Director of Research Geoffrey Lawrence and Policy Analyst Anahit Baghshetsyan op-ed in the Reno Gazette Journal about short term rental regulations.
Director of Research Geoffrey Lawrence and Policy Analyst Anahit Baghshetsyan op-ed in the Reno Gazette Journal about short term rental regulations.
Nevada Policy’s Anahit Baghshetsyan’s informative commentary in the Las Vegas Review-Journal
The Las Vegas Review-Journal published an op-ed letter by Nevada Policy’s Policy Analyst, Anahit Baghshetsyan, about the future of film tax credits in Nevada.
Policy Analyst Anahit Baghshetsyan’s op-ed for the Las Vegas Review Journal about the New York City Mayor’s race and what it could mean for Nevada.
Read the op-ed here.
The Las Vegas Review-Journal wrote an article based on Policy Fellow Cameron Belt’s piece about a need for changing regulations in Nevada. Read the article here.
The Reno Gazette interviewed Policy Analyst Anahit Baghshetsyan about the changes to Nevada’s home insurance law. Read the full story here.
The Las Vegas Review Journal cited Nevada Policy’s research in its article about Governor Lombardo’s vetoes this legislative session.
The Review-Journal’s editorial quotes Research Analyst Anahit Baghshetsyan.
Article written based on Nevada Policy’s 200 Boards report
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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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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:
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.
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.
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.”
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.
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.
Read more:
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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
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
LAS VEGAS — Nevada’s new Tesla deal makes “utterly no sense,” says NYU Global Research Professor Richard Florida, writing yesterday on The Atlantic’s CityLab website.
Florida, director of the Martin Prosperity Institute at the University of Toronto and a senior editor at The Atlantic, questions both the economic impact of the new Tesla venture in Nevada and also the wisdom of Gov. Brian Sandoval’s call for a special session to provide Tesla with $1.3 billion in tax breaks and transferable tax credits.
Florida’s article is titled “Reno Won Tesla's Gigafactory. Was It Worth It?” In it, the professor argues that government officials have dramatically overstated the economic impact of Tesla in Nevada. He cites, among others, Martin Kenney, a University of California, Davis, professor and expert on high-tech factories, who predicts the Tesla factory would at most employ 3,000.
Florida than looks at the “multiplier effect” that government officials trot out to transform an estimated 6,500 jobs at the Tesla factory into more than 22,000 jobs in the economy. Florida writes:
The state of Nevada says the factory will ultimately create 22,000 jobs, after the multiplier effect of the Gigafactory is taken into account. That's a multiplier of more than three times the number of direct jobs. A smaller multiplier — say around 1.5 — is generally thought to be more in line with something like a high-tech battery plant…
Combining 3,000 jobs at the factory with a multiplier of 1.5 means the Tesla factory would produce, directly and indirectly, only 4,500 jobs. Presuming state lawmakers approve the proposed $1.3 billion in tax abatements and transferable tax credits, each direct job would be costing taxpayers over $365,000 in lost tax revenue. Even if indirect jobs are included in the calculation, each job still would cost Nevada over $240,000.
Florida argues that Tesla is unlikely to create an industry hub in Nevada, noting that trade-offs always accompany economic growth. He describes a scenario where Tesla, backed by government-guaranteed advantages, would kill off thousands of currently existing high-paying jobs:
The spillovers are limited, Kenney notes, by the simple fact that a battery plant, however advanced its technology, is much more self-contained than an automotive assembly plant, which forms the hub of an extensive supply chain. “There is little high-tech benefit in terms of things like research,” Kenney writes in an email. And since there is no real supply chain for the plant in the region, it is likely that a lot of money will leak out of Reno. Thomas notes that if the plant is ultimately successful, and electric cars take over our roadways, there will be job losses at traditional auto companies, where conventional gasoline-powered engines are built. “Therefore,” he writes in an email, “the net benefit to the country will be less than 6,500 jobs.” Those lost engine plant jobs would almost certainly be higher paying ones than the $22 an hour jobs the Gigafactory will create.
In view of this article, Andy Matthews, NPRI’s president, released the following comments:
Richard Florida’s article raises many important questions regarding the economic impact of $1.3 billion given to Tesla in targeted tax breaks. This new analysis also describes a scenario where Tesla’s factory produces just 4,500 jobs directly and indirectly — not 22,000 as GOED claims. In that scenario, taxpayers would be handing out over $240,000 for each job, hardly a good deal for the state.
