August 27, 2019
27 Aug 2019

Political Update – August 27, 2019

 

GOP lawsuit vital to protecting our representative system of government

Robert Fellner
Nevada Policy Research Institute

August 12, 2019

In an effort to defend our state constitution and representative system of government, the Senate Republican Caucus recently filed a lawsuit to invalidate a pair of tax hikes that were passed without the constitutionally required two-thirds support.

After successive, landslide votes in 1994 and 1996, Nevadans amended the state constitution to require a two-thirds majority vote in both houses of the Legislature to pass any bill “which creates, generates, or increases any public revenue in any form.”

Thus, when Senate Democrats sought to pass a pair of bills that would prevent the expiration of one tax and the scheduled decline of another, most expected those bills would require at least two-thirds support to pass.

The Legislative Counsel Bureau, however, determined that a bill which prevents the scheduled decline of an existing tax does not increase revenue and, as such, can be passed by a simple majority vote.

While most would consider the two-thirds provision to be remarkably clear, the LCB found it vague and ambiguous, and ultimately concluded that it only applies to bills that create a new tax or directly increase an existing one.

The LCB claimed that when the constitution references a bill that “creates, generates, or increases any public revenue in any form,” it’s actually only referring to bills that “directly increase revenue,” either by overtly raising an existing tax or creating a new one.

But such an interpretation is strictly prohibited by the rules of statutory construction as articulated by the Nevada Supreme Court, which requires courts to avoid rendering any constitutional text “meaningless or superfluous.”

Because the text of the two-thirds provision references any bill that “creates, generates, or increases” any public revenue, even if one finds that text unclear and in need of further clarification, the resultant definition must be more expansive than just bills which directly increase revenue, in order to prevent rendering the terms of “creates” and “generates” meaningless.

In other words, the constitutional text of “creates, generates, or increases” cannot be reduced to just “increases.”

This is why the LCB’s citation to the state Supreme Courts of Oregon and Oklahoma is not persuasive, as both of those courts were interpreting the narrower phrase of “bills for raising revenue.”

So, what might Nevada’s much broader language apply to, beyond just new taxes or increases in existing taxes as the LCB contends?

*IMPORTANT*

Quote of
the week

 


Quote:

“At the Keystone Corporation, we believe it this provision of our Constitution is worth fighting to defend, and that is why we joined this lawsuit. Further, if legislators can simply ignore the Nevada Constitution to allow for tax increases on the Modified Business Tax (MBT) and on DMV fees this year, what will happen when they try to raise our sales taxes, property taxes, gas taxes, and on and on?”

Keystone Corporation

Emails raise questions about award of DMV computer contract

Arthur Kane

Las Vegas Review-Journal
August 24, 2019

Officials of a tech company that was awarded a contract to modernize the Nevada Department of Motor Vehicles’ computer system met with the agency’s former director and key staffers just months before the state issued a request for proposals for the project, emails show.

The emails raise questions about whether the company, Tech Mahindra, had an inside track for the failed $75 million contract. Officials involved in the meetings and representatives of other companies that bid for the project did not return calls or emails asking whether other bidders met with state officials before the RFP. 

According to the emails, Tech Mahindra vice president Aman Sethi met with then-DMV director Troy Dillard on Feb. 18, 2015, to discuss the modernization. Three weeks later, Sethi scheduled a meeting that included Karuppuswamy Manivannan and Anand Vijayaraghavan, two state IT employees who would end up on the selection committee that picked Tech Mahindra, emails show.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

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August 20, 2019
20 Aug 2019

Political Update – August 20, 2019

Keystone Corporation Joins Lawsuit to Protect Nevada’s Constitution

Keystone Corporation
August 20, 2019

The Keystone Corporation is proud to have joined in the lawsuit to protect Nevada’s Constitutional requirement that two-thirds of the legislature support tax increases before they can be enacted. As an organization, we didn’t just join this lawsuit, we are doing our part to help fund it.  But we need your help today.

As the leading conservative statewide business organization in Nevada, we would love for you to join us and become a member today so you can help us win this lawsuit and fight for our shared principles.  However, if you are unable to join at this time, you can still help us fight to protect our Constitution by going here.

