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Economist: GOED’s $1.2 million subsidy to SolarCity provides ‘No net benefit to Nevadans’

CARSON CITY — An expert-witness report just filed in a constitutional challenge to the State of Nevada’s “Catalyst Fund” says taxpayer-dollar subsidies like the $1.2 million the state is attempting to give SolarCity, Inc. “do not provide any net benefit to the state or to its citizens.”

Dr. Randall G. Holcombe — DeVoe Moore Professor of Economics at Florida State University — made the comments and is an expert witness in the lawsuit brought by NPRI’s Center for Justice and Constitutional Litigation (CJCL) to defend the Nevada Constitution’s ban on the gifting of taxpayer funds to private corporations.

Article 8, Section 9, of the Nevada Constitution 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.”

Dr. Holcombe is the author of 15 books, more than 150 peer-reviewed articles published in academic and professional journals, and more than 30 articles and reports for think tanks and public policy organizations.  He has testified before committees in the U.S. Congress and the Florida legislature.

CJCL is representing a clean-energy entrepreneur, Michael Little, whose competitor, SolarCity, has a commitment from the Governor’s Office of Economic Development of a $1.2 million taxpayer-funded subsidy. 

The lawsuit was filed by CJCL on Feb. 19, 2014. On March 24, The Nevada Legislature filed a motion to intervene in the case. Permission to do so was granted by the Court on April 11, 2014.

Attorney Joseph Becker, director of NPRI’s Center for Justice and Constitutional Litigation has characterized the Catalyst Fund as — in addition to being patently unconstitutional — being “fundamentally unjust, since it makes a business owner subsidize his competition.”

“Today’s report,” he continued, “provides additional expert reasons as to why the Court should end these taxpayer-funded subsidies.  History has shown that companies receiving government handouts — like Solyndra, Abound Solar, Fisker and ThromboVision — often fail, personally enriching the politically connected but wasting hundreds of millions of taxpayer dollars. This history is reinforced by Dr. Holcombe’s Expert Report.”

Becker noted that, for decades, the Legislature acknowledged that Article 8, Sections 9 and 10, of the Nevada Constitution prohibited the state from providing subsidies to private businesses. In recognition of the clear words of the Constitution, the Legislature even tried three times — in 1992, 1996 and 2000 — to amend the Constitution to allow subsidy schemes similar to the Catalyst Fund.

Voters, however, overwhelmingly rejected those proposals.

Discovery in the case will continue through early November.

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 study: Margin tax would kill 3,600+ jobs, have domino effect on thousands of Nevada jobs and families

LAS VEGAS — Over 3,600 jobs will be lost if voters approve Question 3, commonly called the margin tax, this November, a study released today by the Nevada Policy Research Institute finds.

The new study, entitled The Fiscal and Economic Impact of Establishing a Margin Tax for Nevada, reports sophisticated econometric modeling of how the margin tax most likely would impact the Silver State economy.

Both private-sector and overall employment would be lowered by the margin tax, the model finds. Investment in Nevada would also be reduced.

Authored by Paul Bachman, Michael Head and Frank Conte of the Beacon Hill Institute at Suffolk University, the report also sees the margin tax decreasing Nevadans’ real disposable household income each year by $240 million.

“The margin tax isn’t just bad for business,” said NPRI President Andy Matthews. “It would also destroy the jobs of thousands of hard-working Nevadans.”

To illustrate the jobs that would be lost, NPRI set up 3,610 dominoes in a display that spelled out the phrase “Question 3 kills jobs.” Matthews, with “Q 3” written on his finger, used his finger to topple a single domino, demonstrating how jobs would fall like dominoes if voters use their fingers to vote for Question 3.

“Today we watched 3,610 dominoes fall — representing the jobs that Nevada would lose, should the margin tax become law,” Matthews said.

“But these jobs — of individuals and families — are not just statistics. These are real families who will struggle to pay rent or their mortgage, or to put food on the table. Their children could well be marked forever by the family stress resulting when their moms and dads lose their jobs.

“It only took the simple push of a finger to knock down these 3,610 dominoes,” Matthews said. “Likewise, for the voter to push the “Yes” button in support of Question 3 would be akin to voting to knock down the jobs of more than 3,600 Nevadans, stressing their families and reducing the opportunities available to their children.”

To determine the impact that implementation of the proposed margin tax would have across the entire Nevada economy, the econometric study used Beacon Hill’s Nevada State Tax Analysis Modeling Program (NV-STAMP®). The program used five years worth of data to simulate the consequences of the new, higher taxes flowing through the Silver State’s economy.