Lawmakers should not just immediately accept the economic impact numbers put out by the Governor’s Office of Economic Development, Instead, they should conduct a thorough examination of both the best- and worst-case scenarios. Credible independent economic analysis needs to be done on this deal before lawmakers vote on any tax breaks for Tesla.
Life is full of tradeoffs, and taxpayers and lawmakers need to know what the opportunity costs are in this situation. That’s not something lawmakers can accomplish in just a one- or three-day Special Session — especially for targeted tax breaks of this magnitude.
If lawmakers wanted to give Nevada’s entire economy a boost, they should lower Nevada’s sales tax across the board.
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LAS VEGAS — NPRI President Andy Matthews today sent the below open letter to Gov. Brian Sandoval and the members of the Nevada Legislature regarding a potential special session and subsidies for Tesla. The letter urges Gov. Sandoval and lawmakers to avoid unconstitutional subsidies that would leave the state exposed to the potential for legal action.
Andy Matthews
President, Nevada Policy Research Institute
7130 Placid St.
Las Vegas, NV 89119
September 4, 2014
Hon. Brian Sandoval
Governor, State of Nevada
101 N. Carson Street
Carson City, NV 89701
Re: Open letter on constitutional implications of reported subsidies for Tesla
SENT VIA ELECTRONIC MAIL
Dear Gov. Sandoval,
It was with genuine excitement that we at the Nevada Policy Research Institute and many other Nevadans yesterday learned that Tesla had decided to build its new battery factory in Nevada. We are no doubt in agreement that private business investment in a free-market economy provides benefits to a wide range of stakeholders.
In America, business owners or investors risk their own money with the goal, but not the guarantee, of creating a return on investment. The result is that Americans have new jobs available to them, and state and local governments receive additional tax dollars to provide essential services and lower tax rates.
The biggest winners from this free-market process are the very consumers who ultimately determine which companies will succeed or fail.
Thus, it was with the antithesis of excitement that we, along with many other Nevadans, read news reports that you are preparing to call a special legislative session next week to fund this proposed private factory with massive government subsidies.
In contrast to the profound intelligence operating within free markets, government attempts to pick economic winners and losers are inherently benighted and unfair — as well as unconstitutional in Nevada.
Yes, the promise of a company investing up to $5 billion in Nevada is very appealing. But betting hundreds of millions of taxpayer dollars on an unproven enterprise is extremely risky. Just today, for example, the Wall Street Journal reported that, surprising the conventional wisdom, demand for electric and hybrid cars is declining, driven down by multiple factors. And, of course, in just the last few years, taxpayers lost hundreds of millions of dollars after federal politicians gave handouts to green-energy companies such as Solyndra and Abound Solar.
Government subsidies make taxpayers assume the risks of business ventures while being deprived of the financial rewards that willing stockholders receive for bearing those risks.
Even when government-subsidized businesses do return some nominal profits, hidden behind those profits are always the unseen opportunity costs imposed on everyone else.
At root, it is fundamentally unjust for government to use its powers to financially reward the “connected” at the expense of those not so well connected. This is why Nevada's founders expressly prohibited state subsidies to private companies in Article 8, Section 9 of Nevada's Constitution. It reads:
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.
Thus, to use government to designate a few financial winners — and many financial losers —undermines the rule of law. What is needed is a single set of rules for entrepreneurs: a common law. To breach that principle — especially when calling a special legislative session for the benefit of one company — is to foster a system where the politically powerful are even more advantaged over everyone else.
That is not the America which has prospered in a free-market economy. That is a country where companies will increasingly ignore consumers and increasingly shift their focus to pleasing politicians.
Government officials should be careful to avoid undermining the fundamental principles of our government and economy — such as the rule of law and the separation of powers — in pursuit of short-term and often hypothetical economic and political gains. No business is worth sacrificing the principles that have built America’s economy and that allow innovative small-business owners to compete on a level playing field against larger companies.
Nevada citizens understand the importance of the state constitution’s prohibition on government giving money to private companies. Three times in the last 25 years, the Legislature asked voters to soften this prohibition, and each time the electorate rejected these efforts by wide margins.
