Nevada Government Economist Tells Half Truths

This morning’s Las Vegas Sun featured a guest column from state government economist Elliot Parker. In his column, Parker lays out his case for more tax hikes, which will be required to hire more government employees and give them higher wages. You can read his column here.

Parker’s column essentially says Nevada’s people have been terribly chinzy when it comes to funding government, particularly as compared to other states. It would be a mistake, he implies, to not raise taxes and further expand government.

As an economist, government or not, Parker should be embarrassed by his intellectual dishonesty.

He writes:

According to the most recent version of the Statistical Abstract of the United States, only 5.5 percent of Nevadans work for the state or local governments, the lowest share in the 50 states by far.

This is probably a true statement, although the Statistical Abstract of the United States is very large, and Parker should offer a more detailed attribution. However, it presents only one half of what’s wrong with Nevada’s structure of government.

The very same authority (the Statistical Abstract of the United States) also says our government employees are paid the six highest of all states. Here is the Statistical Abstract of the United States. Table 448 – here is a direct link – column M details average earnings in 2006, the most recent year reported. [Subsequent correction: column M details local government only. Column J details state government, where Nevada ranks sixteenth, still above the national average.]

These wage numbers – in which Nevada ranks the sixth highest state – do not reflect Nevada’s exceptionally generous benefits package.

All of Nevada’s government employees participate in perhaps the only “defined benefit” retirement plan found in the entire state, public or private sector. And for local government and school employees in Clark and Washoe County¬† – well over half of all state and local government employees in Nevada – taxpayers foot the entire bill.

To put it in terms that most taxpayers can understand, where we lose 6.2% of our paycheck to fund social security, our government employees do not. So, for a given wage, they take home a bigger paycheck. (The rest of Nevada government employees, by the way, fund half of their own retirement plans out of their paychecks but it’s over 10% rather than 6.2% – on the other hand, they get alot more retirement income and retire much younger than the rest of us.)

If you factor in how government retirement works in Nevada compared to the five states that outrank us in average government pay, we’d likely rank higher than sixth.

Nevada’s “structural deficit” lies in giving government unions too much power, which has resulted in our having the fewest government employees per thousand residents (dutifully reported by Parker) who are paid at or near the top of America’s government pay scale (incredibly omitted by Parker).

Parker next rambles down the taxes-per-capita path without attributing his statistics. For example:

Adding in spending by local governments, Nevada ranks 48th in government spending as a share of income.

Since the Statistical Abstract of the United States does not explicitly calculate this, he owes us a peek at the bar napkin he scratched his out on.

Here’s mine:

Statistical Abstract of the United States, Table 424, column B has total revenue by state for 2005. Table 12, column AK, has 2005 population estimates, which appear to be overstated for Nevada. Nevertheless, you can put the two of those tables together to calculate tax revenue per person. Nevada ranks 29th, at $7,868 per person.

Since this clearly does not support the “chintzy Nevadans” refrain, and since Nevada’s historically modest government has not surprisingly produced a society with a robust economy, low poverty and high incomes, Parker had to track down average income levels. They’re here, in table 684, column M (unfortunately, this lists family median income by state for 2006, which is not quite average income for 2005, but it’s close).

And Nevada ranks 42nd, ahead of 8 states. Not 48th.

Parker finishes up with the now almost-legendary deception that:

The Tax Foundation reports that Nevada has the next-to-lowest tax burden in the nation, just slightly above Alaska. That ranking is roughly where we have been since the 1970s.

The Tax Foundation actually found that while we rank low on the taxes we assess on ourselves, we rank high on the taxes we assess from non-residents (tourists), and at the national median for total spending per capita. Once again, Parker selects a deceptively small subset of the available information to lead readers to an incorrect conclusion.

In case his subtle sins of omission are not enough, Parker finishes with a couple of whopping lies:

…there are also many things the private sector cannot efficiently provide. Like national defense, affordable and available public education is one of these.

and

Unlike most other states, Nevada has no private universities, so this is an important responsibility.

These are really the heart of the matter for Parker. As a government economist in Nevada, he’s been enjoying doubled cost-of-living raises for years (once for inflation and again from the NSHE “merit” program under which almost all professors get an extra COLA bump). And if we don’t raise taxes, he may not get either next year.

Of course the private sector can efficiently provide education. In Las Vegas, for example, Faith Lutheran‘s middle school tuition was $7,260 in 2006 including capital costs and debt service; that same year, Nevada public school funding was $7,345 not including capital costs and debt service.

And there are a growing number of private colleges in Nevada, including: Touro College, Sierra Nevada College, DeVry University, National University, ITT Technical Institute, University of Phoenix, Morrison University, University of Southern Nevada, with my apologies to the many more I don’t have time to list.

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