Now the real work begins.
The Silver State faces challenges on nearly every front. Its economy remains beleaguered, its public education system is failing and its public finances are a mess.
That means it will take a lot more than talking points for Nevada’s new lawmakers to turn the state around. It will take concrete and specific ideas that are capable of effecting positive change.
Developing those ideas is the mission of the Nevada Policy Research Institute and a key reason why NPRI produces policy guides such as Solutions 2013: A Sourcebook for Nevada Policymakers. Solutions 2013 points to specific bills enacted in other states or to draft legislation that would address many of the challenges confronting Nevada.
But, given the size of the task, it will be easy for lawmakers to become overwhelmed in their efforts to make Nevada a better place.
Therefore, we’ve produced a “Top 10” list of legislative proposals for 2013, five of which are covered below, with the other five addressed in a subsequent piece. With this list, lawmakers can focus on the changes that will make the biggest difference in terms of better opportunities for Nevadans:
1. Create a public-education tax credit and scholarship. Nevada currently suffers from the lowest high school graduation rates in the nation — a problem that negatively impacts Nevadans’ earning potential and capacity for innovation, entrepreneurship and economic vitality. What’s more, children from Nevada’s low-income neighborhoods are more likely than others to be zoned into a failing school. That means the failures of Nevada’s public school system contribute to a cycle of poverty and government dependency in these neighborhoods.
Nevada’s children deserve better. No child should be forced to attend a failing school. But parents who cannot afford a private-school alternative on their own, or who aren’t lucky enough to win a charter-school lottery, often have no choice but to send their children to schools that fail to prepare their students for success in life. That’s why it’s imperative that Nevada lawmakers offer these families a way out by providing the financial resources with which parents can send their children to schools of their choosing through a public education tax credit.
In the past, some lawmakers have tried to amend the state’s constitution in order to allow for a voucher program. However, the amendment process is a lengthy one and Nevada’s families need help now. A public education tax credit can be implemented immediately. Such a program, designed for Nevada by Cato Institute scholar Andrew Coulsen at NPRI’s request, would allow businesses to direct their tax payments into a scholarship fund from which families could draw private-school tuition. While a universal program would have the greatest impact, some states with similar scholarship programs target those scholarships specifically to low-income or special-needs students.
Read more: Solutions 2013, p. 32 in the PDF, p. 30 in the book
2. Create a hybrid retirement system. The official figures for Nevada’s Public Employee Retirement System indicate that the system was underfunded by $10.4 billion at the close of FY 2010. However, PERS’ accounting assumptions fail to account for risk in its investment portfolio, the way private pension plans are required to do. If PERS followed the same accounting rules that are required of private plans, its unfunded liability would be around $41 billion.
This large and growing unfunded liability impinges on state and local government budgets more and more each year, as taxpayers’ required-contribution rates rise in order to help pay down the debt. This means that state, county and city offices have only a decreasing share of their budget with which to provide public services, since an increasing share goes to service the retirement debt.
Nevada cannot afford for this trend to continue. Already, growing retirement costs have forced a wave of municipal bankruptcies across the country. And other states have responded by modifying the benefits structure of their retirement systems. NPRI has recommended that Nevada — as Utah has done — move to a hybrid retirement system that combines elements of a defined-benefits plan and a defined-contribution plan.
Read more: Solutions 2013, p. 24 in the PDF, p. 22 in the book
3. Demand transfer of federal lands. Nevada’s people reside on only a bit more than 10 percent of the state’s land. The rest has been taken from them by federal authorities.
Congress’ requirement, at the time of statehood, that Nevada forever cede right and title to most of the land within its borders was and is a clear violation of the state’s constitutional equal-footing rights. Eastern states were never subjected to this requirement. That’s why no issue has enjoyed as widespread support as the effort to assert the state’s equal-footing rights and return Nevada’s land to its people. In the 1990s lawmakers from both legislative chambers voted unanimously to remove the disclaimer of interest in public lands — required by a Civil War Congress — from Nevada’s constitution. Still, the amendment requires either congressional consent to become effective or a judicial determination that congressional consent is not required.
Since Congress, for 16 years, has refused to take a vote on this issue, the remaining option is for Nevada to pursue legal action that assures the state’s equal-footing rights are protected. A clear course of action is to pass state legislation that contradicts offensive federal land statutes — allowing Nevada to acquire standing to challenge unconstitutional federal land claims before the U.S. Supreme Court. Utah already took such action with the passage of HB 148 earlier this year.
Read more: Solutions 2013, p. 84 in the PDF, p. 82 in the book
4. Create a charter agency framework. It’s no secret that Nevada confronts fiscal challenges in the immediate future due to rising spending and stagnant revenue growth. To meet these challenges, lawmakers need to move to a budgeting approach that allows agency directors the flexibility they need to achieve the policy outcomes envisioned by lawmakers in the most cost-effective manner possible.
But lawmakers needn’t re-invent the wheel, either. The charter agency framework adopted by Iowa in 2003, under the leadership of former governor Tom Vilsack, gives agency directors wide latitude to hire or dismiss employees, provide incentive bonuses, make purchasing decisions or outsource certain agency functions as they see fit in order to provide high-quality services at the lowest cost possible. In exchange for this freedom, agency directors must sign performance contracts and be held to a higher level of accountability — something more akin to a private-sector CEO. Nevada lawmakers should create a charter agency framework based on Iowa’s SF 453 and HF 837 and allow agencies to opt in.
Read more: Solutions 2013, p. 8 in the PDF, p. 6 in the book
5. Change collective-bargaining parameters. Nevada’s collective-bargaining laws create a disincentive for union representatives to negotiate in good faith with local governments, especially during times of fiscal stress. That’s because most collective-bargaining agreements (CBAs) contain “evergreen” clauses that ensure that an expiring agreement will remain in force until a new agreement is signed. At the same time, the binding arbitration process outlined in NRS 288 can take up to a year to complete and is routinely decided in favor of unions by out-of-state arbitrators.
Together, these provisions mean that union representatives can, and do, disingenuously stall negotiations, refusing to make concessions during times of fiscal stress, knowing that their current CBA will remain in effect. Eliminating evergreen clauses or changing the binding arbitration process would force union representatives to negotiate in good faith.
In addition, for cities like North Las Vegas that face the looming possibility of bankruptcy due to overly generous union contracts, a legal mechanism for suspending or renegotiating CBAs should be established. At the very least, the state tax department should have the ability to suspend CBAs if they are forced to assume fiscal management of a bankrupt city or county.
Read more: Solutions 2013, p. 58 in the PDF, p. 56 in the book
Geoffrey Lawrence is deputy policy director at the Nevada Policy Research Institute. For more visit http://npri.org.