Tag Archives: NPRI

If It Ain’t Broke, Whack It Anyway: “Pension reform” in Nevada

NV Retirement ALEC Back on July 21, 2014 Nevada Assemblyman Randy Kirner (R-26) ask for the drafting of a bill to create an interim task force to examine alternatives to the Nevada Public Employees Retirement System. (BDR 184)  A more useless bit of legislation isn’t quite imaginable.  Unless, of course, one has in mind the ultimate goal of changing the system from a defined benefit plan to a defined contribution plan. 

If this is the case, then it is right out of the ALEC playbook, which offers model legislation for this purpose.  The corporate interest group also offers model legislation in case the state decides to retain its defined benefit plan.  The defined contribution plan is a notion the Koch supported NPRI has been promoting since at least 2011.  The ‘solution’ was proposed again in 2013 in NPRI’s handbook for legislators. (pdf)  ALEC, the corporate bill mill, waded into these waters again in 2014 with its recommendations from the Public Pension Reform Working Group. (pdf) It might be of some interest to note that the private chair of the task force was held by Amanda Klump, of Altria Client Services, (that would be promoting the interests of the tobacco giant, which used to call itself Philip Morris.

A quick look at a 2014 publication of pertinent facts about state and municipal pension funds (pdf) and information on Nevada’s system from NASRA, should put one’s mind to rest, unless the unsettled portion is still churning through the misinformation and misleading conclusions drawn from publications of ALEC, the Altria Group, NPRI, and the Koch Brothers organizations.

One bill draft request, #185, from Assemblyman Kirner has made it to the light of day in the form of AB 3. Assemblyman Kirner’s effort would increase the size of the PERS Board to nine members, and three of whom would be individuals who: “have specified experience relating to the design or management of retirement plans; (2) are not employees of the State or its political subdivisions; (3) are not elected officers of the State or its political subdivisions; and (4) have never been active members of the System.”  Thus, there would NOT be a member of the board who is an employee of the state of Nevada or one of its political subdivisions,  is serving in a management position,  has 10 years of service, is not an elected official, and is not an active member.  In short – Assemblyman Kirner would remove the individual board member who has a direct interest in the positive outcomes of any policy decisions and replace the individual with three board members who are ‘technocrats,’ serving from the financial sector perspective. How convenient?

Assemblyman Kirner is evidently not pleased with a PERS board consisting of a former CFO of the City of Las Vegas, two members from the Police and Firefighters Retirement Fund Advisory Committee, a chief accountant with the department of Transportation, a former Clark County Budget Manager, a former Director of Payroll and Benefits from the Clark County School District, and a representative from SEIU.  Perhaps there are too many members who might have questions about turning the defined benefits system into a defined contribution scheme?

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Filed under Nevada budget, Nevada economy, Nevada politics

Coffee and the Papers

** Winners (casinos, golf courses) Losers (small business owners, residential customers) in the latest round of Nevada Water Games. [TheNVView] And, the “other” potential loser, of course — rural Nevada, because there’s still that Gorilla sitting in the back of the room: The Pipeline. [8News]

** The continuing Soap Opera (aka Nevada GOP chairmanship) continues; for more information see this article in the Las Vegas Sun.  It is enough to make one wonder that if a major qualification for office is “He’s not been indicted for anything” — if that isn’t faint praise?

** The NPRI has its talking points ready in a pre-digested format for the 2013 term. [NNB] “Solutions 2013” (pdf) Its 88 pages of the same old stuff.  Witness. Among the recommendations is the time tested (and failed) TASC, ostensibly to “protect” taxpayers — which was unceremoniously dumped in Colorado.  Then there’s Performance based budgeting — which sounds remarkably like the ALEC recommendation for “Performance Assessment and Management” in their “Tool Kit.” (pdf) Same old. Same old.

