Category Archives: Nevada legislature

Shady Lender Protection Act heard in Nevada Legislature Committee

AB 282

Perhaps this was a good week to revisit “Margin Call?”  Why? Because Fiore and Friends are promoting AB 282 in the Nevada state Legislature.

“AB 282: AN ACT relating to real property; revising provisions governing mediation of a judicial foreclosure action; revising provisions requiring certain actions related to the foreclosure of owner-occupied property securing a residential mortgage loan to be rescinded after a certain period; revising provisions governing civil actions brought by a borrower for certain violations of law governing the foreclosure of owner-occupied property securing a residential mortgage loan…”

This bill is on today’s agenda in the Assembly Judiciary Committee.  Might it be suggested that the informal title of the bill be “The Shady Lender Protection Act of 2015?”  Here’s why:

“Existing law provides that in a judicial foreclosure action concerning owner- occupied property, the mortgagor may elect to participate in the program of foreclosure mediation. (NRS 40.437) Section 1 of this bill removes provisions governing the process of such mediation and the documents required to be brought to the mediation. Section 1 instead requires the Nevada Supreme Court to adopt rules governing the mediation.” (emphasis added)

Let’s start with the part wherein the Nevada foreclosure mediation process has been successful.  It’s been especially beneficial for borrowers in owner occupied homes who want to avoid foreclosure. [nolo] Perhaps this is why Fiore and Friends and so dead set against it?  So, what are those documents required in the process?

“Nevada’s mediation program requires that borrowers and the lender provide the mediator and each other with certain documents prior to the mediation. The borrower must provide appropriate documentation, such as financial information, so that the lender can make a determination about whether the borrower is eligible for a loan workout. The lender must provide documents such as the original note, deed of trust, and assignments (or certified copies).” [nolo]

Remember those bad old days, the ones in the wake of the housing bubble debacle?  Those were the days during which lenders were seeking to foreclose properties on which they didn’t have the paperwork necessary to prove who held the mortgage.  And at this point we return to the messy problem of MERS.

MERS was an ‘electronic’ recording of mortgages which was supposed to facilitate the assignment of mortgages etc. at high speed – speed high enough to sate the demand from Wall Street for more and more and more mortgages to slice, dice, tranche, and otherwise divide into financial products for marketing.  The idea was that county recorders weren’t fast enough to keep pace with the Wall Street demand for mortgages in the secondary market.  The fall out from the MERS mess is still being felt in parts of the country. [Harpers]

Thus, what AB 282 does is to (1) eliminate a mediation process which has been successful in Nevada, and (2) eliminates the documentation requirements now on the books according to which the borrowers must provide their financial information and the lenders must prove they own the paperwork on the property.  We can guess who’s having problems with the paperwork, but an article in the Reno Gazette Journal in 2012 provides some interesting details:

“Data from the same report (on program effectiveness) , however, have some questioning what the program’s definition of good faith is. Out of the 3,183 total cases from the same time period, banks did not bring all the required documents in 1,149 cases — a rate of 36 percent.

JPMorgan Chase topped the list, failing to bring all necessary documents in 52 percent of its cases. Ally/GMAC was second at 50 percent, followed by Bank of America at 41 percent, US Bank at 32 percent and Wells Fargo at 31 percent. Citigroup posted the lowest rate of the six banks mentioned at 12 percent.”

And, why did the banks have problems with the paperwork?  They didn’t have it. The Great Wall Street Mortgage Mill had shredded the mortgages into sliced and diced financial products in which nobody knew who really owned what – much less what the paper was really worth.

“They want the original paperwork and not a certified copy, which becomes an issue for mortgages that have been securitized (into investments),” Uffelman said. “Once a mortgage gets securitized, the paperwork ends up in a different place and can be tough for a servicer to track down and pull back together. The more you securitize stuff, the easier it is to screw things up.” [RGJ 2012]

And screw things up they did. Since Wall Street was in such a glorious rush to manufacture asset based securities on offer in the Casino, the recording and other record keeping practices were lost in the great paper shuffle.  Only in the imagination of Wall Street sycophants does this create a problem to be borne solely by the homeowner.

