Issues

The Economy
Federal Funding
Healthcare
Education
Prevailing Wages and Project Labor Agreements
The Public Employees' Retirement System

The Economy

Today our State faces the continuing challenges of the poor economy. We see the jobless rate among our Nevada citizens hovering around 12.5% - among our veterans, minority groups and construction workers its even higher. We can talk about many issues like foreclosures, the uninsured, and education concerns, but all of these are byproducts of failed economic policies.

The very first question as we prepare for the 2013 legislative session has to be what policies can we pursue that will help encourage job growth in Nevada. I was successful in passing a jobs bill in our last Session and we overhauled our state's economic development structure to stimulate growth. We created a team to look at and coordinate federal funding opportunities. Today we receive cents on every tax dollar we send to Washington and we deserve more. Notwithstanding, there is more to do.

We face the continuing liability created by the 2009 American Recovery and Reinvestment Act, a.k.a. the Stimulus, that helped shore up Nevada's state, county and local budgets over the past few years and infused millions of dollars which allowed governmental agencies and education to minimize or delay cuts to some programs. These federal funds have largely evaporated.

Federal Funding

Political volatility in Washington will clearly have its impact on Nevada and our next legislative session will need to address threatened federal funding streams for education, health care and entitlement programs. For example, one such program - unemployment benefit extensions - carries a payback burden with interest. This will be an issue that must be addressed.

Healthcare

The Affordable Care Act, a.k.a. Obamacare, further places an untenable burden on the state, taxpaying citizens, and ultimately, on future generations. Without changes, the state faces hundreds of millions in an unfunded obligation to cover Medicaid between 2014 and 2019. Some have estimated over a half billion dollars. This obligation will severely restrict our ability to increase funding in other public policy priorities such as education or to restore any programs previously reduced. There are two events this year that will shape the impact on Obamacare and consequently Nevada: the Supreme Court case this Spring and, of course, the national elections in November. Hopefully the Supreme Court will find the act unconstitutional in it’s present form.

The federal government, i.e. the taxpayer, is funding the creation of the Silver State Health Insurance Exchange. In Nevada, we have approximately 500,000 uninsured that will become insured in January 2014. About half of that will be supported thru Medicaid and the other half by federally subsidized premiums going through the Exchange. In addition to the huge expense, the very nature of healthcare delivery to mentally ill, the various healthcare services provided by counties, indigent care, all are changing. It's a colossal task. According to a recent USA Today article, nearly half of the doctors expect health reform to hurt their incomes and two-thirds said Obamacare will not reduce costs. Ultimately, many doctors will limit their practice to insured patients or retire early when faced with increasing costs and decreasing reimbursement. This in the face of a national shortage of 160,000 doctors. It translates to months in waiting to get a doctor's appointment.

Education

In our last Session, much was accomplished in terms of educational reform. We approved new educational governance which calls for the Governor to appoint the state Superintendent for Education. Likely this will generate important changes. States now can apply for No Child Left Behind waivers and Nevada is moving in that direction. Such waivers are granted in exchange for efforts to close achievement gaps, promote rigorous accountability, and ensure that all students are on track to graduate college and/or are career ready. Teacher evaluations will be based upon multiple measures including stringent academic standards and student growth. Seniority will no longer be the single standard for removing or laying off teachers.

School bonding to support capital improvements, repair and maintenance is simply unavailable. WCSD says it needs $15 million annually just to repair and maintain schools many of which are over 50 years old.

On a brighter side, WCSD has created a number of school choice alternatives especially at high schools focusing on specific learning areas such as arts, foreign language, or math and science. They call these "Academies." It's a positive step in the right direction. In the 2011 Legislative Session, we made important strides toward other educational options by creating the Charter School Authority. I believe school choice will continue to be a concern for parents.

I believe class sizes should be left to the school districts and not dictated by the State. They are closest to the individual schools and in the best position to know which schools need extra help while other schools can easily accommodate larger class sizes for K-3. My bill proposed in the last Session never received a vote although testimony from Clark County, Washoe County, Principals, the Superintendents Association and others strongly supported the bill. Only the teacher's union opposed the bill. My vision was to permit reallocation of teachers, not replace teachers, to address larger class sizes in higher grade levels.

Our society continues to grow more complex. Thousands of new jobs in Nevada must be developed and these jobs undoubtedly will require advanced skills. Higher education must be strengthened to ensure more students graduate and are prepared for an evolving, technology driven workforce of the future.

Prevailing Wages and Project Labor Agreements

This is an area of great debate largely generated by unions. Prevailing Wages, the wages that must be paid for public sector construction jobs, generally add about 25-30% to the cost of these projects. In the last three years, Prevailing Wages have gone up 9% per year. This is outrageous! I am confident few Nevada families can say their wages have gone up 9% per year. Clearly in era of limited dollars for school construction and maintenance, paying Prevailing Wages is irrational.

Another related issue I believe is Project Labor Agreements. These agreements require union labor on public projects. Nevada is a "Right to Work" state and for me these Project Labor Agreements violate our state constitution and unfairly eliminate qualified construction workers who are not affiliated with a specific union. This is why I support the Equal Employment Initiative which guarantees equal opportunity and access to public works. My words are not an attack on unions but go back to the notion that whatever jobs are available should be equally available to all Nevadans. Our out-of-work construction workers need equal access to job opportunities.

The Public Employees' Retirement System

Where else can a public employee retire after 30 years service at any age and receive 75% of their pay for the remainder of their life? Or, after 20 years of service and age 60 receive 50% of their pay for the rest of their lives? Recently, I was told the average retirement under PERS is $2,400 per month, "not a lot of money." Remember, PERS participants have this pension in lieu of Social Security. So then, what is the average Social Security retirement. According to the Social Security Administration Research, Statistics, and Policy Analysis, the average retired worker over age 65 gets $1,228.60 -- about half of what PERS will pay. Think about it, the Social Security recipient has likely worked over 40 years to get half of what the public employees' pension pays for just 20-30 years of work.

In the last four biennium's, the contribution rate paid by the public sector employer and the employee have increased three times. In many cases both half's are paid by the public sector employer. Today, regular employees have an additional contribution over 23% to support the Public Employees' Retirement System. Who really pays for these increases...the taxpayer. These contribution levels negatively affect other funding needs that cannot be afforded because of the need to support the pension plan.

According to a recent analysis, the unfunded liability for PERS in $40,000,000,000.00. PERS officials maintain its only $10,000,000,000.00. Either way, its BIG, in fact's COLLOSAL!! PERS is only funded at the 70% level and this alone should give cause for concern. Can this level of obligation be sustained?

There are many issues related to PERS and undoubtedly this will be a topic for discussion in our next Session.