** NV Energy is looking at cuts to programs to assist energy efficiency efforts (weatherization, Energy Star lighting, Solar Water Installation, 2nd refrigerator recycling).  [Reno Gz/Jr]

** Be careful what you wish for, you might get it? The Senate is poised to vote on the Blunt Amendment (anti-contraception) [TPM] Message: This controversy isn’t about “religious liberty,” it’s about the license given to one religious faction to dictate to other believers in different factions. It’s also about allowing health insurance corporations to offer employers plans which do NOT include basic preventative health care options like vaccinations, contraception, or any other coverage the employer would like to exclude from basic coverage.

Sam Fullwood III addresses the religious issues succinctly:

Our nation doesn’t lack religious faith. What we lack is uniformity of religious expression. There are black Mormons, Latino evangelicals, Asian Protestants, and Muslims of all hues and races. Religion thrives in the fertile diversity of American culture. This is a good thing.

Unfortunately, some political and religious leaders fail to understand or appreciate the value in the blooming of faith traditions within a secular government. For them, religion is a one-size-fits-all edict, or a blunt weapon used to bludgeon anyone who disagrees with their narrow and exclusive views.

** The STOCK Act is limping toward passage, but only after House Republicans stripped out provisions regulating “intelligence consultants” who pick up and then disseminate economic tid-bits to those who pay for the information. [Politico] And they wonder why they have low approval ratings?

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Filed under Water, water rights, Women's Issues, Womens' Rights

NPRI Throws Mud At Governor’s Shiny New Economic Plan

Nevada Governor Sandoval has a new plan for the state’s economic recovery, [LVSun] by which he hopes to add 50,000 new jobs by 2014.

“The state’s finalized plan was based on a 178-page report prepared by researchers with the Brookings Institution and SRI International. That plan identified seven areas for the state to focus on, based on the state’s strengths. That included a renewed focus on gaming technology and innovation, developing the private aerospace and defense industries, and renewable energy.” [LVSun]

The Brookings Report identified seven economic sectors and 30 “targets” which hold potential for growth: (1) Tourism, Gaming, Entertainment; (2) Health and Medical Services; (3) Business IT ecosystems; (4) Clean Energy; (5) Mining, Materials, Manufacturing; (6) Logistics and Operations; and, (7) Aerospace and Defense.

The report calls for rationalizing the state’s economic development structure, regionalizing it under a general umbrella of state planning, and (a) “bolstering capacity for innovation and commercialization,” (b) “expanding global engagement,” (exports/imports), and (c) “aligning higher education and workforce development resources for innovation and diversification.”  The plan has several features to commend it.

As argued in yesterday’s post, it is far easier to build on existing economic sectors which have growth potential than it is to apply either a shot-gun approach wherein we attempt to attract “anything” that may come our way, or to attempt to dream up “new” areas of economic activity which may or may not fit Nevada’s existing economic situation.

Another feature which hold promise is the regionalization of economic development efforts.  Not only because there are substantial differences between the economic bases in urban and rural Nevada, but also because there are, to some extent, differing interests in northern and southern Nevada.

The third feature which holds promise is that the Brookings Report, and the Governor’s adoption of its general outlines, calls for placing more emphasis on research and development with an eye toward commercializing the results.  This recognizes a shift in focus described last March in a report from the Rockefeller Institute, SUNY:

“For much of the twentieth century, states’ economic development efforts centered on incentives, financial packages, cost comparisons, labor policy, permitting requirements, roads and water systems, and so on — things that state governments are comfortable working with, but that do not suffice to meet key challenges for the new economy. The twenty-first century paradigm, in contrast, is shifting toward putting knowledge first. For states, increasingly, that means connecting their higher education systems more closely to their economic development strategies.”

Nevada has definitely been attempting to function in the 21 century with that old 19th and 20th century approach, a reminder from yesterday:

The State advertises that we have no corporate income tax, no taxes on corporate shares, no franchise tax, no personal income tax, no nominal annual fees, no unitary tax, no franchise tax on income, and no tax on gifts or inheritances.  We have no estate tax, and a minimal payroll tax. Promise to stay in Nevada for 5 years and we will give you a sales and use tax abatement, sales and use tax deferrals, personal property tax abatement, and a modified business tax abatement.  If you are a qualified recycler we’ll toss in a 50% reduction in the recycling property tax. [LCB] [Desert Beacon]