The loss of jobs, investment and disposable income would also affect other tax sources. Local governments should expect to operate with $8.5 million less, were the margin tax to pass.

“The creation of a margin tax would result in fewer individuals deciding to invest in starting or expanding businesses in Nevada, thus decreasing investment and employment, incomes and retail sales,” the study’s authors state. “This decline, in turn, drives sales, property and other tax collections lower.”

Under the ballot measure, businesses that bring in at least $1 million in gross revenue would be subject to a 2 percent tax on each dollar brought in, minus some deductions. Because the tax is on revenue, not profits, even struggling businesses or those losing money will be forced to pay.

Though supporters claim the tax is not applicable to small business, simple math shows otherwise. For example, a mom-and-pop restaurant would only need to bring $2,739.73 through its registers each day to be subjected to the tax.

Proponents of the tax claim that Nevada needs to spend more on education, but numerous studies have shown little to no correlation between spending more on education and student performance. Moreover, Nevada already spends more on education than most of its neighboring states — while getting worse results.

To address the real sources of the state’s chronically inferior public-education results, NPRI earlier this month released a study titled 33 ways to improve Nevada education without spending more. It details many proven innovations that could make Nevada’s broken education system truly superior, but which the teacher union has successfully fought, tooth and nail, in the state legislature.

“Until now, the margin-tax discussion has primarily focused on the businesses it would hurt. But this study makes clear the tax will have just as much, if not more, effect on the individual residents, employees and families of Nevada,” Matthews said. “The tax is burdensome, complicated, void of transparency and, worst of all, it would do irreparable harm to thousands of Nevada families.”

Robert “The Domino Wizard” Speca created the domino spectacle for NPRI, which included special effects such as the Tarzan Swing, the “Bahama Tom Inverted Cascade Slide for Life” and “Up the ladder, walk the plank.” Speca originated the Guinness Book of World Records category for Domino Toppling, and he has held the World Records five times.

The study, The Fiscal and Economic Impact of Establishing a Margin Tax on Nevada, can be accessed here: http://www.npri.org/docLib/20140722_BeaconHillmargintaxstudy.pdf.

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New NPRI Report: 33 ways to improve Nevada education without spending more

LAS VEGAS — There are dozens of ways to increase student achievement in Nevada without enacting job-killing tax increases or even spending one dollar more, finds a new study from the Nevada Policy Research Institute.

The report, entitled “33 ways to improve education without spending more,” details how school choice and other innovative educational options can lead to better outcomes in the classrooms by more effectively using the money Nevada already spends on education.

Authored by NPRI deputy policy director Geoffrey Lawrence, the study digs into why, despite decades of increased education spending, Nevada’s educational results have failed to improve and what to do about it.

“Better education in Nevada is one of the top priorities for most parents, taxpayers and lawmakers,” said Lawrence. “Unfortunately, a disconnect exists between increasing education spending and increasing education performance — and not just in Nevada, but nationwide.

“In response to this disconnect, an education reform movement has arisen and produced dozens of ways to cost-effectively increase student achievement. Our study reviews the literature and the evidence concerning alternative education policy and offers specific suggestions that will improve education for young Nevadans — and do so with existing tax dollars.”

The study is especially timely, because the Nevada State Education Association is yet again pushing for a large tax increase — this one called “the margin tax” — to funnel even more taxpayer dollars into the state’s current, dysfunctional, education system.

“Although state taxpayers have spent ever-increasing billions of dollars on that system over the last several decades,” said Lawrence, “the educational achievement of Nevada’s students has actually decreased.

“While the need to improve Nevada’s educational system is obvious to all, spending more money on a broken and rigid system is obviously a waste.

“That’s why this study offers specific and proven suggestions to increase student achievement,” he said.” These reforms — from rewarding the best teachers and removing the worst teachers to enacting school choice to ending social promotion — are ideas that are working in other states.”

Before laying out the ways that Nevada can increase student performance without spending more, Lawrence explores the history of public education, student performance in the Silver State and the evolution of the education-reform movement.

The ideas of that movement — examined in detail in the analysis — fall generally into four categories:

  • Strategies for improving educator effectiveness
  • Strategies for improving the available talent pool of educators
  • Strategies for exposing public schools to market forces
  • Strategies for better utilizing technological resources to improve student outcomes

Research has shown that the talent level of a child’s teacher is more important to a student’s academic development than any other school-controlled factor, demonstrating the need for policies that put effective educators into the classroom and remove the non-effective. Alternative routes to licensure, longitudinal data tracking and generous merit pay programs for the top performing teachers are among the reforms that other states are using to improve teacher quality.