If we look at the latest report (pdf) from the program we see the nature of the continuing documentation problem:

“Of the 1,894 mediations held during FY 2014, 73 percent resulted in the homeowner and the lender not coming to an agreement to retain or relinquish the property. In 28 percent of these cases, no resolution was reached because the lender failed to prove it had the authority to foreclose, or the lender failed to prove ownership of the deed of trust or the mortgage note.”  

“For example, in 319 cases, the beneficiary failed to bring the required certifications for each endorsement of the mortgage note. By statute, the lender must provide a certified deed of trust, a certification of each assignment of the deed of trust, a certified mortgage note, and a certification of each endorsement and/or assignment of the mortgage note.”

And just so borrowers aren’t inclined to take on the banks in a questionable foreclosure, AB 282 limits the time line for the mediation process, drops awards from $50,000 to $5,000, and eliminates the recovery of attorney fees by a prevailing borrower.

The Legislature already has AB 360 The Annuities Saleman’s Friend Bill in the hopper, and now the financialists must be rubbing their palms at the prospect of the Ultra-Big-Bank-Friendly AB 282!

AB 282 is a bill for the Banks, for the Wall Street Casino Players, for the Speculators, for the Financialists – and it is NOT a bill which does anything for average Nevada families.   As the session progresses it’s becoming ever more clear who the Nevada Republicans are supporting – and it’s definitely not Nevada homeowners.

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Filed under Economy, financial regulation, Foreclosures, Nevada economy, Nevada legislature, Nevada politics

It Can Happen Here: Nevada considers anti-gay SB 272

Rainbow Flag

It can happen here. Two bills have been introduced so far in the Nevada Legislature which are similar to the now infamous Indiana discrimination act.  We need to exercise some caution with these bills, because not all “religious freedom” bills are equally ominous.  Unfortunately, SB 272, sponsored by Senator Hardy, falls into the “Indiana Category.”

“AN ACT relating to religious freedom; enacting the Nevada Protection of Religious Freedom Act; prohibiting state action from substantially burdening a person’s exercise of religion under certain circumstances; requiring strict scrutiny to be applied in all cases where state action substantially burdens a person’s exercise of religion; providing a claim or defense in judicial and administrative proceedings to protect a person’s exercise of religion; providing certain exceptions;…”  [SB272]

The general summary sounds innocuous enough, and similar to federal statutes preventing state actions which constitute an undue burden, but the bill goes one step further.

“Section 16 of this bill allows a person whose exercise of religion is substantially burdened by state action to bring or assert a claim or defense in any judicial or administrative proceeding to protect the person’s exercise of religion from the burden and to seek redress for any harm or injuries to the person, whether or not a governmental entity is a party to the proceeding. Because some state laws protecting religious freedom are applicable only when a governmental entity is a party, those religious freedom laws do not apply to a proceeding between private parties. (Elane Photography, LLC v. Willock, 309 P.3d 53, 76-77 (N.M. 2013)) By contrast, because this bill does not require a governmental entity to be a party, this bill applies to a proceeding between private parties in which one of the parties is seeking to enforce a state or local law, regulation or rule that substantially burdens another party’s exercise of religion.”  (emphasis added) [SB272]

Other religious freedom acts around the country limit the “burden” to areas in which the state or other unit of government are parties to the case; SB 272 opens this up to situations between private parties.  In short, it is a license to discriminate.  This is evident in the definitions segment of the bill:

“Sec. 6. 1. “Burden” means any state action that directly or indirectly constrains, inhibits, curtails or denies the exercise of religion by a person or compels a person to act contrary to the person’s exercise of religion.” [SB272]

In short, if an individual can argue that any state statute or regulation compels him or her to do something which impinges on a religious belief then the burden is presumed intrusive, and if a dispute arises between two private parties concerning the ‘right to discriminate’ based on religious beliefs then the discrimination would be lawful.

