of the union. That’s a decline of 327 union members — with net membership falling 145, while the number of teachers increased by 182.

At the close of the last year, 5,642 of CCSD’s 11,225 support staffers were members of the Education Support Employee Association. At the start of this school year just 5,477 of CCSD’s 11,132 support staffers are members of ESEA, , a net decline of 137 members. With a membership of just 49.2 percent of workers, the CCSD board of trustees could vote immediately to withdraw recognition from ESEA according to NRS 288.160.3(c).

NSEA’s support-staff unions in at least six other school districts, including Washoe, Carson City, Douglas County, Elko, Humboldt and White Pine School Districts, have also fallen below the 50 percent threshold.

In the Washoe County School District, for instance, just 21 percent or 557 of its 2,658 support employees, are union members, which includes a decline of 96 union members over the summer. In the Elko County School District fewer than 20 percent of support staffers are union members, while support-staff union membership in Carson City is under 39 percent.

In early 2014, over 60.4 percent or 2,331 of the Washoe County School District’s 3,853 teachers were union members. In the fall of 2014, the Washoe Education Association had added seven new members, but the total number of teachers had increased by 109. On net, its union membership decreased by over 100 and the percentage of union membership among teachers fell to 59 percent.

“This summer, over 700 school district employees decided to leave the Nevada State Education Association,” said Victor Joecks, NPRI executive vice president. “Hundreds of these employees left — or never joined in the first place — after learning from NPRI that union membership is optional. NPRI is proud to have empowered teachers and support staffers with the information they needed.”

“This year alone, school district employees have given themselves a raise worth over $450,000 by keeping more of their salaries for their families instead of putting those dollars into the hands of union bosses.”

Joecks noted that, in total, NPRI’s information efforts have released over 2,150 teachers and support staffers from Nevada State Education Association membership and now saves school-district employees over $1.5 million a year. Over the last three years, NPRI’s efforts have helped school-district employees move over $3.2 million out from under the control of union bosses.

“In the last three years, CCEA membership has plummeted from 65 percent of teachers to less than 59 percent.” Joecks said. “In at least seven school districts, support staff union membership is under 50 percent. It’s time for school boards in these districts to withdraw recognition from NSEA’s local chapters and allow workers to form local-only unions, such as those that exist in states like Kansas.

“Teachers and support staff workers around Nevada have voted with their feet and showed their displeasure with NSEA. They’re tired of lousy customer service, high salaries for union officials and the union spending school district employees’ money on political causes those employees often don’t agree with.

“Until the NSEA views its potential members as customers to serve instead of cash cows to exploit, decreasing membership will continue.”

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The 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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