“The education reform movement has been met with great resistance by government bureaucrats, union officials and other entrenched interests because the movement directly challenges some of the traditional practices in public education,” Lawrence said. “These groups have responded to this challenge by launching an intellectual counter-reformation that would only broaden and expand the current, dysfunctional system.”

Lawrence also lays out the case for school choice, explaining:

The lack of competition in Nevada’s education system is a fundamental problem. Public schools are entitled to taxpayer support regardless of how effectively, or ineffectively, they educate students. This lack of accountability allows administrators to use public education resources inefficiently. Empowering parents to pick the school that best meets the needs of their child will force school administrators to allocate resources in the most cost-effective manner because waste cannot be tolerated if parents can simply take their business elsewhere.

Lawrence noted that at $9,650 dollars per student, Nevada taxpayers contribute more to the state’s public education system than their counterparts in a majority of neighboring states, yet Nevada students perform lower on standardized tests.

The political Left in Nevada, he said, is either unfamiliar with or intentionally ignores the decades of academic research into what makes schools successful and sophomorically asks fiscal conservatives, “Where’s your plan is to fix education?”

“Well,” said Lawrence, “here it is — in one document.”

For decades, he said, the state has continued to try the prescriptions of teacher unions and other entrenched interests and the result has been tens of thousands of academically damaged students.

“For the sake of Nevada’s kids, Nevada’s lawmakers should redeploy the state’s already-ample existing revenues and implement these proven school reforms right away,” said Lawrence.

The full report, “33 ways to improve education without spending more,” is available at: http://www.npri.org/docLib/20140708_NPRIStudy-33waystoimproveeducation.pdf

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Nye County Commission to USF&W: Return church camp’s water and compensate church for damage

PAHRUMP, NEVADA — The Nye County Board of Commissioners unanimously endorsed a resolution Tuesday supporting Pastor Victor Fuentes and his Ministerio Roca Solida (Solid Rock) Church camp in its fight to restore the camp’s surface water that was illegally taken by the U.S. Fish and Wildlife Service.

The resolution, passed unanimously, demands, “That the U.S. Fish and Wildlife Service promptly return the waterways to their prior state and flow, as well as promptly and expeditiously compensate the church camp for damage done to their camp.”

The camp, Patch of Heaven in Nevada’s Amargosa Valley, suffered significant damage in 2010 when the U.S. Fish and Wildlife Service recklessly and illegally erected a dam and relocated a stream that has historically flowed through Patch of Heaven. Shortly after being rerouted, the stream overflowed the federal agency’s poorly engineered new banks during rain showers — sending destructive floods of mud and muddy waters through the camp and causing over $86,000 in damages.

In response to the news, Joseph Becker, director of NPRI’s Center for Justice and Constitutional Litigation, which is representing the church in its legal case against the U.S. Fish and Wildlife Service, issued the following statement:

We applaud the Nye County Commission for unanimously condemning the U.S. Fish and Wildlife Service for the harm it has caused to Patch of Heaven. Federal bureaucrats illegally took the baptismal waters of a church camp and caused over $86,000 in damages to that camp when their poorly rerouted stream overflowed its banks and flooded Patch of Heaven.

Federal entities collectively control over 98 percent of the land in Nye County, something that the commissioners said, “Contributes to an environment of federal overreach and abuse of private property rights and leads to the diminishment of due process and rights granted to Nye County’s residents under the United States Constitution, Bill of Rights, and Nevada Constitution.”

This Resolution confirms what was learned during discovery, that USF&W failed to comply with FEMA regulations as administered by Nye County.  The federal government’s failure to follow its own regulations violated Solid Rock’s procedural due process rights and makes it negligent per se, hence, liable to the church for the flood damage.

Ironically, Pastor Fuentes came to the United States to escape oppression by an unaccountable government. In 1991, he swam seven miles from near his home in Santiago, Cuba, to Guantanamo Bay and gained political asylum. Fuentes likens the USF&W bureaucrats he's encountered in Nye County to those oppressive Cuban government officials he risked his life to escape.

After more than six months of factual discovery, both parties have filed and are responding to dispositive motions in the case, after which the presiding judge will rule on those motions.

More information:

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 sends mailers to over 9,000 teachers notifying them of their opt-out rights

LAS VEGAS — In its ongoing commitment to notify Nevada teachers of their right to drop teacher union membership from July 1 to July 15, the Nevada Policy Research Institute sent out over 9,000 paper mailers over the weekend, reaching Clark County educators directly.