Not too put too fine a point to it, but SB 272 could be labeled the Religious Fanatic Discrimination Protection Act.  Christianity has been used in the U.S. as a pretext for previous acts of outright discrimination.  While the Bible was cited by the Abolitionists, it was also used to support the Peculiar Institution – of slavery – in the old south.  It has also been cited to support segregation and anti-miscegenation laws. [BFR] [TP.org]

AB 277, introduced by Assemblymen Nelson and Ellison, is from the same boiler plate rendition as SB 272.

“… because this bill does not require a governmental entity to be a party, bill applies to a proceeding between private parties in which one of the parties seeking to enforce a state or local law, regulation or rule that substantially burdens another party’s exercise of religion.”

Little wonder Senator Hardy is listed as a co-sponsor of this legislation.  Given the controversy, it would seem that the sponsors of these bills would have taken more care to sponsor drafts which are not outliers in terms of the genre. By broadening the language and inserting the “rights’” of private parties to discriminate, the sponsors fell into the Indiana Trap, wherein not all RFRA acts are created equally:

The problem with this statement is that, well, it’s false. That becomes clear when you read and compare those tedious state statutes.  If you do that, you will find that the Indiana statute has two features the federal RFRA—and most state RFRAs—do not. First, the Indiana law explicitly allows any for-profit business to assert a right to “the free exercise of religion.” The federal RFRA doesn’t contain such language, and neither does any of the state RFRAs except South Carolina’s; in fact, Louisiana and Pennsylvania, explicitly exclude for-profit businesses from the protection of their RFRAs. [Atlantic]

The second problem in Indiana’s statute is the insertion of private rights to discriminate.  Merely because a statute is titled RFRA doesn’t mean it’s like all the others.  [Atlantic] [TP.org] [InAdvance]

As there was a backlash in regard to anti-miscegenation laws, to desegregation efforts, and to racial integration, we may now be seeing the backlash to gay marriage play out in the guise of ‘religious freedom,’ much as though we were being treated to a replay of Theodore Bilbo and Lester Maddox speeches of generations ago.   The Nevada Legislature could make far better use of its time than in the consideration of these two bills.

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Filed under gay issues, Nevada legislature, Nevada politics

Vote Suppression Bills Emerge in Nevada Legislature

Vote suppression 2 Here they go again: SB 433AN ACT relating to elections; requiring the county clerk and city clerk to publish the voter turnout for each day of early voting by midnight of the following day; prohibiting an election board officer from displaying a political preference or party allegiance while serving; requiring the county clerk and city clerk to use certain criteria in determining polling places for early voting; revising the hours and days for early voting;…  And they’re off, galloping toward making it more difficult to cast a ballot in Nevada elections —

Sections 4, 5, 12 and 13 of this bill provide that no permanent or temporary polling place may open before 7 a.m., remain open after 7 p.m. or open on Sundays during early voting.”

This in a state in which one of the leading employers is the “hospitality” sector, and people in that sector work various shifts which are generally not associated with so-called ‘standard hours.’   Here’s a conservative idea: How about allowing local governments some discretion in how they conduct their elections?

Consider for a moment the section in the bill which alleges to be “fair” about the location of polling stations.  Heretofore, county clerks and local election officials have had some latitude to establish these on the basis of local returns and traffic.  However, SB 433 adds some language which contains another wrinkle.  The Bill says,

“2. The county clerk shall: (a) Provide by rule or regulation for the criteria to be used to select permanent and temporary polling places for early voting by personal appearance . [; and] The criteria used to select permanent and temporary polling places for early voting by personal appearance must, without limitation: (1) Ensure that permanent and temporary polling places are located near residential areas of the county, to the extent possible. (2) Ensure that a permanent or temporary polling place is located in every geographic area of the county, to the extent possible. (b) At a meeting of the board of county commissioners, inform the board of the sites selected as permanent and temporary polling places for early voting by personal appearance. 3. The number of permanent and temporary polling places for early voting by personal appearance in a county with multiple assembly districts must be divided equally among the assembly districts.” (emphasis added)

First, there’s the waffling language inserted “to the extent possible,” without specifying what criteria should be used to determine whether a location is feasible.  Secondly, take a another look at the portion underlined above.  What counties have multiple assembly districts?  Clark (Las Vegas), Washoe (Reno-Sparks), and in general members of the Nevada Assembly represent about 64,299 residents.