Article 4, Section 18, Subsection 2 of the Nevada Constitution clearly states that this two-thirds vote is required in both houses of the legislature for any bill “which creates, generates, or increases any public revenue in any form, including but not limited to taxes, fees, assessments, rates, or changes in the computation bases for taxes, fees, assessments and rates.” 

Using what Senate Republican Leader James Settelmeyer (District 17) has properly called “a work of legal fiction,” legislative lawyers for the Democrat majority gave a green light to legislators to ignore our Constitution, along with the will of the voters.  In two consecutive elections, Nevada voters placed this tax restraint initiative into our Constitution with over 70 percent of the vote.  That is a clear, bipartisan statement by the voters of our state.  

At the Keystone Corporation, we believe it this provision of our Constitution is worth fighting to defend, and that is why we joined this lawsuit. Further, if legislators can simply ignore the Nevada Constitution to allow for tax increases on the Modified Business Tax (MBT) and on DMV fees this year, what will happen when they try to raise our sales taxes, property taxes, gas taxes, and on and on?  

Please consider joining Keystone Corporation today, or provide us with a contribution to help fund this critically-imporant lawsuit.  We appreciate any amount you can provide.

*IMPORTANT*

Quote of
the week

 


Quote:

“At the Keystone Corporation, we believe it this provision of our Constitution is worth fighting to defend, and that is why we joined this lawsuit. Further, if legislators can simply ignore the Nevada Constitution to allow for tax increases on the Modified Business Tax (MBT) and on DMV fees this year, what will happen when they try to raise our sales taxes, property taxes, gas taxes, and on and on?”

Keystone Corporation

GOP lawsuit vital to protecting our representative system of government

Robert Fellner
Nevada Policy
Research Institute

August 12, 2019

The long-awaited bill creating a new education funding formula is here. Many key details, however, are yet to be determined.

In an effort to defend our state constitution and representative system of government, the Senate Republican Caucus recently filed a lawsuit to invalidate a pair of tax hikes that were passed without the constitutionally required two-thirds support.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

To ensure that you continue receiving email updates,

please add Info@KeystoneNevada.com to your address book or safe list.
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August 13, 2019
13 Aug 2019

Political Update – August 13, 2019



EDITORIAL: Nevada PERS counting on unrealistic investment assumptions

 

Las Vegas Review-Journal

 

August 10, 2019

The current stock market volatility is another reminder of the precarious position of public pension systems, including Nevada’s plan for state workers. That’s because public pensions invest heavily in volatile assets, like stocks.

Across the country, state and local pension plans are only 73 percent funded, according to a review of 180 plans by the Center for Retirement Research at Boston College. The Public Employees’ Retirement System of Nevada does slightly better, coming in at around 75 percent funded. But neither statistic is encouraging.

“State and local pension plans have about $4.4 trillion in assets according to the Federal Reserve,” The Wall Street Journal reported last week, “$4.2 trillion less than they need to pay for promised future benefits.”

Imagine the uproar if pension plan officials announced they were going to pay out only 75 percent of promised benefits. Yet that’s all the assets most of these pension plans currently have — assuming they hit their investment assumptions.

This is especially concerning, because pension systems are riding a 10-year-wave of positive investment returns. The S&P 500 has more than tripled in value since the beginning of 2009. If pension systems are only 75 percent funded after a decade of healthy growth, what happens to the unfunded liability during the next downturn?

Pension managers, however, assure the public that there’s nothing to worry about. To make up for the deficits and growing obligations, they assume pension plans will earn a 7.4 percent return, on average. Nevada PERS assumes annual returns of 7.5 percent.

In fact, these projections disguise the real problem by likely underinflating long-term obligations by overestimating portfolio performance. Thirty years ago, a level of return of around 8 percent may have been realistic. As the Wall Street Journal reported last month, a 30-year U.S. Treasury bond had a return rate of almost 9 percent in 1987. This week, the yield on a 30-year U.S. Treasury bond was 2.25 percent.

Quote of
the week

 


Quote:

"When returns fall short, however, the amount the government must contribute increases,” the Journal noted, “potentially diverting money from other public services.” Or leading to tax hikes on the private sector taxpayers who are ultimately responsible for funding these generous retirement plans."

