Veteran journalist Ed Vogel wraps up the 2011 Nevada Legislative Session.
Vogel notes “Nevada delivered a balanced budget while taxes stayed the same” but can’t fail to note that both candidates for Nevada Governor last year promised that they would not renew taxes scheduled to automatically expire. The promise – which appears to have been what most Nevadans wanted, if the polls that drove the major candidates’ campaigns were right – was not kept.
We’ve all heard about Nevada’s “structural deficit.” It’s a theory that Nevada’s tax system is somehow inherently unstable, and hard to predict. Using false logic, advocates of the theory typically want to make our tax revenue “more stable” by increasing taxes and expanding the functions of government. It was central to the debate surrounding Nevada’s job-crushing 2003 tax hikes, and frequently studied and discussed by local government employees and contractors even while rapidly increasing property values generated double-digit annual increases in property tax revenue.
Check out this report/proposal from the Nevada Policy Research Institute. It concludes Nevada’s tax structure is, in fact, too volatile, and recommends fixes other than simply increasing taxing and spending. The study suggests a flat consumption tax encompassing all transactions, at a lower rate, would reduce volatility, and also recommends some common-sense measures to make Nevada local government unions more interested in the mission of government.
The Tax Foundation’s new analysis of the 2010 US Census shows that little has changed – Nevada remains one of the states most successful in shifting its tax burden off of residents and onto non-residents. The new data shows us ranked 49th in the amount of personal income consumed by state and local taxation, but 37th in the amount of total state and local government spending as a percentage of personal income.
Nevada’s citizens have been hurt in this national economy more than people in any other state. Here’s a report on the latest data from the US Bureau of Economic Analysis:
Nevadans saw their personal income decline more in 2009 than residents of any other state, a new report from the U.S. Bureau of Economic Analysis found.
Residents’ personal income in Nevada fell to $102 billion in 2009, down 4.8 percent from $107.1 billion in 2008. That’s not only the worst performance in the nation in 2009, it’s also the second-biggest decline among the states since 1969, the bureau said. Total personal income gauges the combined earnings of all residents in the state. Nevada has always had one of the country’s lower overall personal incomes, because it’s one of the country’s smallest states.
It seems a classic “killing the golden goose” scenario.
Nevadans’ personal income falls with the loss of jobs. Jobs are lost when employers close, move away, or shrink. Is the creation or elimination of The question that seems to drive many spirited discussions is how the imposition or removal of taxes impact the creation or loss of jobs.
One of the most piercing of all sounds emitted by government is the collective shriek of the workforce at the Nevada System of Higher Education. They claim they’re actually having to take pay cuts as a result of Nevada’s shrinking population (and tax revenue).
While someday it might be true, it doesn’t appear to be true heading into the spring of 2010.
Most everyone agrees that the professors and teaching staff are enjoying a healthy increase in their income this year. It’s the “classified” staff that’s gaining sympathy through doe-eyed looks and cooked books. As it turns out, they generally get an automatic annual pay hike that exceeds any proposed cost of furlough.
- 2009-2010 Employer Pay (employer pays 100% of retirement contribution)
- 2008-2009 Employer Pay
- 2009-2010 Employee/Employer Pay (Employee pays half of retirement contribution)
- 2008-2009 Employee/Employer Pay
- Classified Employee Informational PowerPoint: [BCN – TMCC] [UNR] [WNC]
- Archive: Recorded Furlough Informational Session at UNR
- How will the unpaid leave be calculated and affect my paycheck?
A: Your gross earnings will be reduced by either 2.3% or 4.6% depending on your election. Your base salary and retirement contributions will remain the same.
The Classified Salary step increases (the pay increase for being there an extra year, excluding increases for promotions and CPI increases) range from a low of 3.3% to a high of 4.6% per annual step. For some reason the highest paid get the biggest percentage step increases. The furlough plan reduced pay by 2.3% per year and the schedule reflects a very small pay decrease (about 0.5%).