The 42 Assembly districts include 30 districts wholly within Clark County, 8 districts in the Washoe County/Carson City/western Nevada area, and 4 Assembly districts within the 2 rural Senate districts.”  [nvleg]

Now, if each of the Assembly elections in multi-district counties have the same number of polling stations what would the impact of this be on those districts which have more than the average number of residents and those which have less?  This is a problem which could easily be sorted by local officials who know how many people live where – but the Republican bill would treat everyone “equally” when such a solution might not in itself be equitable. 

There are three “overpopulated” districts in Nevada after the 2010 census:  Clark Senate District 9, 173.9% overpopulated;  State Assembly District 22 at 246.7% overpopulated; and,  Nevada Assembly District 13 with 298.8% overpopulation. [ballot]  Perhaps we might want to think about installing more polling stations in those districts which are overpopulated rather than being “fair” by allowing all districts an equal number no matter the overpopulation figures? Interestingly enough those two overpopulated Assembly seats are currently held by Republicans, as is Senate District 9.  It’s hard to conceive of Republicans advocating long lines in polling places for their own incumbents – but perhaps when ideology trumps common sense that could be the outcome?

This could also prove to be the case in the infamous SB 169, photo ID bill.  What makes SB 169 of special interest is that it only recognizes state, federal, and tribal identification forms of identification.  The result is essentially disenfranchisement.  And, disenfranchisement with a big price tag for taxpayers:

“The bill was referred to the Senate Finance Committee because of its undermined cost of providing voter identification cards to those who lack other acceptable forms for photo ID.

There’s also the expense of educating voters on the requirement, Story said, adding Indiana, on which the Nevada bill is modeled, spent millions of dollars on such efforts.’ [LVRJ]

Additional, costly, voter identification measures to solve a non-existent problem, combined with the shrinking number of hours available for voters is a recipe for vote suppression, exactly what Republicans have been clamoring for in recent years.  Bill Moyers compiled a short but illustrative guide to GOP vote suppression thoughts, which deserves a review at this point before the Republicans in Nevada make voting the preserve of the rich and all but impossible for the poor.

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Filed under Nevada, Nevada legislature, Nevada politics, Vote Suppression, Voting

The Great Annuity Bundle Bungle: AB 360

banker 2 The Financialists are at play in the current session of the Nevada Assembled Wisdom, with the support of Assemblyman David Gardner (R-NV9) and his AB 360 which will be heard in the Assembly Government Affairs committee today.  Here’s the summary:

“This bill: (1) requires a program for deferred compensation that is made available by the State or the Board of Regents to offer an employee at least five investment options to choose from; (2) provides that any plan authorized by 26 U.S.C. § 403(b) or 457 must offer at least two investment options consisting of fixed or fixed index annuities and at least two securities investment options offered by different investment management companies; and (3) provides that a third-party administrator of a program for deferred compensation must use an open and competitive request for proposals process when selecting investment options for the program.”

Sounds techy?  This link will take you to the UNS page explaining the supplementary (and voluntary) retirement programs currently offered by the institutions of higher education in Nevada.  There are two “record keepers” for voluntary retirement programs: ING and Hartford; and, there are also plans separated from these two offered by TIAA CREF, Valic, and Fidelity.  So, why would the University System have to offer five, including “fixed or fixed index annuities?

First, what’s a fixed index annuity?  The SEC explains the forms currently available:

“There are generally three types of annuities — fixed, indexed, and variable. In a fixed annuity, the insurance company agrees to pay you no less than a specified rate of interest during the time that your account is growing. The insurance company also agrees that the periodic payments will be a specified amount per dollar in your account. These periodic payments may last for a definite period, such as 20 years, or an indefinite period, such as your lifetime or the lifetime of you and your spouse.

