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OPINION: Mixing Keynes and mercantilism Legislative ‘jobs’ initiative would benefit few, injure many

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by Geoffrey Lawrence – Nevada Policy Research Institute

Nevada legislative leaders are trotting out a new government make-work scheme and justifying it with faulty economic analysis.

In a press conference on Feb. 10, 2011, lawmakers Steven Horsford, John Oceguera, Marilyn Kirkpatrick and Ruben Kihuen teamed with the governor’s chief of staff, Heidi Gansert, to announce support for the “Nevada Jobs Fund.” Legislators want to commit as much as $1 billion to this fund for construction projects, which would pay inordinately high prevailing-wage rates.

The construction lobby, not surprisingly, developed the outline of the plan. Calling itself the “Building Jobs Coalition,” the group’s website calls for a .25 percent increase in the statewide sales tax or a 10-cent increase in property tax rates to create a dedicated revenue stream against which to bond for construction projects.

The group also calls for an elimination of all sunsets on taxes that are used to pay off construction bonds so that bonds can be issued indefinitely to fund construction projects, and calls for slight increases in motor fuel tax rates.

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