For all intents and purposes, Nevada has been trying to balance its economic development on only one leg of the stool, on the vain and vague hope that “if you keep taxation low enough they will come.”   This would be fine, except that it ignores the four main factors informing the decisions about business location: ” (1) workforce characteristics; (2) transportation infrastructure; (3) research facilities and expertise; and (4) market location.”  [DB 12/14/10]

The NPRI seems equally intent on staking its claim to 19th-20th century solutions to 21st economic challenges. The reported response contains all the right conservative buzz words, without acknowledging the existence of any measures calculated to alleviate economic stagnation:

“It’s a statement of abandoning a belief in free market enterprise,” said Geoffrey Lawrence, deputy policy director for NPRI. He said new industries will be looking for subsidies to get off the ground instead of consumer demands.“Investments will be subject to political factors,” he said. “It’s going to become highly politicized.” He said the state economy is starting to recover, something the report starts out by acknowledging. “This is a big disappointment,” he said. “I think it’s a crony capitalist scheme.” [LVSun]

The Institute may not have heard the venerable line from Dr. Geoffrey Nicholson, the inventor of the now ubiquitous Post It Note, “Research is the transformation of money into knowledge. Innovation is the transformation of knowledge into money.”  The entire idea is that the research results can be translated into innovation by discovering what works and what doesn’t. What does work is the basis for commercialization.

The Institute also repeats what is now becoming a common narrative in conservative circles — they’ve rediscovered Demand.  Now, it’s “demand” that should inform all governmental decisions regarding business environment enhancement.   The NPRI is essentially arguing that if there is no existing consumer demand for a product then there is no reason for governments to support basic and applied research.  This is frankly absurd.

The Water Security Corporation commercialized water purification research from NASA, and since 2005 has been manufacturing purification equipment for homes around the world. [WSC] There was no “demand” for Face International’s Wireless Light Switch before engineers at the Langley developed a way to transform mechanical energy into electrical energy.   There was no “demand” for memory foam mattresses and pillows before the foam was developed for the NASA program. [NASA]  Someone is going to find a way to commercialize the “artificial leaf” developed at MIT which makes fuel from sunlight. [MIT]

If we adopt the posture of the NPRI then we’d have no modern home water purification systems, no wireless switches, no memory foam pillows, and no future commercial applications of that “artificial leaf.”  We’d also be without a host of other popular commercial products, the results of university-business research partnerships.  However, the NPRI isn’t through flame throwing:

“The plan calls for government officials to dole out direct state support and other subsidies in order to “incent entrepreneurship.” The incentive for genuine entrepreneurship is profit from serving the public. Unfortunately, what this plan would encourage is corporatist rent-seeking.”

What?  So, government land grants didn’t help build the U.S. railway system?  It was “corporatist rent seekers” (whoever they might be?) who received Small Business Administration loans to finance Greenville, South Carolina’s “Republic Locomotive,” a manufacturer of small industrial locomotives?  “Nationally SBA-backed lending continued the upward trend we saw last year,” SBA Administrator Karen Mills said. “Due to the Small Business Jobs Act and a return to pre-recession lending levels, over 61,000 small businesses had access to capital. ” [SBA]   My goodness! There are 61,000 little “crony capitalists” on the loose in the country — creating jobs?  Oh, however will our free market economy last?

Should the NPRI release its fingers from its pearls, arise from the fainting couch, and join the rest of us in the 21st century, it would see that there is much to be commended in the Governor’s economic plans.   If anything, the Governor’s proposal doesn’t quite go far enough toward developing the physical infrastructure necessary to facilitate commerce.  We could do with even more construction and renovation in our air transportation system, and in regard to our wastewater treatment facilities as well.  [DB]  At least we’re making a start.

Recommended Reading: Shaffer & Wright, “A New Paradigm for Economic Development,” Nelson Rockefeller Institute of Government, SUNY-Albany, March 2011.  PDF format.   See also: Higher Education Alliance, Rock River (Northern Illinois), “The Role of Higher Education in Economic Development,” NIU Outreach 2005. PDF format.

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Filed under Economy, nevada education, Sandoval