In an indexed annuity, the insurance company credits you with a return that is based on changes in an index, such as the S&P 500 Composite Stock Price Index. Indexed annuity contracts also provide that the contract value will be no less than a specified minimum, regardless of index performance.

In a variable annuity, you can choose to invest your purchase payments from among a range of different investment options, typically mutual funds. The rate of return on your purchase payments, and the amount of the periodic payments you eventually receive, will vary depending on the performance of the investment options you have selected.”

So, what could possibly go wrong?  There are several reasons why annuities aren’t all they are cracked up to be.   First, we ought to remember that annuities are forms of insurance, and are regulated as insurance policies and NOT like securities.  For example, with fixed or fixed index annuities there aren’t the disclosure requirements which are in place for investments in securities.  The individual purchasing the annuity is on his or her own to figure out the fees, the comparative performance, and even how the money is being invested. [Kiplinger]   Thinking about fixed index securities? Think again.

FINRA issued an “alert” regarding those “Fixed Index,” or sometimes called “Equity Indexed” annuities (pdf)

“Sales of equity-indexed annuities (EIAs) have grown considerably in recent years. Although one insurance company at one time included the word “simple” in the name of their product, EIAs are anything but easy to understand. One of the most confusing features of an EIA is the method used to calculate the gain in the index to which the annuity is linked. To make matters worse, there is not one, but several different indexing methods. Because of the variety and complexity of the methods used to credit interest, investors will find it difficult to compare one EIA to another.” (emphasis added)

If a person isn’t knowledgeable and comfortable with terms like “ratchet” indexing, or “high water mark,” or “point to point” indexing methods, then the session with the salesperson will be (a) quite long or (b) really confusing.  The salesmanship is an important element, and leads us to the second thing that could go wrong.  Did we explain that because annuities are lightly regulated, unlike equities, that the commissions for selling and managing annuities are in the really high range – like around 6%? [Orman

So, with an almost unregulated product, the opacity of which is nearly legendary, and the fees are some of the highest in the business, why require the University System to offer them?

Because the whole business in annuities goes back to the Romans, but the recent interest has more to do with insurance companies trying to shave off a bit of the money that was going toward money market accounts  in the late 1980s and early 1990s.  And, what the salesman is telling the potential buyer doesn’t usually include: (1) The high costs and fees; (2) The illiquidity (for ‘premature’ distribution; (3) The complexity of the product – remember it’s really hard to compare products; and (4) The taxes, “All withdrawals received from an annuity contract that are not considered to be a return of principal are taxed as ordinary income, regardless of the holding period of the contract (see below). There is no chance to qualify for capital gains treatment.” [Investopedia]

Why AB 360? Perhaps because somewhere out there in Nevada there are insurance companies still seeking to pick off investors who might otherwise sign up for retirement plans associated with the equities or money market sectors – who are ripe for the picking.

If a reader still isn’t sure why DB is opposed to this bit of legislation designed to enhance the bottoms (and bottom lines) of the insurance business, then I’d recommend “Beware the pitch for indexed annuities,” Reuters 2010; and,  “Annuities are not bought, they are sold,” from Forbes 2012; and, “The low down on equity indexed annuities, “ Bankrate.

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Filed under financial regulation, Nevada economy, Nevada legislature, Nevada politics, public employees

The Bundy Boys Join the Circus

AB 408

Remember the Bundy Boys?  Wonkette hasn’t forgotten the Fiore Forays into governmental mismanagement, nor have too many other people.  Now, the flags are flying again, for Freedumb!, in the form of AB 408, a singularly silly bill put forth by the usual group of Tea Partying Fanatics: Assemblywomen Fiore, Dooling, Shelton, Titus, and Seaman. Yes, it’s Ladies’ Day for AB 408, with some fellows tossed in as co-sponsors.  The ladies would like to kick the Feds out of Nevada:

“AN ACT relating to public lands; prohibiting the Federal Government from owning or regulating certain public lands or the right to use public waters; requiring the State Land Registrar to adopt regulations that provide for the appropriation and registration of grazing, logging, mineral development or other beneficial use rights on public lands; requiring the State Land Registrar to sell permits for grazing, logging, mineral development or other beneficial uses on public lands for which such rights are not registered and appropriated; requiring the board of county commissioners of each county to impose a tax on profits from the beneficial use of public lands;…”

Translation: Any rancher who doesn’t want to pay grazing fees for the use of public lands doesn’t have to.  And, we can go one step further – any mining company or logging enterprise can have the State Land Registrar sell off Nevada’s minerals and timber resources at will.  It’s privatization, as they say, on steroids.