The mailers alert Clark County teachers of their right to leave the Clark County Education Association by informing the union, in writing and during the first two weeks of July, of their decision to leave. Reasons teachers commonly cite for leaving the union were also included.

The direct mailing is the latest in NPRI’s efforts to empower teachers by letting them know about their ability to opt out of union membership. In June, the Institute launched a billboard campaign in southern Las Vegas, including electronic and stationary messaging aimed at reaching teachers while on the road. Last week, NPRI also revealed that the Clark County School District was censoring teachers’ emails by blocking NPRI’s electronic communications efforts.

NPRI Executive Vice President Victor Joecks issued the following statement about the mailers.

By their words and their actions, teachers have made it clear that they want to know about their ability to opt out of union membership. The Nevada Policy Research Institute is pleased to continue our work empowering teachers by letting them know about the limited window they have to opt out.

In just the last two years over 1,200 teachers in Clark County and over 1,450 throughout the state have decided to leave the teachers union after learning they could leave. While CCSD tries to keep teachers in the dark through its censorship, and while the union makes it as inconvenient as possible to leave the union, we believe teachers should be able to make the decision about union membership that’s best for them.

These mail pieces are yet another means through which teachers can learn how to exit the CCEA and also why so many other teachers have already done so.

For teachers who do choose to leave the union, NPRI has provided them with pre-written opt-out letters, which can be found here.

More information: http://www.npri.org/docLib/20140701_94369658-CCEAmembershipoptout_Mailer3.pdf

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Big Brother: CCSD intercepts emails to teachers, prevents educators from learning of their rights

LAS VEGAS — The Nevada Policy Research Institute’s annual effort to alert teachers of their right to opt out of union membership from July 1 to July 15 has uncovered something unsettling: The Clark County School District is intercepting and blocking emails sent to teachers, thereby preventing them from learning of their rights.

On June 2, NPRI emailed over 12,000 CCSD teachers regarding their right to leave the union, yet only a nominal amount of emails were opened. In previous years, over 2,000 individuals have opened similar emails. Also, when NPRI asked a sampling of teachers in the district if they had received NPRI’s communications, they had not even though NPRI had sent them an email message.

Based on NPRI’s internal testing and consultation with an external internet provider, evidence shows that the Clark County School District — which has a history of trying to hinder email communication between NPRI and teachers — has blocked NPRI from communicating with its teachers via the public, taxpayer-funded email addresses.

In response to the discovery, NPRI President Andy Matthews issued the following statement

It is outrageous that a government agency would censor communications between teachers and a private group. It also raises First Amendment concerns, because the Clark County Education Association, another private organization, is able to email teachers.

It’s wrong for a government agency to use taxpayer dollars to pick and choose who communicates with government employees.

Communication with a government employee shouldn’t be reserved exclusively for those approved by a government agency.

Over the past two years, over 1,200 teachers in Clark County have left the CCEA as a result of NPRI’s opt-out campaign, and now CCSD is aggressively preventing teachers from being able to make their own decisions about union membership. NPRI’s teacher union opt-out campaign is about providing Nevada educators with the information they need and deserve to make an informed decision.

The fact that CCSD would intentionally intercept emails intended for its employees should be maddening for its teachers and deeply concerning for the public that pays the district’s bills.

CCSD Chief of Staff Kirsten Searer explained in an email statement that, “We have taken action to protect our employees from spammers in order to ensure that our district email system remains an effective communication system for our teachers.” Searer did not say what criterion is used to determine which email addresses qualify as spam; why NPRI’s single email to a portion of teachers was blocked; or why the teacher union is allowed to email tens of thousands of CCSD teachers without being considered spam.

Shortly after CCSD blocked NPRI’s email communications, NPRI unveiled numerous billboards in Southwest Las Vegas to make teachers aware of their right to leave the CCEA from July 1 to July 15.

“Hard as CCSD may try to prevent teachers from learning of their rights, it cannot prevent educators from seeing the message on billboards,” Matthews said. “We at NPRI believe our teachers are smart enough to choose for themselves whether they wish to remain in the CCEA, and we are doing everything within our power to provide teachers with the information necessary to make this important decision.”

Members of the CCEA can only opt-out of membership by notifying the union, in writing, from July 1 to July 15. Members can access pre-written opt-out letters here. All other Nevada teachers can find opt-out letters here.

The Nevada Policy Research Institute is currently suing CCSD over its refusal to release the taxpayer-funded email addresses of its teachers, which are considered public record.

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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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