Las Vegas Review-Journal

 

NEVADA SHOULD END TAX BREAKS FOR THE SELECT FEW

Thomas Mitchell
Lincoln County Record

August 8, 2019

For the past decade Nevada’s Governor’s Office of Economic Development (GOED) has doled out billions of dollars worth of tax breaks to select companies in order to entice them to make capital investments here and create jobs. The companies getting the tax breaks include giants such as Tesla Motors, Apple, Amazon, eBay and Switch.

The office has done this despite the fact the state Constitution declares, “The Legislature shall provide by law for a uniform and equal rate of assessment and taxation …” It’s not uniform or equal if a select few get breaks while others don’t.

Keystone's Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone's Mission:

• To focus on candidate support on state legislative races and the governor's office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

To ensure that you continue receiving email updates,

please add Info@KeystoneNevada.com to your address book or safe list.
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It’s time for GOED to go

Robert Fellner
Nevada Policy Research Institute

July 31, 2019

The RGJ’s recent report, Nevada got a fraction of the jobs, investment promised by Tesla-style tax breaks, confirms what experts have been warning about for years: Nevada’s corporate welfare program is a bad deal for taxpayers.

The Governor’s Office of Economic Development (GOED) provides billions of dollars in tax breaks to large corporations like Apple and Tesla, based on the idea that the added jobs and investments they bring to Nevada will more than offset the cost.

But that claim has been repeatedly debunked by academic research, which finds that programs like GOED tend to be a wash or, in some cases, a net negative. A study published in the peer-reviewed Journal of Regional Science, for example, found that tax incentives actually reduced job growth and business expansion. The study also found that businesses who received the incentives consistently overestimated the economic benefits they would deliver, just like what has happened here in Nevada.

Unfortunately, while the promised benefits have failed to fully materialize, the costs imposed on taxpayers are here to stay. In an effort to quantify that cost, experts at the Mercatus Center recently estimated that eliminating corporate incentives would yield enough savings to reduce Nevada’s sales tax by 7 percent.

That bears repeating: Nevadans are effectively paying more in sales tax just so some of the world’s richest companies can receive a tax break, like the $13.6 million tax abatement given to eBay for a project which created a grand total of two new jobs.

While free markets require that businesses serve the needs of consumers in order to profit, politics rewards insiders who can afford to hire the best lobbyists. This explains why so many legislators support giving tax breaks to giant corporations rather than ordinary Nevadans: the former tends to spend much more on lobbying efforts than the latter.

There is also the issue of concentrated benefits and dispersed costs. Jobs created through GOED give politicians a great opportunity for free press, while the costs are widely dispersed and thus unseen.

Speaking of that which is unseen, it was quite troubling to read that GOED refused to answer the RGJ’s questions “about whether or how it pushed companies to meet the state’s performance measures,” particularly given the tax-funded agency routinely claims it does just that when responding to reports of underperformance.

Quote of
the week

 


Quote:

“That bears repeating: Nevadans are effectively paying more in sales tax just so some of the world’s richest companies can receive a tax break, like the $13.6 million tax abatement given to eBay for a project which created a grand total of two new jobs.”

Robert Fellner
Nevada Policy Research Institute

LETTER: No such thing as a ‘temporary’ tax in Nevada

Daniel Honchariw
to the Las Vegas Review-Journal

August 3, 2019

Kudos to state Senate Republicans for challenging the unconstitutional modified business tax extension. The voter-approved, two-thirds constitutional requirement for any tax increase is too vital a taxpayer protection to diminish.