What the Tea Bag Biddies seem to have forgotten is that there are other people using those lands too – not just the likes of Cliven “I want to tell you one more thing I know about The Negro” Bundy – and they aren’t hikers and tree huggers, they’re other ranchers.   If the Bundy ilk are allowed to over-graze range lands the land isn’t just Bundy’s problem, it becomes a problem for other ranching operations in the area which might want to use the land eventually.  This isn’t the only thing the Tea Bag Biddies seem to have overlooked.

There is more to BLM land management operations than protecting wildlife, there’s the part wherein the BLM is involved with wildland fire fighting, fuel mitigation, and related issues; combined with programs to manage energy resources, communication right of way and access, and hunting and fishing access.  Then, there’s that pesky bit of Constitutional History, in the act admitting Nevada into statehood:

“Third. That the people inhabiting said territory do agree and declare, that they forever disclaim all right and title to the unappropriated public lands lying within said territory, and that the same shall be and remain at the sole and entire disposition of the United States; …..”

So, the terms of AB 408 are ultimately selfish, deliberately narrow, and most probably unconstitutional – and Ammon Bundy, litigant in a relatively new phony lawsuit against the Feds, is gathering support from the Tea Bag Biddies in the Legislature. [LTN]  And, they’ll be hoping for some company. Company who share the Bundy fictional version of the country:

“The natural resources of America are being stolen from the people and claimed by the federal government. Everything we eat, wear, live in, use and so on comes from the earth. If we lose access to the land and natural resources we become beggars to those who control access. Without doubt this is the greatest immediate threat to the individual person and people as a whole. More lives, liberties and property can be taken under this threat than any other we see.”  [RReport]

No statement could make it more abundantly evident that the Bundy Brigade sees itself as separate from the other 320,000,000 people in this country.  For all the blathering about Constitutional-ism, the Brigade appears to have forgotten the first words of the hallowed document: We the people of the United States, on Order to form a more perfect Union…”  We the people form the government. Not “we the Bundys.”  A rough translation of Bundy-ism might be: What’s mine is mine and what’s yours is mine too.

And lest we forget, it was this same general philosophy which attracted support from the two Bundy-ites who killed Officers Alyn Beck and Igor Soldo, in Las Vegas, NV in June 2014. 

The bill will get its hearing, and should get nothing more. 

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Filed under Constitution, Hate Crimes, Interior Department, Nevada, Nevada legislature, Nevada politics, public lands, Rural Nevada

Legislative Headaches: The Tax Man Cometh

Take Two Aspirin

If the three major tax plans in the Nevada Legislature, and their varied explications, are giving you a head ache, the Las Vegas Sun offers a good comparison of them.  There’s a major problem with the Assembly GOP plan which:

“Would change modified business tax rate from 1.17 percent for general business and 2 percent for financial sector businesses to 1.56 percent for all businesses. Exempts companies with payrolls less than $50,000 per quarter and removes a deduction for health care premiums.”

This is a form of “flat tax.” And, there’s one group of businesses which benefit most from a “flat tax,” – the big ones. I know, it sounds counter-intuitive, but what gives the appearance of equity (the flat tax) actually ends up being one of the most inequitable forms of revenue raising.