The good news for the employees, then, is that they don’t have to work as much and their base pay is not affected; after the furlough is over pay pops right back where it was. The employees can elect to take the furlough at 2.3% a year for FY 10 and FY 11 or get full pay in FY 10 and take 4.6% furlough in FY11. So the furlough offsets most of the classified step pay increases. If someone was at the top of the salary scale, then they wouldn’t get a step increase so for those few employees there would be a small pay reduction (2.3%) to compensate for the fewer hours worked.
Secondly, as previously stated none of the tenured professors were required to take any furlough and thus saw zero pay reduction. The employee’s benefits are also not reduced, just their hours of work.
For an example, picking someone in the middle of the schedule (step 40-1) where the employer pays the full retirement: They were making $51,364.80 in 7/1/08. In 7/1/09 their salary would be $53,452.80 (having moved a step by being there another year). As a result of the furlough, they get approx. an extra hour off a week (taken as a periodic day off without pay). This would reduce the employee’s $53,453 salary by 2.3% to compensate for the time off, reducing her pay to $52,223.
The bottom line for this employee? She is making about $858 a year more than he was the previous year and had to work 2.3% less. This is not ideal, but I find it hard to see how it is some kind of tragedy – certainly not by private industry standards. The tenured profs naturally fair much better than this.
Note that this example is before the special session so it is possible (but not certain) the changes implemented by the Board of Regents following the session will result in a small pay decrease for this employee.
So while a few NSHE employees will see a very slight drop in pay in direct relation to not having to work as much, most will see an increase in pay for not having to work as much.
This is in direct contrast to the biased pablum served to us each day by our TV stations and newspapers. They see the taxpaying private companies as under-taxed and believe increases are needed to pay the public employees what they believe they are due, so they present their viewpoint as fact.
In defense of NSHE classified employees, they correctly point out that their increases over the past decade have trailed those of other government workers. Does that make them poorly treated, or their richer employees of other branches and agencies shameless pillagers of the public trough?
UNLV officials strutted their stuff about town tonight. They were smug since they succeeded in hushing down plans to invest $14-million into a new “practice” facility for the basketball team until the Legislature finished its special session on how to deal with tax revenue falling short of targets.
The UNLV student government members who spent University dollars driving to and shacking up in Carson City to plead poverty at the Legislature must be terribly embarrassed.
Driven by the highest local government (cities, counties) pay in the United States and moderated by less lucrative state-level worker pay, Nevada overall ranks sixth-highest government worker pay in a new study by the Las Vegas Chamber of Commerce.
Thanks Harry – for kicking Nevada’s second largest industry while it’s down.
PLAN has ranked Nevada’s elected officials. The average grade is a D. Here’s the full story.
July 13th, 2009
Congressman Tom McClintock offered remarks in Washington, D. C., on Friday to the Competitive Enterprise Institute and Pacific Research Institute that clearly illustrate why California is facing such a large fiscal mess. His beginning joke is so funny because it is so true:
“I know that everybody likes to poke fun at California – but I can tell you right now that despite all of its problems, California remains one of the best places in the world to build a successful small business. All you have to do is start with a successful large business.”
Here is the rest of the speech:
Laugh if you will, but let me remind you that when these policies finish wrecking California, there are still 49 other states we can all move to – and yours is one of them. I should also warn you of the strange sense of déja-vu that I have every day on the House floor as I watch the same folly and blunders that wrecked California now being passed with reckless abandon in this Congress.
We passed a “Cash-for-Clunkers” bill the other day – we did that years ago in California.
Doubling the entire debt every five years? Been there. Increasing spending at unsustainable rates? Done that. Save-the-Planet-Carbon-Dioxide restrictions? Got the T-Shirt.
To understand how these policies can utterly destroy an economy and bankrupt a government, you have to remember the Golden State in its Golden Age. A generation ago, California spent about half what it does today AFTER adjusting for both inflation and population growth. (more…)