But on the heels of this legal challenge, one may be inclined to ask: Do taxes ever actually sunset as planned? There’s plenty of recent evidence to suggest “temporary” taxes, in practice, are about as rare as unicorns. Besides the MBT extension, here are a few other “temporary” taxes that have already been, or are likely soon to be, extended into perpetuity:

— DMV technology fee — This $1 fee was supposed to expire in June 2020, but Senate Bill 542 of the 2019 session extended the fee for at least two years. This extension is also being challenged in the pending litigation, having been approved with less than two-thirds support in the Senate.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

To ensure that you continue receiving email updates,

please add Info@KeystoneNevada.com to your address book or safe list.
Click here to unsubscribe 
Having trouble viewing this e-mail? View it in your browser

August 7, 2019
07 Aug 2019

Political Update – August 7, 2019

It’s time for GOED to go

Robert Fellner
Nevada Policy Research Institute

July 31, 2019

The RGJ’s recent report, Nevada got a fraction of the jobs, investment promised by Tesla-style tax breaks, confirms what experts have been warning about for years: Nevada’s corporate welfare program is a bad deal for taxpayers.

The Governor’s Office of Economic Development (GOED) provides billions of dollars in tax breaks to large corporations like Apple and Tesla, based on the idea that the added jobs and investments they bring to Nevada will more than offset the cost.

But that claim has been repeatedly debunked by academic research, which finds that programs like GOED tend to be a wash or, in some cases, a net negative. A study published in the peer-reviewed Journal of Regional Science, for example, found that tax incentives actually reduced job growth and business expansion. The study also found that businesses who received the incentives consistently overestimated the economic benefits they would deliver, just like what has happened here in Nevada.

Unfortunately, while the promised benefits have failed to fully materialize, the costs imposed on taxpayers are here to stay. In an effort to quantify that cost, experts at the Mercatus Center recently estimated that eliminating corporate incentives would yield enough savings to reduce Nevada’s sales tax by 7 percent.

That bears repeating: Nevadans are effectively paying more in sales tax just so some of the world’s richest companies can receive a tax break, like the $13.6 million tax abatement given to eBay for a project which created a grand total of two new jobs.

While free markets require that businesses serve the needs of consumers in order to profit, politics rewards insiders who can afford to hire the best lobbyists. This explains why so many legislators support giving tax breaks to giant corporations rather than ordinary Nevadans: the former tends to spend much more on lobbying efforts than the latter.

There is also the issue of concentrated benefits and dispersed costs. Jobs created through GOED give politicians a great opportunity for free press, while the costs are widely dispersed and thus unseen.

Speaking of that which is unseen, it was quite troubling to read that GOED refused to answer the RGJ’s questions “about whether or how it pushed companies to meet the state’s performance measures,” particularly given the tax-funded agency routinely claims it does just that when responding to reports of underperformance.

Quote of
the week

 


Quote:

“That bears repeating: Nevadans are effectively paying more in sales tax just so some of the world’s richest companies can receive a tax break, like the $13.6 million tax abatement given to eBay for a project which created a grand total of two new jobs.”

Robert Fellner
Nevada Policy Research Institute

LETTER: No such thing as a ‘temporary’ tax in Nevada

Daniel Honchariw
to the Las Vegas Review-Journal

August 3, 2019

Kudos to state Senate Republicans for challenging the unconstitutional modified business tax extension. The voter-approved, two-thirds constitutional requirement for any tax increase is too vital a taxpayer protection to diminish.

But on the heels of this legal challenge, one may be inclined to ask: Do taxes ever actually sunset as planned? There’s plenty of recent evidence to suggest “temporary” taxes, in practice, are about as rare as unicorns. Besides the MBT extension, here are a few other “temporary” taxes that have already been, or are likely soon to be, extended into perpetuity:

— DMV technology fee — This $1 fee was supposed to expire in June 2020, but Senate Bill 542 of the 2019 session extended the fee for at least two years. This extension is also being challenged in the pending litigation, having been approved with less than two-thirds support in the Senate.

Keystone’s Mission:

To recruit, support and advocate for candidates for public office who support private sector job creation, low taxation, a responsible regulatory environment, and effective delivery of essential state services.

Keystone’s Mission:

• To focus on candidate support on state legislative races and the governor’s office.
• To oppose any form of corporate income taxes or other business taxes that discourage capital investment and therefore job creation.
• Support limiting Nevada state government spending to the rate of population growth.

P.O. Box 93596 | Las Vegas, NV 89193-3596

To ensure that you continue receiving email updates,

please add Info@KeystoneNevada.com to your address book or safe list.
Click here to unsubscribe 
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