Beloved by such think tanks as the ultra-conservative Cato Institute, flattening taxes works against middle income groups, both domestic and business.  Let’s assume that the 1.56% tax were to apply to all businesses in the state with payrolls more than $50,000 per quarter ($200,000 per year.) This would apply to all forms of enterprises except those in the financial sector.  For clarity, the financial sector includes commercial banks, investment banks, insurance companies, investment companies, unit investment trusts, face amount certificate companies, management investment companies (closed/open), and three types of non-bank investment companies: (1) savings & loans, (2) credit unions, and (3) shadow banks. [Investopedia]

Current law and the Sandoval Plan keep the tax on those financial sector enterprises at 2%.  The Assembly Republicans would provide them with a 0.44% tax break. At this point, it ought to be asked – Why is a bank like Wells Fargo with a reported revenue of $21.4 billion (up 4% YOY) getting a tax break when a supermarket is running on a 6% margin?  Or, why is a hedge fund, and those similar firms which operated in the shadows in the run up to the crash of 2007-2008, getting a break?

One conclusion is that the Banking Lobby and associated financialists are running full bore at the tax proposals.  Hedge fund managers already have one of the sweetest tax breaks imaginable in the form of the Carried Interest Loophole, and now the Assembled Wisdom is proposing they get a nice break from the state. [See also: TO.org, BusinessInsider]  If nothing else, the Assembly proposal indicates that Financialism is alive and well in the Legislature’s bailiwick.

In short, what looks superficially “equitable” actually makes it easier on the financial sector firms, and places more of the revenue raising responsibility on those businesses which operate on a local level – retailers, wholesalers, and the like.  “Shadow” financial institutions, already the beneficiary of copious tax avoidance strategies, are paying the same “freight” as the supermarket chain and the retailers.

There’s another point which ought to be addressed:  Who is at greater general risk during an economic downturn?  In case we hadn’t noticed – the financial sector is no longer directly connected to the commercial sector. The advent of the Shareholder Value theory of corporate management is what drives stock prices – it doesn’t matter if employment is dropping, if the cuts in payroll are assumed to be part of the management plan to boost the value of the shares.  However, in the real economy it matters very much if employment is reduced because that in turn yields lower demand for goods and services.

In this instance, “sharing the load fairly” actually means that the businesses most likely to be hurt by any economic downturn, and those businesses which are dependent on local economic conditions, are to “share” an equal burden in terms of revenue raising with those which are all too often the perpetrators of commercial difficulties in the “real economy.”

Putting it less diplomatically, the Assembly proposal really isn’t very fair at all.

*And by the way – doesn’t eliminating the deductions for health care insurance make it less likely employers will sponsor such plans, making it all the more necessary that the health insurance exchange markets under the Affordable Care Act be sustained?

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Filed under banking, Economy, Nevada economy, Nevada legislature, Nevada politics, nevada taxation

There’s a reason tenure cannot be taken from a Nevada public school teacher, and it’s simple.

teacher tenure

There is nothing to take, Nevada public school teachers do not have tenure.  Nevada teachers have either probationary or post-probationary statusAB 378, which is purported to be a ‘reform’ bill is another of those ALEC/AFP dream lists inserted into the Legislative discussion.  Here’s the meaty part:

“Existing law provides for the evaluation, discipline and discharge of public school teachers and administrators. (NRS 391.311-391.3197) Generally, during a 3- year period, probationary teachers and administrators are subject to more intensive evaluation, have no right to continued employment after any school year, and have limited procedural rights if they are suspended or dismissed during a school year. (NRS 391.3125, 391.3127, 391.3128, 391.3197) The admonition, demotion, suspension, dismissal and nonreemployment provisions that apply to postprobationary teachers and administrators are generally inapplicable to probationary teachers and administrators. (NRS 391.3115) However, existing law provides that a collective bargaining agreement supersedes these statutory provisions if the agreement contains provisions relating to dismissal and nonreemployment. (NRS 391.3116) Section 10 of this bill generally eliminates the existing distinctions between probationary and postprobationary employees, except for the purposes of the evaluation requirements applicable to them. Notwithstanding the provisions of any collective bargaining agreement or contract of employment to the contrary, section 10 provides that a postprobationary employee has no status or rights of employment different from those of a probationary employee and may be denied reemployment after any school year.”