As you know, sometimes elected officials, knowingly or unknowingly, pass laws violating the Constitution and force organizations, like NPRI, to bring litigation in order to defend these fundamental principles.
For instance, in 2011, lawmakers passed and, as Governor, you signed a bill creating the Catalyst Fund, which provides state subsidies to a select few private businesses.
Earlier this year, the Nevada Policy Research Institute’s Center for Justice and Constitutional Litigation filed suit against the Governor's Office of Economic Development (“GOED”) and the unconstitutional Catalyst Fund for violating Article 8, Section 9. That suit is seeking to prevent GOED from giving over 1 million taxpayer dollars to SolarCity, which, incidentally is also owned by Tesla's Elon Musk.
As no details have been officially released as of yet about the incentives for Tesla, and with the official announcement coming this afternoon, we wanted to share these reasons why government subsidies are poor public policy. Further analysis from NPRI will be forthcoming on that aspect of this issue, but I urge you not to propose unconstitutional government subsidies that would leave the state exposed to the potential for legal action.
NPRI will be available to assist you and the Nevada Legislature to evaluate any proposals that may be passed in a special session to ensure that they meet constitutional muster.
Governor, even when we've disagreed, we at NPRI have always respected the enthusiasm you've brought to the job of leading our state. Nevertheless, the rule of law must always be adhered to and defended vigorously.
Sincerely,
Andy Matthews
President, Nevada Policy Research Institute
cc: Nevada Legislature
LAS VEGAS — Responding to today’s report that Gov. Brian Sandoval is preparing to call a special session and offer Tesla huge subsidies and tax abatements for a private battery factory in Northern Nevada, Geoffrey Lawrence, NPRI’s director of research and legislative affairs, released the following comments:
News that Nevada’s current governor will ask Nevada lawmakers to approve a corporate-gift package for Tesla should concern all Nevada taxpayers and entrepreneurs alike. It’s especially alarming when the proposed giveaway is so large that even the governor acknowledges that it outstrips the existing authority to subsidize private businesses granted to him by the 2011 legislature. Even that generous authority oversteps a strict constitutional ban on corporate gifts.
It’s exciting when any company chooses to do business in Nevada, so it’s puzzling why the governor would go to such extraordinary lengths to promote the business interests of one wealthy investor, Elon Musk. Governor Sandoval has already channeled more than $1 million to another of Musk’s firms, SolarCity, and now seeks greater authority to bestow more millions on the Californian. Why should Elon Musk’s firms enjoy advantages that Nevada’s native entrepreneurs don’t receive and for which they must ultimately foot the bill?
Very few Nevada taxpayers will be able to afford the high-end luxury cars manufactured by Tesla Motors. According to automotive reviews, a 2014 Tesla Model S has an MSRP ranging between $69,900 and $93,400. In essence, even low- and middle-income Nevadans would be asked to subsidize the spending habits of wealthy consumers.
Why would lawmakers want to take from poor and middle-class families to subsidize a billionaire making cars for millionaires?
While advocates will predictably claim a public benefit for the subsidy in the form of greater employment opportunities, Nevadans should be careful to consider the trade-offs involved. Subsidies allow firms to create negative value by consuming more in labor and other productive inputs than can be justified by the value of the final product. Nevadans can realize far greater benefit by leaving those productive resources available to entrepreneurs whose products compete on their own merits.
Lawrence added that aside from the many economic and principled reasons to avoid state subsidies, the Nevada Constitution already prohibits taxpayer subsidies to private companies.
“While the specifics of what Governor Sandoval seeks on Musk’s behalf have yet to be made clear, the state constitution specifically prohibits politicians from handing tax dollars to private companies,” he said.
Specifically, he noted, Article 8, Section 9 of the Nevada Constitution states:
The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.
Lawrence observed that NPRI’s Center for Justice and Constitutional Litigation has already sued the Governor’s Office of Economic Development for violating the constitution’s gift ban to prevent GOED’s gift of over $1 million to SolarCity.
CJCL brought the lawsuit on behalf of Mike Little, a native Nevada entrepreneur who operates his own renewable energy enterprise and who has seen his own tax dollars transferred to Musk, his competitor, through Sandoval’s office.
Litigation in that case is ongoing.
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