Got this? Because it really isn’t very difficult.  There are no “tenured teachers” in Nevada – there are only those with “postprobationary status” who have a less stringent evaluation procedure, and have DUE PROCESS rights if they are to be dismissed, demoted, or refused a contract for the next school year.  That’s all, simply DUE PROCESS rights to answer the allegations of mismanagement or incompetence if they are not offered another one year contract; and – every teacher in Nevada signs ONE year contracts with the local district.  Therefore, what AB 378 does is NOT to eliminate tenure (which doesn’t exist) but to eliminate DUE PROCESS, which does.

Now class, hands up, all in favor of removing  DUE PROCESS for teachers who are challenged by the school administration for mismanagement, incompetence, or generally not being popular with the administration?

This is a piece of legislation entangled with all manner of potential unintended consequences. A few examples:

Which evaluation regime is to be adopted for all teachers in the district if the distinction between probationary and post probationary teachers is eliminated?  It sounds like the probationary model might be the one most aligned with the intent of the legislation, but have the authors of the measure calculated the amount of time a school administrator would have to add to an already busy schedule to implement the enhanced processes in place for probationary teachers to everyone in the building?  Do the bill’s authors intend to fund additional administrators for school districts to fulfill all the evaluation tasks assigned?

If there is no advantage in staying with a school district for any length of time because there is no distinction between probationary and postprobationary teachers, then why should a “highly effective,” or “effective” teacher bother to stay longer than three years in a district if some other district or school offers higher pay or better incentives? 

Frankly, if I were in charge of an affluent school or district I’d be delighted with the prospect of “picking off” the best and brightest in the not-s0-affluent areas, by hinting to the best and brightest that since there was no advantage for them to stay longer in the Not So Affluent district or school,  I could offer, say, smaller class sizes, a lighter schedule, and more input into curriculum design and implementation?  This often happens anyway, but why encourage it?

If due process is denied to an individual who has received “highly effective” or even “effective,” ratings for three years running does the prospect of demotion, dismissal, or refusal of re-employment invite more litigation? The elimination of the hearing process means that the “administrative remedies” are exhausted as soon as the announcement is made to the teacher in question.  So, if there aren’t any “administrative remedies” available, then the next step is into the courtroom.  Expensive? Probably.  This situation leads to the next question.

Does eliminating the due process and related contractual provisions place more school administrators in jeopardy?  Possibly yes.  If administrative remedies are eliminated and any questions remain about the intent or source of the decision to demote, dismiss, or refuse to re-employ, then the administrator or district must demonstrate (as a potential defendant) that the decision made was not arbitrary, capricious, or vindictive.   If there’s  system in place governing the demotion, dismissal, or employment refusal decision making process then the administration has a documented ‘trail’ and it is much more difficult to substantiate allegations that the decision was made arbitrarily, capriciously, or even vindictively.

Other than completely eliminating the due process protections for both teachers and administrators, there’s another element in the bill that should make a person’s skin crawl.

“Existing law requires the State Board of Education to establish by regulation the maximum pupil-teacher ratio in each grade and for each subject matter each school district in this State. (NRS 387.123) Generally, the ratio of pupils teachers in kindergarten and grades 1, 2 and 3 must not exceed a specified and each school district must develop a plan to reduce the ratio within the limits available financial support. (NRS 388.700-388.725) Sections 3-5, 12, 13 and this bill repeal those provisions and eliminate existing references to them.”

It’s difficult enough to be “effective” or “highly effective” as a teacher or administrator in a school anyway… but in which situation are they more likely to be successful:  School A with 40 students in primary grade classrooms; or, School B with no more than 20 students in primary grade classrooms?  Or, put less stridently, in which classroom is a youngster more likely to receive attention to his or her questions?

Assemblywomen Victoria Dooling (R-NV41 and Freedom Works) and Shelly Shelton (R-NV10), the sponsors of this bill, should have paid a bit more attention to the details in NRS 391 before putting this bill forward.  Additionally, they should have noticed that when the subject of employment and due process arise the potential for mischief (and protracted litigation) increases.  Sometimes things aren’t as simple as anti-government activists like Matt Kibbe says. 

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Filed under education, FreedomWorks, nevada education, Nevada legislature, nevada taxation